Tea Is a Business, Not a Lifestyle: Jon Cooper on the Uncomfortable Economics of Specialty Tea
After nearly two decades building PekoeTea in Edinburgh, Jon Cooper has few illusions about the realities of the speciality tea business. From direct sourcing and blending to matcha, transparency and climate change, he argues that the industry needs fewer romantic narratives — and more honest conversations about what consumers actually want, what businesses need to survive, and how value is really created.
Jon Cooper did not originally plan a career in tea. While studying electronics with music at the University of Glasgow, he spent much of his free time in a Czech-style tea house near the university. He knew little about tea at the time, but curiosity quickly turned into something more serious. By 2005, he was travelling to China to meet suppliers. A first attempt at running a tea shop and bar followed — and failed.
Rather than ending his involvement with tea, the experience became the beginning of PekoeTea.
Founded in 2008, the Edinburgh company has evolved from a small speciality tea retailer into a business encompassing direct sourcing, wholesale, blending and flavouring, white label production and exports. Along the way, Jon’s own philosophy has changed too: from tea purism towards a much more pragmatic understanding of what it takes to make speciality tea commercially sustainable. We spoke about what nearly twenty years in the industry have taught him.
You founded PekoeTea in 2008, but your relationship with tea started earlier. How did it begin?
It really started when I was studying electronics with music at Glasgow University. Around the corner was a Czech-style tea house owned by Martin, who was also a jazz musician and became a good friend of mine. I spent a lot of time there between lectures just drinking tea and hanging out.
At that point, I knew virtually nothing about tea.
Towards the end of university, I moved back to Edinburgh and started wondering whether there might be a business in selling it. I have never been very good at taking things at face value, so instead of simply buying tea from wholesalers, I started searching online and contacting suppliers in China directly.
In around 2005, one of them invited me to visit. I went out there knowing almost nothing and had my mind completely blown. I became obsessed with learning.
My first business was a small shop and tea bar in Edinburgh. Financially, it didn't work. I had no experience running a company, spread myself too thin and made plenty of mistakes. But I had already imported tea, so I needed to find a way to sell it.
That experience also showed me that there was growing interest in speciality tea. JING Tea had started around the same period and had established an online presence, while most of the mainstream market was still dominated by traditional high-street tea companies.
In 2008, after the first business failed, my family and I regrouped and started again as PekoeTea.
And I should probably say something that people sometimes avoid saying: I loved tea, but I also wanted to make a living.
If you're starting a business, of course you want it to make money. I think the tea industry sometimes romanticises people's motivations. Passion matters, but a business still has to function as a business.
2. You have watched the UK speciality tea market evolve for almost twenty years. What has genuinely changed?
To understand the British tea market, you have to understand its history. Britain describes itself as a nation of tea drinkers, but the overwhelming majority of what people drink is still everyday supermarket tea bags. Tea is treated almost as a staple product here. It is associated with comfort: something goes wrong, you put the kettle on.
The interesting contradiction is that British consumers often feel that they understand tea because they have consumed it all their lives, while their exposure to the diversity of tea can actually be quite limited.
That creates a different challenge from coffee. Speciality coffee managed to give consumers something immediately recognisable. Coffee is strong, functional and often consumed with milk. You get caffeine, body and flavour immediately.
Speciality tea can be much subtler. If somebody doesn't already have a palate trained to recognise those nuances, you can present them with an exceptional oolong or Darjeeling and they may simply wonder what they are supposed to be tasting.
The coffee industry also benefited enormously from the way large companies responded to speciality coffee. Instead of completely resisting it, companies such as Nespresso adopted some of its language and ideas and brought the concept of premium coffee to a much wider audience.
Tea hasn't really done that in the same way. There is still a huge gulf between mainstream commodity tea and speciality tea, and I don't think the industry has built a consistent bridge between the two.
Direct sourcing has become one of the most powerful narratives in speciality tea. What does it actually mean in practice?
We buy directly where it makes sense, but I think we need to be much more honest about what direct trade actually involves.
For example, we currently buy Assam directly from a cooperative of estates. We can do that because our volumes are now large enough to bring in perhaps two or three pallets at a time — around two tonnes
At that scale, it becomes economically worthwhile.
When I was smaller, I worked through an agent in Kolkata who helped consolidate products for me. Today, we buy some Darjeeling directly, certain small-batch Chinese teas directly, and other teas through people in the country of origin.
Japan is mixed. Some teas I source directly, but in other cases I work through a specialist intermediary whose quality I trust and whose relationship with the producer is transparent.
And I don't see a problem with that.
If there is one intermediary, I know where the tea comes from, and the person adds genuine value to the process, why should I pretend that cutting them out automatically makes the product better?
There are also situations where using a large European importer is simply more sensible.
