Starbucks Buys Teavana

I was surprised to learn today of Starbucks' acquisition of Teavana.  Price:  $620m or $15.50 per share.  

Starbucks says it will continue to sell Tazo, a conventional bagged tea found in many grocery stores.  In addition, Starbucks has been developing Tazo tea shops and says they are a laboratory for the Teavana merger.  Teavana's stores and product lineup are so much more upscale than either Tazo or Starbucks, it's not clear to me where Starbucks will take the Teavana brand.

Starbucks says it will introduce the Teavana brand into grocery stores.  I wonder how the Safeway management will react to Monkey Picked Oolong that sells for $25 for two ounces?  The price and quality of Teavana's products do not seem to me to directly translate to most grocery stores, so my guess is that they will move Teavana more downscale.

So for us little guys, this is both good and inspiring news.  It took Teavana's founders 15 years to build the company for this acquisition, so it's nice to know it can be done.  Also, if my hunch is right that Starbucks will have to reposition Teavana to a cheaper and lower quality target market, it opens the door for those of us who sell the high end product.

How will Teavana's loyal customers react?  Some may not like the deal at all.  Starbucks is a good company but it no longer has the mystique it once had or Teavana had until today.  It will also depend on how much Starbucks changes the Teavana stores, product, and overall vibe.

If you're a Teavana fan and you're looking for that "little company" that will take care of your tea needs, look no further than Tozy Tea.  We'll work hard to earn your trust and satisfy your needs.  And you can always check us out on Facebook or Twitter, we try to have some fun with people there.