Capital Teas, a four-store chainlet of specialty tea shops based in Annapolis, reminds me of something Kenneth Feld of Feld Entertainment told me about his Ringling Bros. and Barnum & Bailey Circus.

People don’t have to go, said Feld. You have to make them want to go.

I thought of that as I entered the inviting Capital Teas store on Old Georgetown Road in Bethesda.

The shop is elegant, calm and soothing, filled with teapots, books, polished wooden tables and warm wood floors. I felt as though I had been transported to 19th-century London.

Maybe that’s the point.

There’s even a “sniffing wall,” featuring dozens and dozens of loose teas in airtight glass jars, which patrons can pop the lids to smell. The variety seems designed to appeal to everyone from novices (there’s a “starter” tea set) to connoisseurs (Organic Tong Mu Phoenix Lapsang at $33 an ounce).

“You can have the greatest tools in the world, but if you can’t market them, you can’t sell them,” said Peter Martino, a former nuclear submarine officer who founded the chain with his wife, Manelle.

And the guy knows how to market. How else could you get people to spend $33 on some tea leaves?

Capital Teas requires all retail employees to undergo continuous education and training to learn about tea. They even take a written test.

“People buy from people,” Marino explained.

Capital Teas was founded in September 2007; each of its four stores is profitable. The company hopes to gross around $2 million this year, and earn around $300,000 in net profit, almost all of which will be reinvested in the business.

Martino has seven full-time employees and nine part-timers. The stores are in upscale locations — Annapolis, Georgetown, Bethesda and National Harbor. A fifth store is opening in Dupont Circle any day now. The stores range from 350 to around 1,000 square feet.

“I am pouring every dime into the new stores,” said Martino, adding that it costs $125,000 to open a new location.

The company recently moved into a 3,700-square-foot office/warehouse/showroom in Annapolis to aid distribution and online sales, which account for less than 5 percent of revenue.

Martino is not your conventional retailer.

At 47, the U.S. Naval Academy graduate has already (1) made $5 million on a Philadelphia software start-up; (2) lost $1 million on another start-up;
(3) earned a Georgetown law degree; (4) worked for one of the highest-powered litigation firms in the United States; and (5) spent eight months working at the Department of Homeland Security.

He also commutes to Dallas for a couple of days every two weeks, where he runs Conquest eDiscovery, a firm that helps companies limit the cost of litigation by providing a less expensive way to review sensitive legal documents.

Capital Teas and Conquest eDiscovery “are both entrepreneurial ventures in high-growth sectors where I can make a difference,” he said.

Martino got into tea through his wife, whose family had been in the tea business for four generations. During a family meeting in Manhattan, Martino and another relative, who runs Elmstock Tea Company in Australia, one of the largest tea distributors Down Under, visited more than a dozen tea shops over several days.

Martino became a tea fanatic. He went to exhibitions in Atlanta, Las Vegas and elsewhere. He studied other tea companies. He absorbed everything.

The keys to what differentiates the good from the great teas is in the kind of soil where they are grown, whether it is picked by machine or by hand, how it is sorted and manufactured, and how — or whether — it is blended. The single-blend teas tend to be richer-flavored and more expensive.

“It’s much like wine,” Martino said.

He became convinced there was a business in tea retail when he learned that the worldwide specialty-tea market doubled from $5 billion to $10 billion in sales in the last five years. Which means he picked a growth industry.

“Tea is the number two beverage in the world after water, but it is number six in the U.S.,” he said. “My feeling is I could ride the emergence of a hot product in the U.S. And I am betting that tea sales in the U.S. will move from number six to third or fourth over the next decade.”

The Martinos chose the name Capital Teas as a reference to Annapolis, where they opened their first store in a former candle shop they rented for $2,000 a month.

The couple invested $75,000 of their own money and turned a profit the first month, helped in part by the family connection, which provided inventory without upfront payment. Manelle ran the store, which eliminated payroll costs.

To reach customers, Capital Teas uses comment cards, social media sites such as Facebook and e-mail lists. Martino gives PowerPoint presentations, speeches and tastings.

The average customer buys around $25 to $30 of tea. Martino declined to disclose his profits on each sale, but the less expensive teas have higher margins because he is able to buy and sell them in larger quantities. The higher-end teas, which run above $30 an ounce, are less profitable but help enhance the brand and spread word of mouth among connoisseurs.

I asked Martino what his end game is, and he gave me the boilerplate response about how he is focused on growing his customer base and providing great service. Then he added something else: Teavana, the market leader in tea retail with 145 stores, recently announced a $100 million public offering with Goldman Sachs and Merrill Lynch as the brokers.

Hmm. Someone else going public.

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