Specialty coffee company Royal Cup Inc. is expanding into teas with the acquisition of Teasy Teas LLC.
Birmingham, Alabama-based Teasy, which was formerly known as Portsmouth Tea Co., makes gourmet and artisan teas. Royal Cup will also acquire Teasy’s sister company, Alabama Chai. Terms weren’t disclosed.
Teasy's owner, Marshall Malone, will join Royal Cup as tea category manager.
"Early on, we pinpointed a notable shift toward tea consumption in the beverage industry, especially with respect to the millennial generation,” says Royal Cup's vice president of marketing, Robert Cole. “Our acquisition of Teasy Teas not only provides us with an increased catalog of premium teas to meet that demand, but also positions Marshall Malone within the organization to help us maintain our upward trajectory in the tea market.”
The buyer, Royal Cup, imports, roasts and distributes premium coffee to foodservice companies. Royal Cup's products are found in business offices, convenience stores, chain restaurants and hotels in the U.S. and Caribbean.
Royal Cup isn't the only coffee business adding teas to the model. Peet's Coffee & Tea Inc. partnered with private equity firm Next World Group in August to buy Mighty Leaf Tea in a move to accelerate its tea business. In 2012, Starbucks Corp. (Nasdaq: SBUX) acquired specialty tea retailer Teavana for $620 million. That deal won the coffee chain Mergers & Acquisitions M&A Mid-Market Deal of the Year award.