In 2020 US restaurant and foodservice sales declined by $240 billion (22% for the year) placing unprecedented stress on food and beverage suppliers. In Boston, Evy’s Tea founder Evy Chen watched as standing orders for her organic, sustainable, artisan cold-brewed bottled teas cease overnight. Revenue fell 82%. She persevered, observing that COVID lockdowns led to a surge in online transactions and altered long-established consumer buying habits. Within a year she had reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand known as Evy.
Resilient & Resourceful
The tea industry globally demonstrated its ability to recover quickly during two years of disruption. Less is said about individuals who overcame pandemic-related obstacles and the resourcefulness of people that grow, process, and trade tea. To remedy that, Tea Biz is sharing stories of resilience, reinvention, pivots, and clever workarounds that exceeded expectations.
Hear the interview
A Story of Reinvention
By Dan Bolton
Seven years ago Evy Chen pioneered small-batch, cold-brewed tea in bottles. Her tea bar at 253 Amory St., Boston doubled in size in 2018 serving cold tea on draft, kombucha, sparkling drinks, iced coffee, and bottomless boba, as well as treats sourced from local businesses such as Pain d’Avignon and Fomu. In early 2020 her carefully constructed venture nearly collapsed. During the months that followed Evy reinvented the product line as a fresh-brewed tea made from concentrate and sold in cans and available direct-to-consumer.
Dan: COVID lockdowns along the Eastern Seaboard shuttered foodservice operations and led to a surge in online transactions that altered long-established consumer buying habits. The impact on the beverage industry was severe. Tell us about those early days.
Evy Chen: Everybody was freaking out. Right? People were scared, people were binge eating. A lot of people’s insecurities came out during COVID.
I was sitting there watching everyone run around like crazy chickens thinking that’s been my world for, you know, the past 10 years.
I didn’t have a lot to work with, so I had to be very resourceful. Being a woman of color and an immigrant, and a younger person, I think that resilience was always there.
COVID really brought more of a focus and led me to say, ‘this is my game.” Looking around I said, “Okay, now it’s chaos, but within the chaos, where is the opportunity?’
This is hands down the hardest thing I’ve ever done. Everything I’ve established in the past 10 years gone, products gone, clients gone, people gone. I practically had to rebuild a company with not much money during COVID.
Dan: So what were your first steps? Let’s get granular for our listeners.
Evy: Starting from retail pricing, you want to keep your costs at 25%. Right? You have to keep your margin at a certain level, and then it’s reverse engineering.
So, we do an eight-pack right now on Amazon and www.evytea.com.
That’s one single flavor so shipping costs exactly the same whether you buy one or two packs. The math becomes very simple. It’s not necessarily about cutting weight, per se, it’s about what kind of products and services can you provide to add value because your delivery cost is fixed. Our subscription service, for example, lets customers determine flavor and frequency and they are free to swap, pause or cancel at any time.
From a shipping perspective, where we caught cost wasn’t necessarily at the very end of shipping to customers, it’s chasing it all the way back to the beginning of the supply chain and saying, okay, the containers now cost, you know, 15x more than before. So, how do we engineer this map and identify whose truck we can get on that’s already coming this way, instead of hiring our own trucks? We got really, really creative.
We also had to figure out a way to raise more capital upfront and work out a contractual deal with our suppliers. You lock in costs where you can to control expenses. So, it’s a lot of tweaking the P&L [profit & loss statement], tweaking the clock, tweaking the engineering where it hurts the most.
Dan: Describe for listeners your innovation in brewing a tea concentrate to trim costs. Previously you steamed the leaf to release flavor and aroma then relied on small-batch brewing for 16 hours before bottling.
Evy: We developed our own tea base that is a concentrate. It’s one thing I’m most proud of as a food scientist, to scale the exact sensory experience of a craft tea with the stability, the shelf life, and everything that you can imagine about being a larger manufacturer to capture the margin opportunity. So today we are shipping less water, shipping it less often to make more tea at one go. And then it’s a matter of just figuring out a way to stretch that supply throughout the year.
Every single drop of Evy Tea I engineered from the very get-go. But from now on even scaling to 100 million gallons, the product quality will remain consistent, exactly the same. And the sensory experience is just as, if not better, than when I made you a cup of tea at my tea bar.
Dan: How will your rebranding and direct-to-customer sales unfold in 2022?
Evy: I’m not interested in capturing 10 million people next year. That’s a typical play, right, you raise a lot of money, you throw stuff against the wall and see which one sticks, and what doesn’t work, and you move on.
And that becomes a very data-driven business and very data-driven marketing. I want none of that. I would like to capture people and keep them engaged. I want to keep that person as a lifetime friend because this is a long journey for me.
I prefer a lower velocity working with our retail partners online and offline so that we can really tell that story and prove that story-centric marketing works.
I’m looking at it as sourdough starters that I am naturally feeding. This is the best iced tea in the world hands down, I don’t have to sell them on that, all I need to do is to get the product to them and get them interested enough to taste it for the first time.
Tea is a wonderful ingredient in beverages and food, it has a huge amount of history and culture and a story of humanity within. So why is it being minimized? Why is ready-to-drink tea mainly sugar water? Why are we, in tea, only worth 20 cents a pound?
Grapes can be sold for $140 a pound. It’s not less labor-intensive, it’s, even more, labor-intensive, right? So why do we do all this work and don’t get the same value?
“So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.” – Evy Chen
The only difference is that we’re not vocal and that we don’t think we’re worth it. Talk to any tea farmers, any distributor anybody you talk to in tea is the most humble human beings on earth, right?
We’re really nerdy, we’re serious. We truly love this. But who is out there is talking to people drinking tea bags? The perception of value isn’t there. What do we have to do to change their mind? That’s the work we’ve been putting in.
We need to figure out how to tell the same story in a different way, in a shorter format in a more heartfelt, emotionally filled format, and more truthful format, and throw that against the wall against all the other big companies who are nothing but marketing.
We need to bring the whole industry into the next century not just the individual entrepreneurs but the entire global community of tea drinkers.
So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.
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