Friday, August 10, 2012

SpecialTeas - Featured Defunct Tea Company

Back in June I featured an inactive tea blog, Tea Nerd. Today I follow suit by featuring a defunct tea company, SpecialTeas. SpecialTeas was still in business when I founded RateTea, but I did not have the opportunity to actually try any of their teas until after the company closed.

Most of what I know about this company is from reading the reviews and commentary of others. Here is a screenshot of the company's website in April of 2008, a typical example of what it looked like:

What did I like about SpecialTeas?

  • A clear focus on single-origin pure teas - Although SpecialTeas had quite a selection of blends and herbal teas as well, the company had a strong emphasis on single-origin pure teas. The website classified tea both by type and region, drawing attention to the influence of region on tea.
  • Large and diverse selection - SpecialTeas had a very large selection, not only carrying many different types of tea but many specific teas of certain types, such as a rather large selection of Chinese green teas and Indian black teas.
  • Good prices - The prices of the few teas from this company that I tried were quite reasonable, and I heard good things about the company's prices from people who had sampled more of the company's teas. All but a few of the ratings of this company's teas on RateTea give this company 5/5 or 4/5 on value.

If you want to read what is probably going to be my last ever review of this company, I recently posted a review of SpecialTeas 546 Mountain Peak Mao Feng Organic, a green tea from Zhejiang province which was quite pleasing.

Why did SpecialTeas close?

SpecialTeas was bought out by Teavana, and then closed. The buyout may have happened as early as 2005, even though SpecialTeas remained open for years after that; there's some strongly suggestive evidence for this buyout highlighted on RateTea's page on SpecialTeas. In 2005, the company was bought by a company that shared a business address and two key corporate officers with Teavana. The company has now officially announced that SpecialTeas has been merged into Teavana. The domain name now redirects to a page on Teavana's website announcing this merger, and offering free shipping to former customers of SpecialTeas. You can use this as a clever trick if you wish to obtain free shipping when buying from Teavana's website.

I personally think that much was lost when Teavana closed SpecialTeas. The two companies had quite different selection and pricing. SpecialTeas in particular had a much broader selection of single origin pure teas, and their prices also tended to be lower. I also never heard any complaints about pushy sales practices associated with SpecialTeas, which has unfortunately been a persistent complaint about Teavana, although to be fair, SpecialTeas did not have physical store locations of its own so it is hard to compare the two companies on this level.

Dragonwater Tea closes:

As another loss, there used to be a company named Dragonwater tea, which was supplied by SpecialTeas, and which closed when SpecialTeas was closed. I learned about this company through a 2009 thread on TeaChat about Teavana and SpecialTeas, in which people were speculating about the relationship between these two companies before any information had been made public officially. I found it interesting to learn about this company, because it showed how value can be lost in society when a company buys out its supplier and closes it.

The economics and ethics of the buyout:

Acquisition of a competitor is a prime example of an anti-competitive practice, generally agreed on by economists as having a negative effect on the economy because it reduces competition and thus reduces market efficiency. As such, these sorts of buyouts and closings raise ethical concerns for me. They are usually legal (with the exception of certain buyouts, restricted under US anti-trust law), but I am not convinced that they are the most ethical decision. I recognize that people have different values and beliefs about business and economics, but personally, I believe anti-competitive business behavior to be something that is often unethical.

Beyond ethical concerns about indirect economic effects, in the tea industry there is an additional, more direct ethical and human rights concern related to anti-competitive behavior. If a company buys out and closes a competitor that sells the same tea for a lower price, leaving the tea only available on the market at the higher price, the result of people buying the tea at the higher price is that a smaller portion of the money being spent on tea reaches the original producer. This causes wealth to concentrate in the already wealthy country, keeping the poorer producing country poor.

This is also a matter that concerns me.

What do you think?

