By Heidi Kyser

Online retailer and wholesaler Adagio Teas is branching out into a third tea business category: a brick-and-mortar store.

In a news release last week, the Garfield, N.J.-based company announced it would soon be opening its first retail store. Although Adagio said the location would likely be the Chicago area, it did not give a date for the opening. Instead, it urged those who are interested to follow the store’s development on a blog dedicated to the topic at http://www.TeaRetailer.com.

Nevertheless, Cain told WTN the location of Adagio’s first on-land store was not a given.

“I assumed I’d be moving,” he said. “The choice of Chicago was strategic.”

Dozens of successful tea shops are already located in greater Chicago. Besides Cain’s former employer, there are 15 locations of Argo Tea.

“We picked that location on purpose, so we’d know that if we’re successful, we’ve done it in the face of competition,” Cain said.

Adagio hasn’t signed any lease in Chicago, according to Cain. “We will most likely open both an urban and a suburban location to test the model,” he said.

Besides putting themselves to the test vis-à-competitors, Adagio is expanding in a difficult retail environment. The U.S. economic recession has dampened consumer spending, particularly on discretionary products.

But Cain said this, too, is a plus.

“The biggest impact of the economy being down is the availability of funding,” he explained. “If you can still fund, everything is on sale. Real estate is less expensive, contractors are less expensive… If you’ve got the money to expand, now is the best time to do it.”

He also said that tea, as a consumer category, is still growing.

Asked whether the plan was for one or multiple stores, Cain said, “It remains to be seen.” While he believes there is an opportunity to open many stores, Adagio has no ego tied up in the venture.

“One of the things that I like about Adagio is that, unlike a lot of companies that have a vision and try to make it profitable, Adagio looks at the industry and asks, ‘Where is there money to be made in tea?’”

The initial store may only break even, but still be successful if it helps the brand as a whole, he said. Or, it may make a lot of money. “That will dictate how we expand the retail model after the first store,” Cain said.

He likened the concept of the first store to Apple’s shops. There will be no cafe or food service, but unlike in most cash-and-carry retail stores, customers will be allowed to interact with the product – looking at, touching, smelling and even blending, brewing and tasting tea – before deciding to buy.

 “So many tea shops are like grocery stores for tea, and I want this to be like a playground,” Cain said. “How much they buy there will be less important than their experience with the Adagio brand.”