How to Start Herbal Tea Business in UK USA (Business Plan)

Herbal Tea Business

Do you have these questions in your mind?

  • How to start a Herbal Tea Business
  • How much money do you need to start a Herbal Tea  Business?
  • How much money can you make from Herbal Tea business?
  • What licenses will you need for your Herbal Tea business?

 

In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.

Table of Contents

Why start a Herbal Tea business?

With a worldwide value of around $3.3 billion and a compound annual growth rate (CAGR) of 4.1%, the Herbal Tea industry is becoming one of the world’s most trending and popular industries!

 

Starting a herbal tea business is a smart choice due to the increasing demand for healthy and natural products, the health benefits of herbal teas, ease of production, differentiation from competitors, and eco-friendly practices. 

 

It’s an excellent opportunity for small business owners looking to tap into a growing market and offer high-quality, unique products that promote health and sustainability.

 

The Herbal Tea business is a significant part of modern and traditional culture & is profitable; congratulations on your decision to start this business. 

Market Insight: The Herbal industry is a significant and growing sector in the United States and the United Kingdom.

In the United States, it is valued at around $1.4 billion, while in the United Kingdom, the Herbal Tea industry reached a total of £700 million.

Herbal Tea Business

Types of Herbal Tea Business Models

If you’re interested in starting a business selling herbal tea, there are several different models.

 

1. Retail: 

One option is to set up a retail store where customers can come in and browse a selection of teas. This is a great way to create a physical space for customers to experience the products in person and build a loyal local following.

 

2. Online: 

Another option is to set up an online store to reach a wider audience and be more convenient for customers who prefer to shop from home. This can be done through a standalone website or popular online marketplaces like Amazon or Etsy.

 

3. Wholesale: 

Wholesale is another business model to consider. This involves selling herbal tea in bulk to other businesses, which can be an excellent way to generate large orders and build relationships with other companies in the health and wellness industry.

 

4. Private Label: 

Private labeling is a popular option for businesses creating custom herbal tea blends. With this model, you can work with other firms to develop a unique tea blend that they can sell under their branding.

 

5. Subscription: 

Subscription models are becoming increasingly popular, allowing customers to receive a selection of teas regularly. This can be a great way to build customer loyalty and ensure a steady revenue stream.

 

6. Specialty:

Finally, specialty herbal tea businesses focus on selling teas for specific purposes, such as relaxation, weight loss, or immune support. These businesses often market their products as part of a holistic wellness lifestyle.

 

Note: Your chosen model depends on your goals, resources, and target market. You can find the best fit for yourself and start building a successful herbal tea business.

Herbal Tea Business

Pros and Cons of a Herbal Tea Business

Pros of a Herbal Tea Business

  • Growing demand for natural and organic products
  • Low startup costs
  • Diversification opportunities
  • Potential health benefits appeal to customers
  • Sustainability can be promoted as a business value
 

Cons of a Herbal Tea Business

  • Strong competition in the herbal tea market
  • Limited shelf life of herbal teas
  • Seasonal variations can affect production levels
  • Regulatory compliance is necessary
  • Perishable nature of herbal teas requires careful handling and storage.

Trends & Challenges in a Herbal Tea Business

Trends:

1. Functional teas
2. Sustainability
3. Organic and natural
4. Blends and fusions
5. Innovative packaging

Challenges:

1. Maintaining consistent quality
2. Sourcing of Raw Materials
3. High Competition
4. Consumers are not very familiar with the herbs used in the blends.
5. There are lots of seasonal variations which can affect the teas
6. Herbal teas have a limited shelf life

Investment required to start an Ornamental Plants Business

The investment required to start a herbal tea business can vary widely depending on factors such as the size and scope of the company, the chosen business model, and the quality and variety of the tea blends being offered.

 

While still, the start-up costs for a Herbal Tea Business can range from £3K – £30K in the UK, while in the US, it’s around $5K – $50K. Here are some potential costs to consider.

 

  • Equipment – 

You will need essential equipment to produce and package your tea, such as tea infusers, tea bags, tea tins, and a scale. Depending on the scale of your operation, this equipment may cost a few hundred to a few thousand dollars.

 

  • Ingredients – 

The cost of the herbs and other natural ingredients used in your tea blends will depend on the quality and variety of the elements and the required quantities. A few hundred dollars can be enough to get started, but the cost can increase if you use rare or exotic herbs.

 

  • Packaging – 

Packaging your tea blends will require packaging materials such as labels, bags, or tins. The cost of packaging can vary depending on the quality and design of the packaging.

 

  • Business expenses – 

This includes rent, utilities, insurance, legal fees, and marketing expenses. The cost of these expenses will depend on the business model you choose and the scale of your operation.

