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GOURMET TEA SALES REMAIN STRONG IN SLOW ECONOMY

More tea lovers are willing to spend an extra 30 percent for the taste.

New York Times

SINGAPORE - The global economic crisis may have dampened the appetite for high-end goods, but one small daily luxury - gourmet tea - has been posting surprisingly strong sales, prompting some tea brands to consider expanding around the world.

With names like Silver Moon, Emperor's White Garden, Gout Russe Douchka and Sakura, Sakura, the teas reflect a wide range of exotic flavors, attracting an almost religious following among tea lovers. While the rarest teas, like yellow teas, can cost almost $1,000 per pound, gourmet teas cost 30 percent more than standard teas on average, making them an affordable luxury for many.

"There is definitely no crisis when it comes down to gourmet tea; our sales have been increasing every year by 15 to 25 percent ever since we started in 1987," said Francois-Xavier Delmas, founder and chief executive of Le Palais des Thes in Paris.

He said the company, which is privately owned, posted annual revenue growth of 19 percent in 2007-08, with sales of $14.2 million.

Le Palais des Thes' experience has been similar to that of other luxury tea brands, as well as specialty retailers.

"Demand for quality products has remained strong," said Mark Daley, chief executive of Dean & DeLuca, a gourmet retailer based in the United States. "People are enjoying more time together, more time sharing with friends, more time home entertaining."

Mariage Freres, a French merchant of exclusive teas, will open a boutique in Hamburg in November and another in Munich in December. It plans to expand to London in 2010 and then to New York and China.

Its director, Philippe Cohen-Tanugi, said the company, which posted revenue of $73.4 million in 2008, could grow much faster if it developed a franchise network, something it declined to do.

"Believe me, so many have called us for that, we could have opened a store a month and become a 'Tea Starbucks,'" he said.

Gourmet tea remains very much a niche segment of the overall tea market, which has grown steadily in recent years, largely because of tea's perceived health benefits, market analysts said.

According to the United Nations Food and Agriculture Organization, world tea consumption increased to 3.75 million tons in 2007 from 2.95 million tons in 2003, the latest available data.

Specialty and gourmet tea is a fast-growing segment within the tea industry. In the United States, it is estimated to account for 8.5 percent of the $2.1 billion in sales in 2009.

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