The Price of Tea in China

At Seven Cups tea house, owners Austin and Zhuping Hodge connect specialty tea growers in China directly with sippers in Tucson.

September 1, 2014

FeaturesIssue 8: September/October 2014

Just east of tucson Boulevard on Sixth Street, tucked into the solid row of small shops facing Rincon Market, is the closest thing in Tucson to the Harry Potter novels’ Diagon Alley—a gateway into a vast, dramatic reality hidden in plain sight. This unlikely door to another dimension is Seven Cups Tea House, serving fine Chinese tea and snacks and selling bulk tea and teaware since 2004. For everyone who’s driven by and noticed it but never stopped, the persistent green awning in a strip where businesses regularly come and go presents a mystery: How could so rarified an enterprise have survived 10 years? Through a brutal recession? In Tucson?

Anyone who’s been through the door has glimpsed a significant part of the answer. Not for nothing has Seven Cups won a double Best of Tucson—Best Tea Service and Best Bulk Tea Selection—every year since it opened. Further afield, it’s garnered a slew of national and international honors, including being named one of the best places to drink tea in America by Travel+Leisure. (The other shops cited in the 2012 list are in Boulder, New York City, San Francisco, Portland, and Washington, D.C.) Of course, Seven Cups is lovely—it’s simply the nicest place in town to meet a friend and talk or sit and read. (Some of your fellow Tucsonans visit Seven Cups every day.) But there are larger answers to the question of its success, all of which open up onto the great world behind it.

To begin with, according to Austin Hodge—who along with his wife, Zhuping Hodge, and manager Andrew McNeill, runs Seven Cups—you must understand a bit about tea, the world’s most popular beverage.

Until Seven Cups owners Austin and Zhuping Hodge opened shop, no fine quality Chinese tea could be purchased in the United States.

Until Seven Cups owners Austin and Zhuping Hodge opened shop, no fine quality Chinese tea could be purchased in the United States.

“Tea” comes from the Chinese cha and refers specifically to an infusion made from the leaves of Camillia sinensis, a shrub native to Yunnan in southwestern China. It’s a hardy plant that flourishes in any warm, well-drained, acidic soil, but until the 19th century grew only in the Far East, and almost exclusively within China, where it has been cultivated for thousands of years. In the mid-1800s, the British, who’d developed a serious tea habit and the trade imbalance to go with it, smuggled plants and a few workers out of the country, and began establishing large plantations and aggressively marketing the broken black leaf they produced. Brewed strong and made palatable and marginally nourishing by the addition of sugar and milk, plantation tea became the primary fuel of British workers. Today, it’s grown and mass-processed in areas around the world where the climate’s suitable and labor is cheap. (Most of Lipton’s U.S. tea supply, for example, comes from Argentina.) Plantation methods produce an inexpensive staple with no variation from one batch to the next. Its price—around a couple of dollars a pound wholesale—is set at auction by commodity brokers. Sweetened, flavored, spiced, cut with milk, served hot or iced, plantation tea is what most of us know as tea, and it accounts for the lion’s share of the $40 billion global trade.

That’s one tea universe. It has essentially nothing to do with the other, which is what the trade calls “specialty” or fine Chinese tea. This is what Seven Cups sources, brokers, sells onsite and online—and, of course, pours. The shop’s multipage menu of more than 100 traditionally grown and produced Chinese teas from 42 producers in 10 provinces reflects the dizzying breadth and intricacy of Chinese tea culture.

In the Seven Cups shop in Tucson, Zhuping shows how to prepare a pot of tea for brewing.

In the Seven Cups shop in Tucson, Zhuping shows how to prepare a pot of tea for brewing.

Fine-quality Chinese tea comes in six categories—white, yellow, green, black, oolong, and puer—and in countless poetically named styles produced by four to six million farmers and 300,000 to a half-million artisans working under the supervision of local tea masters using methods refined over centuries. The final product depends upon the tea cultivar, age of the plant, climate, and soil, and the number and age of the leaves hand-picked from each stem, as well as by virtually endless variations in how the leaves are prepared—steps may include withering, flattening, rolling, steaming, frying, compression, oxidation, and even fermentation—resulting in a different fragrance and flavor profile for each tea. The goal of Chinese producers is quality, which requires finicky hand-processing at every stage. Prices for famous teas can reach thousands of dollars a pound and are set by an insatiable, newly wealthy internal market. The best way for Westerners to understand what tea means in China is to think of the culture and appreciation of wine: A traditional Chinese saying is that even if you study tea all your life, you can never know the names of all the teas.

Until Seven Cups came on the scene, no fine quality Chinese tea could be purchased in the United States, unless you happened to know one of a handful of obscure West Coast dealers. And this is where the story of Austin Hodge—Tucsonan by way of San Francisco, mental health therapist turned self-taught coder, software engineer, and computer consultant—intersects that of Camillia sinensis.

“In 1991, I was writing code when a friend at the UA introduced me to a green tea that his father sent him from China,” he explains. “I was blown away and tried to find out where I could buy some. It was not available. Period. Since China had been open for a while, that seemed to violate every law of economics.

