Shop Talk: Q&A With Thomas Eck, Upton Tea Imports
Photo/Christina H. Davis
Thomas J. Eck, Founder, Upton Tea Imports, Hopkinton
Thomas J. Eck left a career in high-tech to start Upton Tea Imports in his basement in 1989. Since then, the company has posted consistent annual revenue growth by providing connoisseurs their favorite oolong and green teas via quirky quarterly newsletters and the web (UptonTea.com). The company, and its 18 employees, will move this August from its existing headquarters in Hopkinton for more modern space in Holliston. Here, Eck explains the reasons behind the move as well as his theories on why Vermonters love their loose tea.
>> What prompted you to leave the high-tech industry and start your own business?
I actually had been a tea drinker since my teen years and had developed a fascination with some of the more exotic teas. I published my first newsletter at the end of 1989, a few months after I quit my job at Stratus Computer (now Stratus Technologies of Maynard). The first newsletter was six sides of paper with about two dozen teas.
>> What’s the geographic spread of your customer base?
In terms of gross sales, Massachusetts is our biggest source of customers. Part of that is because of the local advertising and publicity that I’ve done. California is the second largest state and growing fast. New York is third. An interesting statistic is that the best state in terms of per capita tea orders is Vermont.
>> Why is that?
Loose tea tends to be, in the basic forms, a very economical product. There’s a joke: Vermonters have very deep pockets but very short arms. They tend to be frugal. And it’s not a very wealthy state. There are quite a number of people on limited incomes. So, loose tea tends to be a real bargain for them. They also don’t have as much access to gourmet shops. Vermont is a good mail-order state. I’ve heard that many times.
>> What is it about American culture and tea? Are we ever going to be tea drinkers?
I think it’s evolving, but I do think there is a false premise that a lot of companies have made. Retailers like Tealuxe and others are expecting to be the Starbucks of tea. And I’m not sure that tea has that wide of a following. It is growing a little bit, but largely the audience is unsophisticated still.
>> What’s the average buy made by a customer of Upton Tea Imports?
Well, 95 percent of our business is direct to consumers. So, focusing just on consumers, it’s about $40. We’re 100 percent mail order. We don’t have walk-in business. And the average customer probably orders three or four times per year.
>> Have you ever considered opening up a walk-in shop?
I believe that the walk-in business has a problem. If you’re going to be in a high-traffic location, which you need for successful retail, your rent is very high and I’m not sure there’s enough focus on tea to pay for the rent. If you’re in a low traffic place, you better be a destination and therefore a few people might drive out to your shop. If you’re going to open a tea shop, you’re going to have someone sit at your table for perhaps an hour and they’re not going to want to pay more than a few bucks for a cup of tea and a crumpet. So, how do you play the rent? That’s the issue with a tea room. I don’t want to try to solve that problem.
>> What prompted your decision to move to Holliston?
It’s like someone who isn’t planning to move for a long time. If you can afford a down payment, it’s a great economic decision in almost any market. But now, I knew the market was depressed, so commercial property is selling at a discount. The entire decision was economical. At the new location, we’ll have slightly less space (about 20,000 square feet), but it will be more efficient space.
WEB EXCLUSIVE>> How did you manage to grow the business early on?
An important thing happened early on. At the time there was a chain of stores in Massachusetts called the Coffee Connection. They were acquired by Starbucks in the early 90s and Starbucks took out their tea program. All the customers that went to the Coffee Connection for tea were going into the stores shouting, ‘Why have you taken away my tea?' Tea to the dedicated drinker is part of their daily ritual. People get very loyal to a specific tea and when they couldn't get that tea, they were irate. Starbucks, so as not to totally alienate the dedicated customer, started to turn the customers toward us. All of a sudden Starbucks gave us a 20 percent increase in business at no charge and were happy to do so to make sure that customers weren't yelling in their stores.
WEB EXCLUSIVE>> Has the business evolved much from when you first started?
We've maintained the same profile. We have not changed. But the tea business has evolved. Loose tea is only 2 percent of the market. The rest is tea bags, instant tea and bottled beverages. Upton Imports has always done loose tea. That's our model, that's what we stick with. So, in that sense, the tea market has not changed for us. But it has become more competitive. There are mountains of tea sources today. If you go down the supermarket aisle, you will see that tea occupies about a third of the space as coffee, but it's only 10 or 15 percent of the market at best. Tea has gone from being under-represented to being over-represented compared to the potential market. Also, sourcing is a little more difficult today than it used to be.
WEB EXCLUSIVE>> In what way?
We've had a more difficult time buying teas now than we did 10 years ago because there's so much the acreage for high-end teas [that our customers expect from us] is not increasing. There's a bigger demand for a non-growing product. I could even say shrinking product. A lot of the land for growing tea is being turned into commercial space.
WEB EXCLUSIVE>> I imagine there are more lucrative things to do with land in China than grow tea.
Yes, the land use might have more value as a factory site than as tea plantation. But also, the expertise has moved away from the farm and into the cities to work in the factories. That also has created a shortage of the very high-end specialty teas.
WEB EXCLUSIVE>> India is obvious a big source for tea. What are the other countries that you get your supply from?
Kenya is huge producer of tea. And some of their teas are getting to be really quite good. Japan has always produced very good teas, but they're expensive. China is the birthplace of tea. That's a very important source. Taiwan is also known for their oolong teas.
Watch as Thomas Eck explains how to brew loose leaf tea:
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