 

 

Note: Do thorough research and budgeting to ensure you have enough capital to cover all the necessary expenses and sustain the business until it becomes profitable.

Herbal Tea Business

How much does the Herbal Tea business make?

The herbal tea business has grown in popularity due to rising consumer interest in health and wellness.

 

The herbal tea industry offers promising opportunities for entrepreneurs and tea lovers, with the potential for significant revenue growth.

 

On average, a Herbal tea business in the US makes around $10K – $100K yearly, while in the UK, the revenue can be around £5K – £75K yearly. 

 

While you may not hit these numbers at first as a startup, as you progress and excel in this industry, the average revenue will be easily achievable, and the rewards will be profitable. 

Market Insight: One of the biggest Herbal Tea Business in the US, Celestial Seasonings, earns about $2.5 billion dollars in revenue every year.

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Herbal Tea Business

Types of Herbal Tea 

When starting a Herbal Tea Business, having the knowledge of the different teas you are selling and their benefits and disadvantages is very important. Different teas have different aromas and taste. So, here is a list of some herbal teas you could sell!

 

  • Chamomile tea
  • Peppermint tea
  • Ginger tea
  • Lemon balm tea
  • Rosehip tea
  • Echinacea tea
  • Hibiscus tea
  • Dandelion tea
  • Lavender tea
  • Fennel tea
  • Rooibos tea
  • Lemon verbena tea
  • Thyme tea
  • Nettle tea
  • Sage tea
  • Holy basil (Tulsi) tea
  • Licorice root tea
  • Lemongrass tea
  • Cinnamon tea
  • Elderberry tea
  • Passionflower tea
  • Catnip tea
  • Raspberry leaf tea
  • Yarrow tea
  • Skullcap tea

 

Note: While many herbal teas are generally considered safe, some may have potential side effects or interactions with certain medications. It is recommended to consult with a healthcare professional before selling any herbal tea. 

Herbal Tea Business

Checklist Equipments of Herbal Tea business

In a Herbal Tea Business, getting the right equipment so you can better preserve and store your tea is very important. 

Here is a list of essential equipment that you may need for a Herbal Tea Business  

  • Tea Infusers
  • Tea Bags
  • Tea Strainers
  • Tea Kettles
  • Electric Water Boiler
  • Tea Pot
  • Tea Cups and Saucers
  • Tea Spoons
  • Digital Scale
  • Measuring Cups and Spoons
  • Storage Containers
  • Label Printer
  • Packaging Materials
  • Heat Sealer
  • Sifter
  • Herb Grinder
  • Dehydrator
  • Oven or Toaster Oven
  • Steamer
  • Blender or Food Processor
  • Juicer
  • Stainless Steel Pots
  • Stainless Steel Mixing Bowls
  • Thermometer
  • Safety gear (gloves, protective eyewear, respirators)

Here's a rundown of essential equipment you'll need to brew up some herbal goodness!

1. You'll need blending equipment to mix up your herbal tea blends.
2. Once mixed, you'll need equipment to package them up for sale.
3. To offer samples, you'll need brewing equipment to make and serve tea.
4. You'll also need airtight containers to keep them fresh and prevent spoilage.
5. Finally, you'll need cleaning supplies to keep your equipment and workspace clean and sanitized.

Certification and Registration

Certifications needed for a Herbal Tea Business

While essential licenses such as Business Licence, Health and Safety regulations, and Sales Tax Permits apply to almost all businesses (To read more about the licenses, ‘Click Here to read our Mini Guide’). 

 

Some specific licenses and permits might be needed to open a Herbal Tea business in the UK and the US. Those licenses are as follows :

 

1. Food handler’s permit:
If you plan to prepare and package your tea blends in-house, you may need a food handler’s permit to ensure that you are handling and preparing food safely.

 

2. Organic certification:
If you plan to offer organic tea blends, you may need to obtain organic certification from a reputable certification body, such as USDA Organic or Oregon Tilth.

 

3. Fair Trade certification:
If you plan to use fair trade ingredients, you may want to obtain fair trade certification from a reputable certification body, such as Fair Trade USA.

Note: Obtaining organic certification can be a time-consuming and costly process, and it requires ongoing compliance with the relevant regulations.

Herbal Tea Business

Service List for a Herbal Tea Business

As a herbal tea business owner, you can offer your customers a wide range of services to enhance their experience and foster brand loyalty.

 

  • Hosting tea tasting and education sessions can be a unique experience for your customers, as customers can sample and learn about different tea blends and their benefits. 
  • By selecting their favorite herbs and teas, you could offer custom blending to create unique tea blends. 
  • Subscription services are another option, allowing customers to regularly receive their favorite blends without reordering each time.
  • Wholesale and private labeling partnerships with other businesses can also help to expand your customer base and increase revenue. 
  • Event catering is another service that can help to set your business apart from competitors. 
  • Host workshops and classes on tea blending, brewing, and the benefits of herbal teas. 

