Sidestepping Starbucks With Cafes That Sell Tea

By Keith Schneider

The New York Times
Late Edition – Final
September 26, 2007 Wednesday

IT isn’t every cafe in America that responds to the complaint
"I’m thirsty" with a glass of iced tea. But here in the nation’s
third-largest city, a fast-growing chain called Argo Tea is selling
just that notion.

Argo Tea, a four-year-old homegrown company, has developed
a distinctive brand that has captured the palate of young
professionals. From its novel recipes for sweetened iced teas —
Bubble Tea, a mix of Indian black tea and coconut pearls from the
Philippines, is very popular — to its signature interiors of greens,
reds and browns, the brand has become so well known that this month
the company opened its eighth cafe, in the Lincoln Park neighborhood.

It plans two more by the end of the year.

Along with hot and iced tea — and Illy coffee — the cafes sell
sandwiches and pastries, some baked on the premises.

Sales are expected to reach $5 million this year and nearly $10
million in 2008, company executives say. The concept has proved so
successful that Argo Tea is planning cafes in other cities, starting
with Boston or Washington in 2009.

The chain, run by two former tech experts, reflects a common dream
among cubicle-bound workers who sometimes see themselves as business
entrepreneurs, restaurateurs — or some combination.

The idea for a chain of tea cafes was hatched by Arsen Avakian, 31,
and Simon Simonian, 32, boyhood friends from Yerevan, Armenia, who
emigrated to Chicago in the 1990s for postgraduate study. Both ended
up in high tech, Mr. Simonian as a computer scientist and Mr. Avakian
as a specialist in start-ups who recruited millions in venture capital
to open a software company.

After the dot-com bust, Mr. Avakian spent a lot of time in coffee
shops, noticing how many customers they attracted. "I asked myself,
what would be the closest cousin of coffee?" he said. "In Europe
that’s easy. It’s tea. But here in the United States, tea is one of
the least consumed beverages. People in Chicago said how stupid can
you be, starting a business with tea as the dominant drink? I said,
perfect. That’s the opportunity I’m looking for."

Mr. Avakian, sitting in an Argo cafe on West Randolph Street, recalled
how he had persuaded Mr. Simonian to join him in preparing a business
plan and managing the new company. The partners hired Mark A. Cuellar,
a Chicago architect, to design the cafes’ interiors, which include
long library-style tables with outlets and Wi-Fi for Web surfers.

They also came up with innovative tea drinks that sell for less than
$4. Among them are MojiTea, made with Armenian mint and fresh lime,
and Tea Squeeze, a mix of Egyptian hibiscus leaves, fresh lemon juice
and sugar cane.

In effect, Mr. Avakian and Mr. Simonian went from I.T. to iced tea.

They are not, of course, the only high-tech executives who have
responded to turbulence in the industry by opening restaurants. A
year ago, Satish Rahi, 47, a computer scientist and a consultant in
Edison, N.J., and his wife, Kirti Rahi, 37, a programmer, opened the
Piquant Bread Bar and Grill, a 76-seat Indian fusion restaurant,
in New Brunswick, N.J. The restaurant has been well received, but
Mr. Rahi still works part time at Paragon Consulting, the I.T. company
he and Mrs. Rahi started in 1994.

"We have a pretty loyal customer base," Mr. Rahi said. "But there is
not enough business yet to say we made it. I’m not ready to give up
my day job."

Doug Lenihan, 39, did give up his day job, in semiconductor sales, to
open a pit-barbecue restaurant, Goody Cole’s Smokehouse in Brentwood,
N.H. Four years later, it is prospering and takes in much of its
revenue from takeout.

A native of Chappaqua, N.Y., who graduated from Southern Methodist
University and married a Texan, Mr. Lenihan spent much of his early
sales career in Plano, Tex.

"I got hooked on backyard smokers," he said. "As my sales career
progressed from Texas to Boston, I kept coming back to barbecue. It
was one of those things I dreamt about and talked about.

Semiconductors are cyclical. When the downturn came in 2002-2003,
I just said to myself this is as good a time as any."

Though Argo Tea’s story, as told by Mr. Avakian, reflects the same
spirit of risk and entrepreneurship, it is past the start-up phase.

The company employs nearly 150 people, most part-time, and offers
medical benefits to those who work at least 20 hours a week. The
company gives raises periodically based on how well workers score on
a written test.

Objective evaluations are only one ingredient in the partners’
recipe. "Our business appeals to the senses and desires," Mr.

Avakian said. "Things have to be right, feel right, taste right.

It’s much more subjective than high tech."

From: Emil Lazarian | Ararat NewsPress

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Emil Lazarian

“I should like to see any power of the world destroy this race, this small tribe of unimportant people, whose wars have all been fought and lost, whose structures have crumbled, literature is unread, music is unheard, and prayers are no more answered. Go ahead, destroy Armenia . See if you can do it. Send them into the desert without bread or water. Burn their homes and churches. Then see if they will not laugh, sing and pray again. For when two of them meet anywhere in the world, see if they will not create a New Armenia.” - WS