Mega Brands Collide: Soon, You Can Order 'Oprah Chai Tea' at Starbucks
Starbucks' shareholders got a surprise Wednesday: Oprah Winfrey, yelling to the audience, "You get a chai! You get a chai! Everybody gets a chai!"
Beginning April 29, Oprah Chai will be sold in Starbucks and Teavana stores across the U.S. and Canada. For each cup sold, Starbucks will make a donation to the Oprah Leadership Academy Foundation, which helps allow girls in South Africa to receive a quality education.
Starbucks CEO Howard Schultz announced the deal at the company's annual shareholders meeting yesterday, saying the partnership is a big step forward for Teavana, which it acquired in 2012 for nearly $620 million in cash.
“With the introduction of Teavana Oprah Chai, we are going to elevate the tea experience in the same way we did for coffee," he said.
Oprah has never before officially aligned herself with a company, brand or product, though it can be argued that the endorsements she has made through her Book Club and "Favorite Things" lists are just as good as any collaboration. According to Winfrey, previous offers have never been the perfect fit. "Starbucks is not just a coffee company… it's about nurturing the human spirit," Winfrey said in the shareholders meeting. "What my goal in life has been, what I suppose my brand has become, is nurturing the human spirit."
Schultz and Oprah's unspoken goal: perfectly blending two of the biggest brands in the world.
Teavana Oprah Chai attempts to meld Starbucks' progressive, popular beverage brand with Oprah's female-friendly, affordable-luxury and relatable image. The beverage could be key to molding Teavana's brand, differentiating the tea line from its parent company.
The first Teavana Fine Teas + Tea Bar, which opened in New York City last October, sells high-quality tea beverages as well as snack options that are slightly classier (and more expensive) than the typical Starbucks fare, such as lemongrass ginger rice balls and shiitake mushroom and kale flatbreads. The store is more "zen" than a Starbucks – lots of open space, a wall of tea and low lighting.
Related: Has the Oprah Effect Diminished?
As Starbucks builds Teavana's brand of achievable luxury, no one seems like a better fit than Oprah. In the past, a mere endorsement by Winfrey has been a game-changer for brands on her annual "Favorite Things" list. And, Schultz was careful to clarify that this was much more than merely "an endorsement deal," but instead a full collaboration with Winfrey.
However, in recent years, it's been asked whether the power of Oprah's stamp of approval has begun to fade. With her television show off the air, Oprah certainly doesn't have the visibility she once did. Instead of simply being a tastemaker, Oprah has taken the time post-television to emphasize her role as a humanitarian, a position supported by her Chai collaboration (all proceeds will go to charities, including Winfrey's own, that promote youth education). If Oprah Chai is a success, it will booster Oprah's charitable image and commercial sway, while helping tea become Starbucks' next big thing.
As Teavana grows, Starbucks shareholders have plenty of reasons to be excited: everyone left the annual meeting with a sample of Oprah's Chai. Even better, since last year's meeting, the coffee chain hit record annual revenue of $14.9 billion.