• TeaFit: Unsweetened Iced Tea and Herbal Goodness

    Jyoti Bharadwaj launched TeaFit in 2021, offering a range of unsweetened iced tea and herbal blends. She has since added unsweetened premixes to the portfolio. For India, a country with a large population suffering from diabetes, she says, unsweetened beverages were needed, and tea offered the perfect vehicle. More recently, Jyoti was featured on Shark Tank India, where celebrity entrepreneurs agreed to invest INRs 50,00,000 rupees (USD $60,000) in the brand. Jyoti talks about functional, condition-specific, and ready-to-drink tea and how her brand is helping tea shed its fussy image. 

    TeaFit founder Jyoti Bharadwaj
    Joyti Bharadwaj, TeaFit, Shark Tank
    Joyti Bharadwaj and family pitch TeaFit on the Shark Tank TV program

    Aravinda Anantharaman: Will you share the story of how TeaFit came to be?

    Jyoti Bharadwaj: I have had a rather longer route to entrepreneurship. I wasn’t born to be an entrepreneur, nor do I come from a family of business people. We are the typical service-class Indian family that focuses on education and grades, and you become an engineer, get into consulting, and do an MBA, so that’s the route I had for myself as well. So, I am an engineer. And then, I did my MBA from the Indian School of Business. Somewhere in the middle, for a couple of years. I did work in a large IT company. But I think that taught me what I don’t enjoy or am not cut out to do. And thankfully, I learned that fairly early in life. After that, I did my MBA and have been building startups. So, after two successful startups, I was honestly beginning to get a bit bored. Liabilities were taken care of, I had paid off my huge education loan, and I had a nice house in Bombay. And that was pretty much it. I was taken care of in that sense. So that itch to do something meaningful beyond the next job, I think, was gnawing at me a little bit. And also, my kids were really young. I was not enjoying staying away from my young ones for so long every day. 

    I have traveled to Japan quite a few times. And I really enjoyed the unsweetened beverage space of Japan. And just the pride the Japanese folks, have in traditional cuisines that somehow pick up or resonate from their traditional teas, herbs, and botanicals. And so for every Cola or sugary beverage, you will find in vending machines 20 different types of teas that are made from greens, from oolong tea to matcha, you name it. And I was blown away by the kind of selection there and the access people had to good products or products that are good for you.

    When I visited the beverage aisle here back home, there were just three broad categories: Cola, fruit-based/sugar-based beverages, and energy drinks, and somewhere in the middle is where you have to make a choice. The whole game is pinned on the idea the Indian consumer wants things sweet. When you look at the options, they are so limited that you can’t really blame the typical consumer for picking what they do.

    Aravinda: So, what is TeaFit all about?

    Jyoti: I come from a diabetic family. My parents are diabetic, and I am borderline diabetic. India now has ten crore (100 million) diagnosed diabetics. It’s a serious number, and somewhere I felt that the responsibility lies with irresponsible brands in pushing such products. Mainstream marketing and kind of, making it cool to have this ten times a day, and associating it with aspiration, with happiness, and with, you know, all of the other strokes of marketing. So, like, the seed was there in a way to build something responsible, to build something intentional, where it’s not just less bad for you, things that are good for you that can be bottled up. 

    There are many herbal recipes from our own Ayurveda. We selected tea as a base to make the blends flavorful and light on the palate and not douse everything with loud flavor and sugar. So that’s where it came from, a very personal place, but I’m glad it found resonance in the larger customer base. 

    I would also like to say that with all the destruction that COVID caused, I think a small glimmer of hope that it gave everybody was that people got conscious of what they were consuming overnight, and label awareness grew. They wanted to read the back of the label slightly more than they did previously. So if earlier you saw a product that says ‘Good for you,’ or ‘Increases height,’ or ‘Loses weight,’ they would pick it up, but today, they flip the bottle around and see what’s actually there in the nutritional panel. So that’s, in a rather big nutshell, my journey. I’m glad that I’m representing responsible brands in the space, and it’s an absolute privilege to do what I do and to survive the early days of difficult days of the business to be here to be talking to you today.

    Aravinda: How difficult was TeaFit to formulate and produce? And what did you have to do to achieve healthful flavor? In India, I also feel that we have become so used to things being slightly exaggerated in flavors, right? More spice, more sweet, deep fried, and we tend to associate those with better taste. I think that’s sort of what we’ve been given. So, on the production side, what did you have to do to ensure you still retain the integrity of what you wanted the product to have without compromising on flavor?

