Since our founding in 1983 as a specialty tea business, my father, brother, and I have progressed from operating out of the basement of my father's house into a tea importing/exporting business with 100 employees, two tasting rooms and an 89,000-square-foot factory.
Domestic sales make up about 90 percent of our yearly revenues, which are in the $20 to $25 million range. The rest is made up of exports to foreign countries. England is now one of our largest international markets. But getting there was an uphill battle.
Why would the English, famous for their tea, take a second look at an American company? As the old saying goes, the idea was as difficult as "selling coal to Newcastle."
Despite the odds, we have succeeded by building relationships with respected English institutions, delivering a superior product, and capitalizing on local expertise.
The not-invented-here barrier
Bringing tea to England is difficult because of the richness of their tea traditions. There's a certain attitude of "what could you possibly offer that could be better?" The idea of English legacy teas is so dominant; it was very unusual to think that you could sell to Britain.
It's the type of barrier that any outsider selling into a marketplace with a rich tradition would face -- whether it's tea to England or vodka to Moscow.
We were working hard to increase our exports, and realized that to gain traction in England we needed to establish our legitimacy. We were lucky that a couple of great opportunities arose, so we took advantage of them.
Five years ago, we made a licensing deal with Historic Royal Palaces, a non-profit that helps maintain a number of English landmarks, including the Tower of London and Kensington Palace. They liked our product, and we were able to get the U.S. and then the U.K. license. As part of the deal, we create special tea blends for the organization, and use custom packaging featuring our association with Historic Royal Palaces.
Around the same time, we established a relationship with London's Dorchester Hotel through a contact we'd previously worked with in New York.
These deals helped give us legitimacy. Our newfound association with longstanding institutions helped us earn the attention of English tea drinkers.
It's the product
But if you really want to succeed in selling coal to Newcastle, you have to do more than appear legitimate. Your coal has to be better than what the locals already have.
The English have always treated tea as a commodity. Nearly everyone drinks it, but most retailers there don't think about specialization and a focus on quality.
This is where we stood out and earned that second look. From the start, my father concentrated on specialization in quality and look and image. For example, we package our tea in pyramid-shaped, silky nylon sachets, which are a great improvement over standard tea bags.
Thinking and hiring locally
Even so, it was hard to break in for cultural reasons. England felt like a closed system. It was sometimes difficult to find information. This is where having a local importer helps.
There are two schools of thought on how to approach a foreign market. One way is to have a centralized approach, where the importing and exporting systems are the same everywhere in the world.
On the other hand, we have decided on a system where we pick someone in each country to help us adjust to the best way to sell there. It has helped us navigate and thrive within very old systems. Local players simply know the ins and outs.
We also found we needed to make product changes for foreign markets. Not everything Americans like will work in another culture.
In England, we had to change the recipe of our English Breakfast tea. We've always sold an English breakfast tea, but for that market, we've needed to develop what I call English, English Breakfast Tea, which is much stronger.
Through these efforts, we managed to increase our exports by almost 100 percent from 2009 to 2010, when things really took off in the second half of the year. Our exports to England ended up at $300,000 in 2010.
In addition to selling through Historic Royal Palaces and at the Dorchester, we also sell to other hotels, restaurant chains and department stores in England. We expect this year that England will be our second biggest export market, behind France.
-- As told to Peter Weed
Mike Harney is vice president and tea taster for Harney & Sons Fine Teas. He has held these posts for more than 20 years. He graduated from Cornell University and Northwestern's Kellogg School of Management. He is the author of The Harney & Sons Guide to Tea.