Specialty tea business brews up in Sparks

The packaging may read Harry & David or Hallmark or Martinelli's but the product inside is all Davidson's.

Davidson's is the Sparks-based tea maker and seller of tea-related accessories.

The venerable Harry & David, of Fruit of the Month fame, is one of Davidson's largest customers.

So is Hallmark, the card maker which private labels Davidson's tea for use in gift packages.

As is apple juice maven Martinelli's, which resells Davidson's mulling spice.

In fact, it was the very same mulling spice that helped launch the nearly 30- year-old local purveyor of teas into a nationally-recognized brand.

The company was founded in 1976 by Sharon Davidson to sell loose leaf teas to local grocers when the trend to sell food in bulk was taking off.

She started by selling several teas, along with the needed tea infusers and other accessories such as tea pots, direct to area food markets.

Then the company developed its mulling spice blend and took it, along with its teas, to a gourmet products show in San Francisco.

"It was a wonderful blend we packaged by hand," said John Davidson, Sharon's husband.

"And there were only one or two companies who did mulling spices.

It helped launch the company."

After that, the company grew so rapidly that John, who was then working as a cabinetmaker, joined his wife to help run the business.

That's when they bought from Spice Islands, a spice maker in Reno, a used tea bagger, a furnace-sized machine that bags loose leaf.

"We realized tea bags were where America was at," said John.

Since then, it's been what John calls "normal expansion."

John, who is treasurer and secretary, handles much of the technical side of the business while Sharon, president, takes care of the creative side.

The business is 100 percent owned by the couple.

The company now sells through three large distributors in southern California, Michigan and Illinois that inventory Davidson's products.

It also has a host of sales groups that sell Davidson's product to specialty stores in 25 markets; the tea maker then ships directly to those stores from its warehouse in Sparks.

The company occupies a 25,000- square-foot facility, where it blends, bags, packages and warehouses teas it purchases from China, Sri Lanka, India and Japan.

"Sharon usually has the idea for a blend then we work together to develop a recipe," said John.

"Then we blend small batches and test, test, test for taste and consistency."

Nearly everything is done in house, from the mixing of teas and flavors, to the packaging, which uses watercolors done by a local artist, to photos for advertising and marketing campaigns.

The company employs 10 people during most of the year, and jumps to 25 employees during the summer when it's packaging teas for the fourth quarter's holiday season.

In addition to its wholesale business, which includes its private-label customers such as Harry & David, the company launched retail sales via catalog and, starting three years ago, on the web.

"We initiated the web site because we had so many mail order requests," said John.

"I felt we owed it to the consumers."

The key to balancing it all, he said, is to not undercut your retailers.

There may not be much overlap between its customers on the web and in its specialty retailers anyway.

The most popular product online is a plain box of 100 tea bags probably purchased by cafes and restaurants, said John.

The hot sellers in retail stores are single bags or samples of three that are packaged for the impulse buy.

Packaging is one of the trends that the company strives to keep on top of, said John.

The company is now prototyping packaging for boxes of 25 tea bags.

The packaging is a departure from the company's usual smaller samplers but reflects the way most grocery stores now stock teas.

Another key trend is the tea itself.

"Spice teas were big for awhile," said John.

"Then it went back to strong, non-flavored teas," such as Earl Grey and other black teas, he said.

"Now its Chai," the heavily sweetened, spiced tea from the Mideast.

"We've come full circle."

Then there's green tea, the non-caffeinated tea widely consumed in Japan that has become popular because it's also full of anti-oxidants.

The next big trends, predicts John, are white tea and Roosibos.

The former is a minimally-processed tea grown in many countries that is lower in caffeine, brews to a paler color and has a slightly chocolate taste.

The latter is a South African herb that can be brewed like a tea and has the same benefits as green tea.

Currently the company's top sellers are its Christmas tea blend, apple cinnamon and vanilla-flavored tea.

Another top seller, its Nation's Harvest tea, was made in response to the Sept.

11 terrorist attack.

It was made from tea grown on the only tea estate in the United States, on an island off the coast of South Carolina, and 10 percent of its sales proceeds went to the American Red Cross.

But the company had to discontinue it when the tea growers couldn't produce enough tea for the product.

The company's tea ranges widely in price with the priciest a loose leaf Oolong from Taiwan that is $24 per quarter pound.

The company has 400 stock keeping units, which includes teas, books, teapots, mugs and infusers.

Locals can get a taste of all of it between Thanksgiving and Christmas when Davidson's opens it doors to the public.

Then buyers can create gift packages from baskets, teas and other products sold by the company.

"We originally started it as a way to clean house," said John.

"Now a lot of people come in and buy a year's worth of tea.

And it's become a big deal.

I think we'd have a riot if we stopped doing it."