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I know the tea drinkers will object strongly, but the smarts required to make a great tasting cup of espresso coffee is far greater than that required to make pleasant tasting tea. Where tea simply requires boiling water and tea leaves, espresso requires a plumbed in water filtered/softened imported Italian espresso machine plus a commercial conical grinder plus expertly roasted and stored coffee beans with the coffee beverage being expertly extracted by the skill of a highly trained/experienced barista. Customers are more willing to pay extra for this value-add of expensive equipment and theater in coffee houses but can’t quite except that a tea bag and hot water from a jug should command the same value-adding margin. The caffeine content of espresso coffee is more than twice that of tea for the same sized cup. Caffeine is known to create both a physical and psychological addiction, so the coffee houses have a greater opportunity to create regular (addicted) customers than the tea houses have. Having a cup of coffee on your desk has become far more accepted in the work environment than having a cup of tea. A cup of tea is more the beverage you have away from your desk. Also, while the cultural connotation of coffee is fast paced, tea is culturally correlated to a more genteel pursuit.

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The reason we have “a coffee break” and “go out for a coffee” is that fine espresso coffee is hard to substitute even with the advances in home espresso machines. But armed with a jug and a tea bag you can easily substitute the need to leave your desk to seek out a taste that you can so easily get with a home brew. But to get that true ‘nectar of the gods’ espresso coffee taste you will have to go out to your favorite espresso bar and barista, so the coffee house eliminates at least one of Porter’s 5 forces on reduced profit margins (substitution) where the tea house remains vulnerable. Tea drinkers are special … just ask them. First of all they want to sit down. They want their delicate tasting beverage served in costly, breakable and difficult to manage ceramic. They want one pot of tea that they share with their friend so they can sit for hours in expensive CBD rental space for a return of a few dollars. On the other hand, coffee drinkers are happy to do takeaway, they are OK with a cardboard disposable cup and they each buy their own coffee beverage when catching up. In business terms, tea drinkers about double your costs for half the returns making them a poor target market for any sustainable commercial business model.

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