There is no shortage of bad news about the economy. It seems unclear whether we are “officially” in a recession with the conflicting reports from our daily news sources. The mainstream censor-approved definition of a recession is 2 consecutive quarters of decline in productivity (measured by Gross Domestic Product). There seems to be less of a consensus on the definition of an economic depression, but it is often cited as a decline in productivity of greater than 10% and lasts for several years. (The Great Depression lasted 10 years!) And economists, in an attempt to make a joke will tell you:

 A recession is when your neighbor loses his job.
 A depression is when you lose your job.

Please note that economists are considered the third least humorous profession, only slightly ahead of high school lunch ladies and IRS agents.
If there is anyone unaware of the serious economic crisis America is facing, I would like to buy some of the tea you are drinking. Ultimately, the macro-economic forces are beyond our control (with the exception of the hopeful major change in our government policies following the November elections). So as prudent stewards of our industry and as individual business owners, we must decide how to best weather the storm. And I believe there is strong hope.

I recently visited the trade show I used to run for the discount apparel industry. The show was packed and the exhibitors gleaming. This was a stark contrast to the activity and enthusiasm at the other apparel events being held concurrently. The underlying economics are simple: when times are tough, buyers increase their opennes to buying discounted goods, and when times are good, buyers are buying more merchandise in all categories.

I also recently read that Nevada’s state tax revenues from gaming and hotels were down but state alcohol tax has risen almost 6%. The article went on to say that alcohol is recession-proof, as when times are good, we celebrate with it and when times are bad, we cry into it.

There exist industries and business models that perform well in good and bad economic times. I believe that tea has some of the recession-proof armor of both of the above examples, but ultimately it will come down to positioning.

Tea (in most cases) is not a “discounted item” as with the case of the apparel show, but is an extremely affordable consumable. Bill Waddington, a very successful tea retailer in Minnesota, has trademarked the phrase “Tea the World’s Most Affordable Luxury®.” This insightful tag line is ingenious positioning for tea. While consumer spending is tightening, people still seek to indulge, in order to feel they are working for more than just to get by. Tea can fulfill this need without buyer remorse.

In the case of alcohol’s recession-proof traits, again, tea can also position itself to be the beverage for the good times and bad. Tea has long been a beverage of comfort and solace amidst the chaos of our day. It is also serves to gather people to commune over our accomplishments.

Certainly being adaptive to your customers and your specific market will be essential. I do not propose you go out and advertise “Your retirement is postponed, drink tea to increase the alpha-waves in your brain for a euphoric state of denial.” But do position your tea room marketing to an affordable and unique dine-out experience.  Offer community forums on the election, on the economy, or the surprising success of the Buffalo Bills.  People thirst for social interaction in troubled times.

Successful businesses will need to be more savvy with the marketing dollars, but whatever you do, don’t cut your marketing efforts.  Major studies have shown maintaining or increasing your marketing in tough times results in significant gains in market share as the economy improves.  And it will.

Larger consumer trends will impact some businesses favorably and others negatively, such as shifts away from out-of-home consumption towards in-home. Stores retailing dry tea and brands sold through grocery channels will benefit. While there will certainly be challenges for all segments of the economy, positioning tea to be an affordable indulgence and a cup of compassion and hope in troubled waters will help keep tea sales soaring in light of the economy.

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