 

By offering a range of services, you can create a loyal customer base, set your business apart from competitors, and ultimately grow your business.

A typical day at a Herbal Tea Business

At a Herbal Tea Business, owners or workers take care of the tea & all the other things related to it. Below are the top duties they perform in a day-

1. Preparing the Shop
2. Brewing Tea
3. Serving Customers
4. Providing Recommendations
5. Managing Inventory
6. Cleaning and Closing

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Herbal Tea Business

Steps you can grow your Herbal Tea Business!

Starting a herbal tea business is exciting, but growing it can be even more thrilling! Here are some fantastic tips to help your herbal tea business grow:


1. Spice up your product line: 

Adding new tea blends or accessories to your product line can attract new customers and increase revenue. Experiment with different flavors and varieties to create a unique and irresistible collection your customers will love.


2. Branding is vital: 

Strong branding can help your herbal tea business stand out from the competition. Develop a brand identity that resonates with your target audience and communicates your unique selling points. This can help you build a loyal customer base and increase sales.


3. Go social: 

Use social media platforms like Instagram, Facebook, and Twitter to connect with customers, showcase your products, and build a following. Consistently posting high-quality content can help you attract new customers and keep existing ones engaged.


4. Attend events: 

Attending trade shows, markets, and other events can help you connect with potential customers and distributors, get insights into the industry, and expand your network. This can lead to new sales opportunities and valuable partnerships.


5. Offer promotions: 

Running promotions and discounts can be a great way to attract new customers and increase sales. For example, consider offering a discount on a unique tea blend or a special promotion during holidays or seasonal events.


6. Collaborate with other businesses: 

Collaborating with other businesses in the tea industry, such as cafes or health food stores, can help you expand your reach and gain new customers. Consider partnering with like-minded companies to create unique products or promotions that appeal to your customer base.


7. Packaging is essential: 

Eye-catching packaging and labeling can help your products stand out on store shelves and make a lasting impression on customers. Consider investing in custom packaging or label design to give your products a professional and distinctive look.


By following these tips, you can take your herbal tea business to new heights and create a brand that customers will love and return to time and time again.

Herbal Tea Business

Shall I go for a Herbal Tea Franchise?

Buying an existing Herbal Tea Franchise of a recognized brand is a good idea; however, it is expensive also.

On the other hand, the franchisor will benefit you will all the existing brand image, customer loyalty, advertising, market research & strategies.

In addition, you will get guidance from the franchisor about training the workforce & ambiance of the premises. 

Some of the top Herbal Tea Franchises in the UK and USA:

UK:

  • Bird and Blend Tea Co.
  • Whittard of Chelsea
  • The Tea Makers of London
  • Twinings
  • Pukka Herbs

USA:

  • DavidsTea
  • Teavana
  • Celestial Seasonings
  • Tealuxe
  • Harney & Sons
 

Conclusion

Yes, a Herbal Tea Business is a good idea; the profits are rewarding. However, you need to analyze your capabilities and limitations as there is no restriction to growing.

 

The Herbal Tea market has expanded due to the growing demand for Healthy and calming products.

 

Success in the Herbal Tea business depends on local demand for your products, land and labor availability, and the ability to follow regulatory and certification systems.

 

Happy Blending! 

Want to Save Time in your Business Launch?

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Handpicked inspirational Youtube videos for you

The history of tea – Shunan Teng – YT Channel ‘TED – Ed’ 

How to Make Your Own Tea Blend | 10 Base Ingredients for Making Your Own Tea Blends Easy Ep. 2 – YT Channel ‘Beyond the Bag’

A. Popular herbal teas include chamomile, peppermint, ginger, lavender, lemon balm, and hibiscus.

A. Consider sourcing from organic farms, local farmers’ markets, or reputable herb suppliers. It’s important to ensure that the herbs are of high quality and free from contaminants.

A. Yes, you will need to obtain any necessary business licenses and permits required by your local government. You should also look into obtaining any certifications or permits necessary for selling food or beverage products.

A. You will need equipment such as tea infusers, tea bags, teapots, scales, and packaging materials. You may also need a commercial kitchen or space to blend and package your teas.

A. Consider the cost of the herbs, packaging, and any other expenses such as labor or rent when setting your prices. It’s also important to research the prices of similar products on the market to ensure your prices are competitive.

A. Consider creating a website or social media presence, offering samples at local markets or events, collaborating with influencers, and offering promotions or discounts. It’s also important to have appealing packaging and branding to attract customers.

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