For some of the black tea we use in blending, for example, we are too small to import a container ourselves but too large for small shipments to be economical. So we work with German importers who handle consolidation and compliance testing.
The herbs and spices we use are another example. These companies undertake pesticide analysis and other compliance work that would be extremely expensive for a small company to replicate independently.
Direct trade isn't automatically synonymous with better tea, better ethics or better business. Sometimes it is the right approach. Sometimes it isn't.
You are particularly critical of the way transparency is sometimes communicated in the tea industry. Why?
Because there is a lot of romanticisation.
A small company can find a producer online, order tea, create some attractive packaging and describe it as directly traded. But what has actually happened behind that product?
Has it been tested? Is it compliant with food-safety regulations? Does the company understand batch numbers, documentation, pesticide limits and import requirements?
Tea has an unusually low barrier to entry compared with many food and beverage sectors. You can effectively start a tea company from your kitchen with a few pouches, a printer and a Shopify website. That accessibility sounds positive, but it also creates problems.
The consumer has very little way of differentiating between somebody with years of sourcing and compliance experience and somebody who started importing tea six months ago.
Then there is the question of value.
Coffee roasters can buy green coffee from an importer and still have a very clear reason for existing: they roast it. They transform the product. If you're buying finished tea and simply reselling it, you have to ask yourself: where am I actually adding value?
If your only answer is your supply chain, that becomes difficult because there are only so many small producers and eventually multiple companies are sourcing very similar teas.
That's when the storytelling can start becoming exaggerated.
PekoeTea itself moved from a purist approach towards blending and flavouring. What changed your thinking?
When I started, I was very much a tea purist. I wanted to sell pure tea. No flavouring. No blends. And, looking back, I could also be quite elitist about it.
But eventually I had to listen to what customers were actually asking for. They wanted accessible flavours.
If we were going to sell flavoured teas, however, I didn't want to buy finished products from a catalogue and simply put our name on them. That didn't feel like we were contributing anything.
So my wife and I spent roughly a year learning how flavouring and blending worked.
The actual manufacturing process is protected knowledge in this industry. People don't simply tell you how to do it. We visited suppliers, talked to ingredient companies, experimented and eventually developed our own process. That became a turning point for PekoeTea.
Today, blending and flavouring are a major part of what we do, but it hasn't reduced my interest in single-estate tea. If anything, it has given us a commercial structure that allows me to continue buying those teas.
And I think the speciality sector needs to get over some of its prejudice towards flavoured tea.
A flavoured tea can still be carefully constructed.
Take our whisky teas. Before we add flavouring, we might blend four or five different base teas to reproduce the structure and profile we want. The flavouring then accentuates what is already there.
That's craftsmanship too.
Does that also change how you think about tea education?
Completely. I don't think you educate people by making them feel inadequate.
Sometimes specialty tea education seems to begin with the assumption that the consumer needs to acquire enormous amounts of technical knowledge before they're allowed to appreciate tea.
But most people don't care about oxidation percentages or altitude.
They want to know: Does it taste good? Can I make it successfully at home? Do I trust the company selling it?
Those are legitimate questions. A flavoured tea can actually become a gateway to deeper tea knowledge. Someone might come into our shop because they are interested in whisky. I can give them one of our whisky teas and explain why we chose different Assam or Chinese teas for the base, how those origins contribute different flavours and how we built the blend.
Suddenly, they're learning about origin and processing through something they already understand. They haven't been lectured. Their curiosity has been sparked.
I think that approach is much more productive.
Matcha has transformed café menus over the past few years. Do you see it as a structural change for tea?
Matcha consumption has definitely increased, and the baseline will remain higher than it was before.
But I distinguish between that and the extraordinary growth phase we've just seen.
Consumers are trend-driven. Some of the people who adopted matcha because it was fashionable are already moving towards whatever comes next — powdered hojicha or another product.
And much of what is being sold as matcha culture in cafés isn't really about traditional matcha.
People like the colour, the aesthetics, the syrups, the milk and the association with wellness.
That doesn't necessarily translate into somebody becoming a tea drinker.
We see people drinking matcha who have absolutely no interest in drinking sencha, oolong or black tea. So I don't think matcha has necessarily done what some people assume it has done for the broader tea category.
There is also enormous confusion around grading. We constantly hear cafés insisting that they need “ceremonial grade” matcha and then using it in flavoured lattes.
Different products exist for different applications. Culinary matcha isn't automatically bad matcha. It has a different purpose. The bigger concern is supply.
Demand has risen enormously, while production has physical limits. That will put increasing pressure on agriculture, quality and sourcing. The industry needs to be careful about the claims it makes.
You receive many enquiries from people wanting to start tea brands. What would you tell somebody entering the sector today?
First: work out how much money you think you need and multiply it by four.
