When he was only twenty years old, Arsen Avakian left his home country of Armenia to find new possibilities in America. He arrived in Chicago with only a couple hundred dollars and a dream to create a successful business. Now, eighteen years after founding Argo Tea, his business’ success is astounding.
When Argo Tea opened in the summer of 2003, coffee was unquestionably the drink of choice in America. In a business profile with Time, Avakian said, “I realized that I see a lot of Americans drinking coffee, but nobody in this country is drinking tea. A nasty Lipton tea bag is all Americans knew about tea.” Unlike the existing tea stores, which specialized in dry tea that could be purchased by the pound and brewed at home, Avakian modeled Argo after his biggest competition and one of the most successful beverage companies – Starbucks. In fact, the first Argo location, a tiny 900 square foot café in Lincoln Park, opened directly across the street from a Starbucks in hopes of turning a few coffee drinkers into devoted tea lovers. Priced around four dollars a cup, Argo’s luxury tea concoctions proved to be on a completely different level than the grocery store tea bags people were used to. Soon, one store turned into dozens, and Whole Foods began selling bottled Argo Tea beverages in their grocery stores. Avakian hopes the business will continue to grow and expand beyond the Midwest.
Although Argo Tea’s business model relies more on adapting existing ideas rather than innovation, Avakian’s original drink recipes are truly one of a kind. Lipton tea will never be found on the menu. Instead, the names of his original concoctions, such as Earl Grey vanilla crème, Teapuccinos, Tea Sparkle, Red Velvet, Ginger Twist, and Carolina Honey, sound just as luxurious as a Starbuck’s Frappuccino. Sangria Tea and Bubble Tea are also fan favorites.
It is interesting to look at Avakian’s success story from both the American and Middle Eastern perspectives of creativity. According to Todd I. Lubart’s work Creativity Across Cultures, the western world defines creative work as something new and useful. However, middle eastern countries, such as Avakian’s home Armenia, believe creativity has less to do with novelty. Instead, they place a greater emphasis on reinterpreting traditional ideas. According to this Eastern definition, tweaking the Starbuck’s business plan to carry out his goal of introducing tea to America was a sign of pure creative genius. It could also be argued that Avakian’s real creativity is knowing where to change the existing business model. He examined Starbuck’s to see what was working and what he could improve. For example, he realized that Starbuck’s was making a lot of profit through selling bottled drinks. Therefore, Avakian decided to also produce bottled beverages in an effort to create an awareness of Argo Tea in states lacking an actual Argo Tea location. Then, when Argo Tea expands, consumers will already have some awareness of the brand from seeing products in their local Whole Foods.
Although his creativity and innovation might not be at the level of Steve Jobs, Avakian believes elevating American’s perception of tea was no small feat. He even goes as far to say Argo is the “Apple compared to the Starbuck’s PC.” He believes his business is a groundbreaking contender in the highly competitive beverage industry. Although Argo’s revenue is pocket change compared to the billions of dollars the coffee behemoth makes every year, Avakian’s business savvy and creative problem solving cannot be denied.
You can read the Time’s Argo Tea profile here: