History
Argo set out to be the Starbucks of tea.[6] Argo Tea was launched in 2003 by three partners: Arsen Avakian, Simon Simonian, and Daniel Lindwasser.[7] Avakian and Simonian are boyhood friends from Armenia. They grew up in Yerevan and emigrated in the 1990s to the United States, where Simonian, a computer scientist, and Avakian, a startup company specialist, teamed up following the dot-com bubble. Avakian first came to the United States as a Fulbright scholar.[8] Lindwasser is a Frenchman who moved to the U.S. in 1997.[9] He is a former management consultant.[10] Avakian's father, Yuri, holds multiple wind and solar technology patents.
The original 900 sqft cafe for Argo Tea, which had 24 indoor seats and 20 patio seats in its 2003 configuration, is located at 958 West Armitage Avenue on the corner of Sheffield Avenue in Chicago.[10][11] The venture, which opened in June 2003,[6] was the first tea cafe in Lincoln Park.[12] It was across the street from a Starbucks.[13] Argo borrowed its name from the story of Jason and the Argonauts in Greek mythology.[14] The original store was financed by its founders, who were all experienced management consultants, without outside investors.[10] They used their own
At first, the company experimented with expansion by distributing boxed dry tea at Whole Foods, but quickly restrategized. Barely six months after opening, Argo was planning expansion in Chicago and beyond.[10] Late in 2004, Argo signed a lease to make its first expansion beyond its original location (at Loyola University in the Near North Side community area on Rush Street).[16] By the beginning of 2006, there was a third location (in the Loop community area on Randolph Street near State) with a fourth on the way.[17] In March 2006,[18] Argo expanded to the South Side of Chicago at the University of Chicago Medical Center, which is located in the Hyde Park community area, with a location that is described as a teaosk, a themed kiosk.[14] By 2007, the company decided to pursue consistency across its locations and began a centralized concentrate brewing process.
Argo opened its flagship New York City location in January 2010 by signing a 10-year lease in the Flatiron Building.[24] It promptly followed with a Chelsea neighborhood storefront and then a Columbus Circle store in the spring.[25][26] It opened a total of four cafes in New York City in 2010, taking advantage of the late-2000s recession, which allowed the company to procure prime retail locations such as Union Square, Columbus Circle and the Flatiron District at reasonable rates. The business replaced a Dean & Deluca in the Union Square neighborhood.[27] Among the investors in the New York City expansion were Sam Zell, Glen Tullman and Oxford Capital.[28] In May 2011, the company added its fifth tea room in New York City.[3]
By 2010, the company eschewed its aspiration to be the Starbucks of tea, "Starbucks is more like Windows PC—it's old, less healthy and designed for everyone—and we want to be more like Mac: young, healthy, cool and a more unique, innovative brand." Avakian said the company hopes to build the Apple of tea.[28] At the time, it was opening its 18th store (14 in Chicago and 4 in New York) and had $10 million in annual sales, making it the largest chain focused on tea, according to Technomic Inc.[28]
In 2011, the San Francisco Chronicle credited Argo as being the company that caused the 21st century tea shop revolution,[30] while Time ran a story claiming that Argo has gotten America to drink tea.[31], the United States market had grown to over 3,000 tearooms, according to the Tea Association of the USA. According to Beverage Digest, between 2006 and 2009, coffee consumption declined 2.3 percent in the United States, while tea consumption rose 4.5 percent.[30] The growth of teas has caused Starbucks to drop the word coffee from its name and build the Tazo brand.[30] Starbucks had a total 2010 revenue of $9 billion, while the entire tea industry was $7.7 billion, including $443 million by the top 6 U.S. tea chains.[31] By early October 2011, Argo claimed 26 locations in four cities (Chicago, New York, Boston and St. Louis) and distribution in 3,000 grocery stores around the country including Whole Foods, Safeway and Dominick's.[31]
When the lease came up for renewal at the original location on April 30, 2013, the company did not extend the deal, but the company would open a “greenhouse” location, with mainly glass walls, near Rush Street the following month.[32][33] By March 2013, bottle drinks, which they had begun in 2010 were 20% of the company's business.[33] By that time Argo Tea had opened a business location in Beirut and had planned to follow that with one in Doha in April 2013. It also intended to open 2013 Middle East locations in Abu Dhabi, Dubai, Kuwait and Riyadh.[34][35] By September 2013, Doha was opened and that month a second Beirut location opened.[36]
Argo Tea signed a licensing agreement in October 2016 with Caribou Coffee to open co-branded stores.[37]
In 2020, Argo Tea refocused from operating cafés to sale of bottled tea drinks, and it was purchased by Golden Fleece Beverages. The company still uses the Argo Tea brand.[5] Argo was noted as the tenth largest seller of tea in the US in March 2021.[38] Golden Fleece Beverages filed for Chapter 11 bankruptcy protection in October 2021 after closing all of its company-owned cafes during the COVID pandemic.[39]
Sustainable foods company Planting Hope bought the company's intellectual property and most of its assets August 2023. Planting Hope plans to discontinue the manufacturing and distribution of Argo’s ready-to-drink tea products to focus on selling licenses to operators of branded cafes. At the time of the sale, Argo had eight remaining franchised cafes, all of which were located on College campuses and operated by food service companies.[39][40]
