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New DTC toolkit   //   February 10, 2022  ■  4 min read

‘It starts with the product’: Firebelly Tea’s David Segal on building a modern tea empire

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DTC startup Firebelly Tea is hoping to help the hot steeped beverage reach the celebrity status of coffee.

That’s according to co-founder and CEO David Segal, who joined the Modern Retail Podcast this week. Segal isn’t new to the tea world — he founded one of the biggest tea retailers in North America, DavidsTea. After selling his shares in the company in 2016, he is now embarking on a new tea journey.

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Tea, said Segal, “is the second biggest drink in the world, next to water,” even though, he said, “North America is a little bit late to the party.”

“There’s a reason it’s been around for so long,” Segal said. “It’s really that good — especially high-quality loose leaf tea, which is what we’re trying to show people with Firebelly.”

The idea, for now, is to make a direct-to-consumer destination with Firebelly. But rather than just selling tea leaves, Segal wants to provide the entire experience. So, Segal has spent the last few years sourcing good tea blends along with the best types of tea products — such as kettles and thermoses.

“The key is the product, it starts with the product,” Segal said. “You can have a great marketing message, you can drive trial, but when it’s all said and done, people have to love the product and want to come back.”

Firebelly’s other co-founder is Shopify president Harley Finkelstein. In some ways, the two experiences complement each other. Segal brings the tea industry know-how, and Finkelstein navigates the e-commerce world.

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“I think that the world has changed a lot since I launched DavidsTea, selling online has improved a lot,” said Segal. “One thing Shopify has done is create this whole ecosystem that really levels the playing field for merchants to be able to sell.”

And, for now, that’s the plan. Sell tea and tea products online, and hope to grow the business from there. Of course, given his past retail experience, Segal is still open to the idea of brick and mortar.

“I’m not ruling out the possibility of opening some retail stores,” he said. “I think there might be an opportunity down the road, certainly ones that are highly experiential.”

Here are a few highlights from the conversation, which have been lightly edited for clarity.

On the original DavidsTea concept
“That was 2007. And nobody had really done tea in a fun way on the main streets. You had either British-inspired or Asian-inspired types of tea stores. And it felt like you had to whisper when you walked into them. It was like you had to know something; it was this club — you really had to be into [tea], and [the stores] were intimidating for a lot of people. And I think that’s part of the reason [why], at that time, tea… really wasn’t in the mainstream. And, often these stores were off the beaten path. They weren’t on the main streets. And so that was really the premise of DavidsTea.”

Why Firebelly is online only — for now
“I think that the world has changed a lot since I launched DavidsTea, selling online has improved a lot. One thing Shopify has done is create this whole ecosystem that really levels the playing field for merchants to be able to sell. I mean, in 2007, you were limited in many ways. Yes, people were selling online — we actually launched DavidsTea with an online store, believe it or not — but it was a different world that was very strange back then. E-commerce just wasn’t where it is today… The other thing that’s changed is we’re on our phones a lot right now, a lot more than we were in 2007. That’s a really big difference. I’m not ruling out the possibility of opening some retail stores. I think there might be an opportunity down the road, certainly ones that are highly experiential — even more experiential than DavidsTea. But I think that retail has changed in the sense that the physical store is no longer the point of distribution — it’s the point of discovery.”

A future craft tea movement
“[One reason why] there hasn’t been a third wave tea movement yet is that too often we think of tea as a competitor to coffee, rather than a complement to coffee. I think that’s a key point — you don’t have to stop drinking coffee in order to enjoy tea. Don’t have tea in the morning. I’m not telling you to have tea in the morning — have tea in the afternoon, have it in the evenings. But don’t ignore a beverage that’s as old as the hills — that is one of the top drinks in the world — and that has these incredible artists creating these just amazing teas from [ancient] methods; these multigenerational families have passed down secrets on how to make these incredible teas. And I just think we’re missing out in North America by not drinking [tea] more.”