Did you ever try SpecialTeas? What do you think of their buyout and closing by Teavana? Do you think Teavana provides a comparable experience to SpecialTeas, or has something of value been lost by the closing of this company? Do you think that this buyout constitutes anti-competitive behavior, or just part of normal, healthy business activity? Have you ever thought about how this sort of buyout could hinder fair wages for tea producers by causing wealth to concentrate in already-wealthier Western countries?


  1. I never did try SpecialTeas but I agree that is unscrupulous of Teavana to acquire and close down their competition. I think that they are doing the same thing with their acquisition of the Canadian chain Teaopia.

    1. I don't know if the Teaopia buyout is the same setup. From what I know, Teaopia was a retail tea store a lot more like Teavana. Buying out a competitor though can also be a form of anti-competitive practice, but I think it has a somewhat different effect on the economy from buying out a company that is a supplier of your competitors. The second, like with SpecialTeas, can induce other other companies not involved in the deal to close, and I think there is potentially a greater negative impact on the economy.

      I also think it's more problematic because the companies that are forced to close may have no agency in the buyout. In the case of Teaopia, at least the company is getting cash or whatever deal they got in the buyout, and presumably, the owners agreed to sell it, so it is more consensual.

      The Teaopia deal would still potentially concern me, as I don't like the idea of a company buying out competitors, but I think it's a smaller issue for me.

  2. I have tried SpecialTeas, many of their teas, in fact. I was very saddened by their closure, because, as you mentioned, their customer service was exemplary, and while I have done very little business with Teavana in comparison, the few times I have been there ... well, let's just say I don't have anything really good to say about it.

    I also agree with Nicole, who commented here, I do think it's unscrupulous to acquire and then close down their competition. It is unethical, and while this is not something I really contemplated before, now that I've read it here, it gives me something to think about, and additional reason to dislike Teavana in general. Not that I needed that.

    Really, when it comes right down to it, when I visit a brick and mortar tea shop, I want to deal with people who are not only knowledgeable about tea but are also as passionate about it as I am. I don't get that from Teavana. Oh sure, they've knowledge about the tea - knowledge that they've been force-fed by their management. But, are they passionate about the product they're attempting to sell me? I don't feel that from them. I'd much rather buy from the small company online - a person who is passionate about tea and knows tea because they love it - than a big company who really is focused on nothing more than dollar signs.

    1. I know what you mean about the distinction between genuine knowledge and passion, and scripted "knowledge", which unfortunately, is sometimes of dubious accuracy. One thing I don't like about Teavana is that they promote some egregiously false health claims about their products.

      For example, their pages for white tea currently say: "Low in caffeine: approximately 1% of the caffeine in a cup of coffee." but, while all tea is much lower in caffeine than coffee, very few teas are as low as 1% when brewed at a standard strength. This is egregiously false, such an extremely false claim that I think it could actually open them up to legal liability, such as in the case that a medically-sensitive person had an adverse reaction due to excessive caffeine consumption, after drinking one of the teas advertised this way.

  3. i avoid Teavana because I've read a lot about their pushy selling tactics, said dubious health claims and scripted tea knowledge. I find that tea lovers often have an idealized vision for tea that goes against the general thinking of American capitalism and convenience-oriented consumers. But I'm right there with you. I still find that my coworkers are surprise when my green tea is green. I wonder what Trader Joe's would make of it. They seem more intent on introducing their customers to unfamiliar foods from various cultures. I don't recall ever seeing tea sold in their stores.
    I once read somewhere that black tea has more caffeine than coffee, but we brew them differently, using less tea leaf than ground coffee bean per cup. Regardless, I think it is silly to say 1% the caffeine of anything. A cup of coffee from one store (especially Starbucks) can have more caffeine than from another place. I just discovered RateTea and your blog today. I'm trying to find where to get affordable, good quality Japanese green tea. I have become spoiled after befriending a farmer who sends me some shincha in the spring. I don't think I will be going to Teavana to find shizuoka cha.