“I’m a problem-oriented person—I found this intriguing. And I really wanted the tea. So I decided to learn basic Chinese, develop a network of friends there, and just go.”

He went, found his tea, and returned again and again, traveling the country, drinking tea, and making connections. As “a big white guy fascinated by tea,” he stood out wherever he went, and was welcomed.

“The Chinese market was, and still is, very fragmented, very local. I quickly learned that you can’t go through middlemen—they keep their sources secret, so you never know what you’re getting. The other thing I realized is that you can’t do business in China without relationships. The closer the relationship, the better the product and the more reasonable the price. I made friends with all sorts of people who touched tea in some way—actual producers were only the tip of the iceberg.”

At the same time Hodge was spending his free time in China, he was coming to loathe the increasingly corrupt government procurement practices of the IT consulting industry. Wanting out, he started to think about using his China connections to make a living in the tea business. He envisioned Seven Cups as the first company dealing in Chinese tea with a completely transparent supply chain.

Andrew McNeill, the Hodges’ “right-hand man,” moved to Tucson to work for Seven Cups; thanks to his extensive tea scholarship—and a year and a half in Taiwan—he’s now fluent in Mandarin.

Andrew McNeill, the Hodges’ “right-hand man,” moved to Tucson to work for Seven Cups;
thanks to his extensive tea scholarship—and a year and a half in Taiwan—he’s now fluent in Mandarin.

“Everyone thought it was an absolutely terrible idea. The fine tea trade had always been run on secrecy and proprietary sourcing. And my Chinese friends were certain that Americans were incapable of appreciating good tea, and would never pay for it.”

Nonetheless, he quit his job and started working on the company in 2001, incorporating in 2002.

“My goal was to assemble the finest possible collection of Chinese tea, and to promote the people who produce it. I knew how and where to get the tea. The part that took ingenuity was selling it.”

In the meantime, he’d met Zhuping, a native of the central Chinese city of Chongqing who’d also given up a lucrative career in a corrupt business—in her case, commercial real estate development—to devote herself to tea, spending several years studying to become a certified tea culture instructor. They married in 2003, and opened the shop in 2004, making it the first traditional Chinese tea house in the Southwest.

Seven Cups began with online sales—Hodge designed the website, which, 12 years later, is both a store and a vast, ever-expanding compendium of tea lore—and at St. Philip’s Plaza Farmers’ Market, where the Hodges gave out tastes and sold tea each Sunday. (Seven Cups continues its outreach, offering tastings every day, “tours” of the shop’s offerings, plus a variety of classes and special events, including an annual two-week tea tour in China.)

“So when we opened the shop we already had local customers, as well as buyers who’d found us online.” Today, Seven Cups ships to retail and wholesale customers in more than 90 countries, including China.

Zhuping is the company’s negotiating and logistics muscle. She spends three months a year in in her native country, traveling, researching, sourcing tea, and visiting family and “tea-friends.” Her sister runs the company’s office in China, and oversees staff there. When she’s in Tucson, Zhuping gives classes, hires and trains the shop’s sweet, knowledgeable staff, and spends time on the phone at night, doing business with China. Along with Tiffany Mercer, a Tucson pastry chef, she makes a number of the traditional tea snacks offered on the menu.

“I don’t worry about someone else competing,” Zhuping says. “What we do is hard. We never relax. But we are happy because it is all for tea.”

Andrew McNeill, the Hodges’ right-hand man, is similarly dedicated. He worked for a while in a tea shop in his native Florida before moving to Tucson in 2007 to work for Seven Cups, drawn by the fact that it was the Florida shop’s only transparent wholesaler. McNeill has since become fluent in Mandarin, thanks to 18 months’ study in Taiwan, and is deep into tea scholarship and research.

“No one owned this market before Austin and Zhuping started because no one wanted it. So it’s ours and we’re playing a long game, growing it through education and experience, one customer at a time. It’s slow but it’s lasting.  It’s also fun,” he says.

“The shop has funded the rest of the business,” explains Hodge, when asked about how the various parts of the operation fit together. “Most of the income from the shop goes to rent, payroll, and buying stock. We’ve grown every year.

“We run it very attentively. If you’re going to make a go of a small business in this town, given the low-wage economy, the reluctance of the local bankers to invest, and the onerousness of the city’s—and especially the county’s—rules, you must focus on quality and be on top of every detail. There’s never any dust in here, for example. Every order ships the same day we receive it. We know everything about our teas, down to what our producers give their workers for lunch. We know because we’ve eaten with them.”

Is Seven Cups worried about Starbucks’ recent acquisition of the 300-shop strong Teavana chain, and its plans to open a thousand more shops over the next few years?

“On the contrary,” Hodge smiles. “Starbucks is great at what they do. They’re going to help us by introducing millions of consumers to the idea of something better. Inevitably, some of those people will get bored with flavored tea drinks and mediocre product and become curious about what tea really is. And we’ll be right here.

“Tucson has proved to the rest of the country that average Americans can appreciate the best Chinese teas, and as long as Seven Cups’ doors stay open, will pay for them.”

Seven Cups Fine Chinese Tea. 2516 E. Sixth St. 866.997.2877.

Renée Downing has been eating and writing in
Tucson for nearly 40 years.

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