Eteaket founder Erica Moore visited Japan as a backpacker 20 years ago, where she became “enthralled” by the matcha tea ceremony and learnt more about the UK and Japan’s long-standing connections with the drink.
Her passion saw her establish the Edinburgh tea business in 2008, with the Far Eastern country now one of its biggest export markets, and she is to return there next month for the Kyoto Infused with Tea Expo.
Eteaket is one of just a handful of firms around the world to be extended such an invitation, and coming as Edinburgh and Kyoto mark 20 years of friendship, Moore’s duties will include presenting on tea in Scotland.
“They’re really wanting to know what [Eteaket is] doing differently, because we’re quite innovative, so I think we’ll be able to say what would work over here in terms of some of their really high-end Japanese teas and how we could adapt them for the Scottish market a little bit,” she explains.
“Scotland has always been really influential in the world of tea historically so it’s really nice to see it coming back.”
The firm will also be showcasing at the event its barrel-aged Tomatin Whisky Tea, aged in Scottish whisky barrels, and its Isle of Harris Gin Tea, created using hand-dived sugar sea kelp from the Outer Hebrides, hoping to leverage the popularity of these products in Japan and find other routes to market there.
The whisky tie-up has been “very exciting and a big learning curve – we’ve been trying to create a whisky tea for years and just couldn’t get it right,” Moore says. There was then a lightbulb moment to put tea into whisky barrels to create what is billed as the first such product globally.
“We approached Tomatin Distillery and I think they thought we were crazy at first, but they quickly came round to it and we’ve managed to create a way we can suspend the tea leaves inside the used whisky barrels.”
Inverness-shire’s Tomatin said that after several trials “and a few raised eyebrows from our distillery men, we succeeded in producing a product which matched up to Eteaket’s vision”.
Turning to the Isle of Harris Gin partnership, this started out after Moore’s mother, who is from the Hebridean island, received a bottle of the spirit, and a family friend suggested a partnership with the tea firm.
Moore then contacted Isle of Harris Distillers’ managing director Simon Erlanger. “He was really receptive to it and I think neither of us expected it to be as popular as it is.
“We launched it just before Christmas last year and I thought I had blended enough for two months and it ran out in two days, so it was a mad scramble to try and get enough sugar sea kelp.” The tea, using Isle of Harris Gin botanicals, has consequently been upgraded from limited edition to permanent fixture.
Moore set up Eteaket after making the “massive” decision to give up a career in law with “huge” prospects, moving to Edinburgh where she and her husband only knew one person. “We had to downsize and live in a tiny flat for a lot longer than we expected,” she says.
Starting out as the financial crisis was unfolding proved “a very challenging time”, but Moore persisted when bank funding proved elusive, and set up the tearoom on Frederick Street. This was followed last year with the opening of a “concept store” on Rose Street to focus on the retail side of the business.
“We saw a gap in the market [for the shop]. We really wanted to chat to customers a bit more and to show them what they could be doing with tea, whether it’s making tea lattes at home or cold brewing,” Moore says.
The firm has sold more than 44,500 kilograms of tea and has extended its product range to include chocolate, crockery and candles produced in conjunction with local suppliers.
Asked whether she is concerned about consumers cutting back on discretionary spend, she points to a trend cited by other premium food and drink retailers for people seeking out affordable luxuries when appetite for big-ticket items cools. Market research specialist Euromonitor International this year conducted an in-depth look at the UK tea market, saying speciality brands are set to play a much larger role. “The average unit price of a standard tea bag is currently around 2p,” it noted. “However, some consumers are showing a consistent willingness to pay around ten times this price for speciality black tea bags, which is promising for the category’s prospects.”
Moore is also in favour of competitors entering the fray, with a separate study forecasting that the tea market will be worth $37.3 billion globally by 2025, expanding at a compound annual growth rate of 5 per cent from 2017. “There’s lots of competition and I think we almost need more,” she says, highlighting the coffee market with “hundreds” of outlets. “You need that to grow a market and build demand.”
The business has been privately funded to date but she sees Eteaket as being at “a bit of a tipping point. We’re starting to really grow, particularly the wholesale and the website.” Is external fundraising on the cards? “I think to grow properly we’re going to need some investment,” she says.
While her law training may seem an advantage, she says it has proved more of a double-edged sword. “I see all the risks and the dangers, rather than just being able to jump in all the time.”
But her entrepreneurial streak seems to be winning the battle over her risk-aversion. “You just have to be able to take chances, which I’m pretty good at, rightly or wrongly.”
She is also pleased to have set up the company in Edinburgh rather than the original plan of London, saying the Scottish capital offers a customer mix of a loyal local clientele and tourists, who then order products online from their home countries.
Export is a big focus going forward, with the US, Canada and Australia providing good sales, while in Asia, Taiwan is seen as an easier sell than China. Headcount will also need to increase from 14 currently to leverage Eteaket’s ambitions, Moore says. “There are all these opportunities now but obviously the tricky part is there are not that many of us and we’re trying to stay focused on what we’re doing so we can do everything as well as we possibly can.”
Turnover is expected to hit £1 million in the current financial year to May, and as for expansion of the firm’s physical presence, another tearoom would make sense “on paper”.
However, she is concerned about opening one in say, Glasgow, “and not be able to control the standards as much… I think it would be too risky for the brand to roll out more of them. At the moment we’re focusing on the wholesale and our internet side, and then we’ll take another look next year at whether it would make sense to do more concept stores in different in places.
“We’ve got the model now – we’ve got the processes and everything in place – and I can definitely see potential for it abroad if our export plans come off.”
Other developments on the horizon include broadening the selection of teas from nearly 40 at present (although shying away from a dramatic increase) as well as further collaborations.
She also sees the tea market as having plenty of room to brew up growth. “In five years’ time I want Eteaket to be the ‘go-to’ for loose leaf tea in the UK and then with a competitor share of the marketplace in Europe, Japan and possibly the States and Canada as well.”
And with a beer infused with Japanese green tea on the cards via Edinburgh-based Barney’s Beer, Moore stresses that innovation is a key focus.
“We’ve got lots of exciting things in the pipeline and new blends coming out. Hopefully the fact that we’ve been here for nine years and try to do things properly will stand us in good stead.”