Starbucks Decided to Retreat From Tea Markets, Closing 4 out of Its 5 Teavana Tea Bar

By Staff Writer

Jan 27, 2016 10:24 PM EST

Starbucks announced that they would stop operating four out of five of their Teavana Tea Bar outlets in the U.S. Three Teavana locations in New York will be converted to Starbucks stores, one location in Beverly Hills would be closed, but one location in Seattle will continue to operate as per usual.

At first, the coffee maker company saw a big opportunity in tea beverage markets when they acquired tea retailer Teavana in 2012. According to Grub Street, Starbucks set aside $620 million to invest in the tea line as CEO Howard Schultz confidently stated that the move would eventually grant them a $90 billion global market opportunity. 

The first Teavana Tea Bar was opened in New York in October 2012. And then two other tea bars opened in New York, one in Beverly Hills, and one near its headquarters in Seattle. Although four of the outlets would be either closed or converted to Starbucks, the Seattle tea bar will remain open. The Teavana Tea Bar in Seattle not only will serve made-to-order tea drink just like Starbucks, the store will also test new ideas regarding the tea business line.

The fact that one store remains open not only to sell products but also to develop new ideas proves that Starbucks is not giving up on tea entirely. The decision was regarded to as a few step backs but not a complete surrender. Also, it is worth noted that the decision to retreat would not affect 350 Teavana retail locations that would continue selling packaged teas and appliances.

According to ABC News, this isn't the first time Starbucks has retreated from their big idea. On June, the company also closed its more than 20 La Boulange cafes, the name which they also bought in 2012. After the closing and converting of these stores, Starbucks then incorporated both the tea products from Teavana Tea Bar and baked goods from La Boulange brands to their Starbucks' menu.

Buzzfeed also noted that Starbucks' own Evolution Fresh stores, that serves smoothies and fresh juice, has also undergone the similar change. Starbucks closed its retail location in San Fransisco, but three other stores in Washington remain open.

This Starbucks' failing experiment could mean that Americans are just not that into tea, but that doesn't keep the coffee maker company from retaining and keep developing the ideas. The conversion of Teavana to Starbucks will begin in April, and the Beverly Hills outlet will also close this year. 

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