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case study

Garret Chan, director of strategy for Tealeaves.

The challenge

A few years ago hotel executives and top chefs would say to Garret Chan: "All our guests are drinking your tea and they love it, so they want to buy it for themselves."

The co-founder and brand manager of Tealeaves would respond: "Well, it's unfortunate that they can't."

He wasn't being cheeky. His artisanal company just didn't want to get involved in individual sales. Its clients were buying what Mr. Chan calls "food-service-sized" orders, which were far too big for individual tea lovers.

But that had to change two years ago when the custom tea blenders, used to working with Michelin star chefs and five-star restaurants around the world, realized they had no choice but to take the leap into personalized sales to keep up with a changing industry. They had to find a way to attract the end-user: the individual.

The background

Mr. Chan founded Tealeaves in 1994 – along with six others – after he graduated from the University of British Columbia with a law degree.

From its beginnings, Tealeaves focused on the artisan experience as its founders looked at tea through the same lens as fine wine. In just a few short years, Tealeaves became the purveyor of luxury tea items to some of the most exclusive names in accommodation and dining. It was considered an expert brand, selling only to culinary professionals across the globe.

The company would have stuck with its tried-and-tested business model, until pressure from its European and U.S. competitors – that had started selling directly to tea drinkers – forced it to re-think its strategy.

"Our competitors that couldn't beat us in wholesale started advancing their brand in the eyes of the consumer and forgoing the expert," Mr. Chan says. "They were pushing against our reputation because a consumer who loves a brand can advocate for that brand, so some hotels and chefs starting looking at consumer-sanctioned brands instead of ours."

The solution

To get into the game of selling to consumers, Tealeaves had to focus on people who were already drinking its product. It noticed many diners at the high-end establishments the company worked with were older, and that's when Mr. Chan and his team realized social media wouldn't cut it. They used their connections to UBC's Sauder School of Business to put together a branding team, including interns and graduates from the school, and then leveraged industry connections to luxury food and beverage brands.

Tealeaves began working with iconic brand partners such as Napa's Rudd Winery, and developed a $1.5-million budget for short films to tell the story of Tealeaves and its signature blends.

"Consumers today want to understand the craftsmanship, journey and passion behind each tea," Mr. Chan says.

The result

The creative team at Tealeaves has 48 films in development, with another 20 planned. Its partners at hotels such as Four Seasons, St. Regis, Auberge and Mandarin Oriental are helping out by sending the videos to potential customers. Ten of these videos will be part of a new collaboration with Pantone, expressing the stories and moods of each tea through colour.

Mr. Chan is hoping a coming collaboration could result in a film worthy of submission to a major international festival.

The work is paying off with more brand recognition, Mr. Chan explains, attracting customers to a recently launched online store where some teas are already selling out.

On the new, customer-friendly website, customers are presented with numerous films, as well as a story about each tea to transport their thoughts to Sri Lankan gardens, fairy tales and ancient Chinese emperors. This feature is a point of differentiation for Tealeaves as it enables the customer to better understand and feel the story behind different teas.

Thanks to a more public profile, Mr. Chan says Tealeaves is attracting much better workers this year, and it needs a bigger team to help get teas onto more store shelves. "All of these things matter," Mr. Chan says. "We're seeing people truly loving their jobs, which really shows in the quality of our work."

Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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