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Reading the tea leaves: how Pine Tea & Coffee shifted from wholesale to online

Family-owned and operated Pine Tea & Coffee supplied tea to the hospitality industry for more than two decades before COVID-19 forced many of its customers to close or scale back operations. Co-founder Lesley Pine explains how Australia Post helped her business sell direct to consumers during the pandemic.

Key points

  • Diversification into online sales helps 20-year old business reach new customers.
  • Customers are more conscious of supporting local businesses.
  • Consistent and reliable deliveries gives Pine Tea & Coffee the confidence to grow direct sales.

When Lesley Pine and her brother Clayton started Pine Tea & Coffee in Sydney’s hills district 20 years ago, they never imagined they’d deliver their award-winning Silvertip tea direct to consumers.

The supplier and wholesaler has long served Australia’s hospitality sector, offering more than 250 varieties of loose leaf tea under its premium Silvertip brand as well as roast Bella Italia coffee.

But when the Coronavirus forced many of Pine Tea & Coffee’s regular customers to close or restrict service, Lesley and her team had to re-think their business model.

“We’ve had to diversify and grow our online business,” she explains.

“Our factory outlet saw some panic buying in March when people started working from home, but April really crashed. Our sales were down about 60% that month, and it was a huge weight on my shoulders. We all went a bit greyer, to be honest.”

But Lesley was not prepared to let crisis undo decades of hard work. “In a sense it’s been a good thing for us really. It made us realise we needed to grow our own brand and our own retail – and quite frankly, we want more of that. We couldn’t go out and do trade fairs or food festivals any more. So we have to think differently, we had to evolve.”

The small team of six quickly got to work, preparing to sell direct to the public. They updated the company website and social media profiles and added other gourmet food brands to its range.

Direct sales through its factory outlet and mail order businesses now account for as much as 30% of Pine Tea & Coffee’s sales.

“We stayed open during the lockdown as an essential service, and people still love coming to the factory door,” explains Lesley. “We’re roasting fresh coffee every day, and they can sample a new type of tea or learn how to make a good cup of coffee at home.”

At the heart of home brewing

Australia is synonymous with café culture. But COVID-19 shifted coffee consumption habits, with Nielsen reporting a 39% drop in the number of trips to the coffee shop in the four weeks ending April 7 2020.

Instead, Australians drank coffee at home. Pine Tea & Coffee saw increased interest in pour overs, cold brew filters and AeroPress coffee makers. “I think people wanted smaller, simpler things to use at home, not big expensive espresso machines,” Lesley says.

Then there’s the comfort of preparing a pot of tea. During the crisis, Pine Tea & Coffee also saw a significant increase in demand for its loose leaf products.

“We supply retailers and specialty tea stores who repackage our teas with their brands, and their online sales are also booming. We’re seeing a lot more bulk orders from that market, too,” says Lesley.

She says customers are also consciously choosing to support local businesses like hers, and she wants to do her bit by promoting other small companies.

Lesley encourages her customers to buy her new selection of gourmet foods from local suppliers. “I tell them, then we're making profit, the person who made that item is making profit and the person who sold the ingredients is making profit. In one purchase you've helped all those small businesses. That keeps the country going around, which is so important at this time.”

Australia Post’s research reinforces this desire to buy local , with 23% of surveyed shoppers saying they’re more conscious about buying from such businesses.

Setting up for further online growth

Pine Tea & Coffee already had robust systems in place for its wholesale business. But sending lots of small parcels direct to consumers around Australia was a different proposition, especially with growing order volumes. By August, online orders had quadrupled.

“Initially, we had someone popping up to our local post office. But they couldn’t physically carry all the satchels, they were dropping them!” Lesley says. “So our local Australia Post business centre set us up with a MyPost Business Account and regular warehouse pick-ups.”

She says this made things much easier. “We don’t need to hand-write all the labels and forms anymore. And we get a lot of weekend orders, so we can adjust our pick-ups to accommodate that.”

Pine Tea & Coffee quickly saw potential cost-saving benefits, with their MyPost Business account tracking volumes automatically. “If we continue growing on this trajectory, we’ll trigger the next band of discounts very soon,” says Lesley.

As many as 60% of Pine Tea & Coffee’s online customers are new to the business, but Lesley says she is seeing repeat orders. “Once people taste our teas, they come back and often buy in larger sizes because it’s great value,” she says. Having a consistent and reliable delivery partner gives her confidence in the potential of her growing direct sales business.

“We can see it growing, and we have the systems in place to cope with the growth,” she says. “Right now, you've got to rely on word of mouth, through social media, and your reputation and your product.”

She also believes having many smaller customers is much better than focusing on a few bigger ones. “One sector can go down, but it's never going to affect your whole business. I think we’ll come through this crisis stronger.”

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