Tea businesses require much more capital than people expect. You need stock. Packaging. Ingredients. Warehousing. Compliance. Equipment. Cash flow. And if you're sourcing directly, you may have to purchase volumes long before you sell them.
Second: if possible, work for an existing tea company first.
Learn how the industry actually functions. I find it extraordinary that people sometimes approach us saying, “I love tea, I know nothing about the business and I have no money, but I want to launch a tea brand.”
There aren't many industries where you would assume you can enter with no knowledge and no capital. And if your plan is simply to launch another national online brand selling single-estate tea, I would be extremely cautious.
The market is already crowded, and the audience for those products remains relatively small.
That doesn't mean there is no space for new businesses. I would actually like to see more micro-blenders creating original products, developing their own recipes and being transparent about how they make them. There is value there.
But you have to think about tea as a business. It isn't enough to say you're passionate about tea.
You have said that some of the most commercially successful products are not necessarily the teas that tea professionals talk about most. What does the market actually buy?
That's one of the interesting disconnects. We supply high-end hospitality, including afternoon tea, and people overwhelmingly gravitate towards accessible blends and flavoured teas.
The customer may have a menu containing numerous estates, flushes and origins, but unless they are already tea enthusiasts, that amount of information can actually become overwhelming.
They came for the experience, the food, the cakes, the atmosphere — and tea is one part of that experience. The same applies in retail.
Our whisky range is enormously important commercially. Five teas in that collection account for a substantial part of our business. Our citrus-based blends also perform extremely well internationally.
Meanwhile, some beautiful high-end Japanese teas or Dancong oolongs might sell only two or three kilos a year. They look wonderful on the website. I love having them. Our tea enthusiasts appreciate them. But they are not what keeps the business alive. And that's an important distinction.
Commercially successful products can create the financial space that allows us to continue working with teas that I personally love but which have a much smaller market.
10. Beyond consumer demand, you also see supply as one of the biggest challenges facing tea. What concerns you most?
Climate change.
We spend a lot of time discussing marketing and trends, but there is a fundamental question underneath everything: are we actually going to have enough suitable tea to meet demand in the future?
We already see disruption.
Darjeeling has been affected by drought and changing weather patterns. Assam producers have faced periods where excessive rain increased pest pressure, which in turn created problems around pesticide residues and compliance.
Even some ingredients we use in blends are becoming difficult to source to the standards we require.
That forces us to rethink recipes and sometimes look for alternatives, including ingredients that can potentially be sourced closer to home in Scotland.
I think the tea industry tends to be very focused on immediate survival because margins are difficult and everyone is competing for the same customer.
But we need to start thinking five, ten or twenty years ahead.
There is another difficult question too: how much of that do you communicate to consumers?
People are living through a cost-of-living crisis. They don't necessarily want to be lectured about why they should pay more for tea.
So we need to find a way of communicating these realities without making consumers feel guilty about what they can afford.
11. After everything you've learned, where does PekoeTea go next?
This year, we've actually put a temporary stop on developing lots of new blends. Our range became too large.
We had products that were beautiful but weren't selling enough to justify keeping expensive ingredients in stock. So we're becoming more disciplined about the range and looking carefully at efficiency.
Packaging is one area. Because we manufacture so much ourselves, labour is a major cost. We're looking at simpler packaging formats that still look excellent but require fewer components and less handling.
We're also investing in machinery. We brought in a new tea-bag machine earlier this year that can produce individually wrapped bags, which opens additional opportunities.
We are considering our own teaware for products we already sell in meaningful quantities, such as strainers.
Export is another important area. We're already selling into Japan and the United States, entering Hong Kong and have started working with France. Our whisky teas are particularly successful internationally, alongside several of our citrus blends.
But one project I am particularly interested in is education.
I don't like the idea that basic tea knowledge should always sit behind a paywall. Of course, people deserve to be paid for genuine expertise and teaching. But there is a level of fundamental information that I think should be freely available because the more people understand tea, the better it is for the entire industry.
So we're gradually developing a PekoeTea tea school that will be free to access whether someone buys from us or not.
Ultimately, the objective is to make PekoeTea financially strong enough that we can keep doing the things I love. If we can sell blends and products at meaningful scale, that creates the financial stability for me to continue buying beautiful single-estate teas even if they only sell in tiny quantities.
And I think that's the reality I've come to understand after all these years.
You can be passionate about tea. But to sustain that passion, you have to build a sustainable business around it.
Conclusive Remarks
Jon is quick to clarify that his criticism of the tea industry does not come from having fallen out of love with it. Quite the opposite.
His frustration, he says, comes from believing that the sector can do better. Perhaps that is also what makes his perspective particularly valuable.
Speciality tea frequently talks about provenance, craftsmanship, ethics and education.
Jon Cooper adds another word that may be less romantic, but arguably just as important: viability.
Credit Photos: PekoeTea Website
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