    Jyoti: I would like to take a minute to highlight that I was clueless. I was as clueless about the business as the next person on the street. So it did take me longer to figure out. I literally Googled on day one of quitting my job, ‘How do you make iced tea at scale’? Everything started with Google. And then, very soon realized there was no way I could do this myself; I needed to find people who knew more than me playing Einstein. So I would say that whatever success I’ve achieved, I think that’s more to do with the kind of talent I have been able to convince to come on board than being able to solve things quickly myself. 

    So I researched the top leaders in Ayurveda, who are the product heads of large companies like Himalaya Herbal, and then I went and knocked on their door and begged them to come on board and work on this idea with me. My broad stroke problem statement was that the product we want is a healthy beverage with no sugar and a base in tea. It features herbs blended in combinations that help you fight the stresses of modern life. You’re always on the go; you’re always ordering in food, something that would, you know, that could help you with digestion, that could help you feel light, energizing, that doesn’t add to the sleepiness. 

    The initial journey was difficult until I found the right people to work with. I feel that when you start out with the right intention, you find good people to work with. So, I would like to highlight a pharma company in the Ayurvedic space they are based in Nashik called Rev Pharma. I was a one-woman army, they could just shut the door in my face, but they didn’t; they respected the idea. And they allowed me and my team to utilize the facility to do the entire product development, do the tinkering on Ayurvedic formulation, and see what kind of extracts we would need. Would we need powdered extracts, liquid extracts, or spray-dried extracts? But we did struggle to come to the right flavor initially in the absence of sugar because first, you take out sugar, then you add, you know, a blend of 15 herbs.

    Some herbs are as bitter as noni fruit. I’m not sure how aware you are, but it’s really bitter. You can’t really take even a spoonful of it. We wanted the benefits. We didn’t want the bitterness. That took a lot of time to get right. It did taste bitter for, I think first three productions. And I knew if it didn’t taste great or how good for you it is, nobody’s going to drink it. We added licorice to it, and we added cinnamon to it, which kind of fools your mouth into making the flavor palate a little more rounded, with a faint hint of sweetness. A lot of iterations are what it took for us to get to the product. 

    We also didn’t want to lose the delicate flavor, the notes of the tea. We use our tea from a single-origin farm in Assam called Zendai Tea Estate and another similar state in Kerala for green tea. Initially, the tea would be too strong, and it would just be very astringent. It would have lost its finer top notes. So then we redid the entire fabrication of the brewing process. The manufacturing plants in India are typically made for either carbonated beverages or they’re made for fruit-based beverages. So for our tea brewing and herb brewing, we had to set up a whole different line wherein you do it outside the filling line at the temperature you want and then introduce the brew into the main filling line. So it did take a while for us to figure it out. Lots of failed experiments where an entire batch was on the floor because the filter got choked. So we’ve also had a journey where because we have done things from the ground up, seen every possible thing that could go wrong, and therefore, you know, we are now doing it right.

    Aravinda: So how long did it take from you know the point when you started the R&D and to, say the first batch that you said, Okay, I think we’ve cracked it?

    Joyti: Fourteen months is what it took, from the sketch of the product. And I also was a little bit ziddii*, in the sense that I didn’t want to take shortcuts, so I didn’t want a bottle that existed. So this bottle, you see, was designed by the Indian School of Design and Innovation, so it did take me some time to figure out who would do the bottles for us. And when you’re new, you don’t know the limitations of the industry. So I didn’t know that if you have a bottle like this, it’s hard for you to do hot fill because the bottle collapses so I also figured out a lot of things along the way like I said, I’ve made every mistake I could have made, and I am still alive.

    Aravinda: That itself calls for congratulations. Why tea? Why was your starting point tea?

    Joyti: I felt the kind of products I wanted to make was hard to do in a fruit-based beverage, and power drinks I didn’t want to touch in the beginning because, like I was anti-everything that carbonated drinks stood for. And also like I’m a tea person. I like tea. So it started as a pet project of mine, I used to do it in the kitchen, you know, hibiscus tea, and all sorts of tea, barley tea when I came back from Japan, and people started liking it. So I was like, this is one thing I know how to do. And let me work on this. I also felt like it allowed for the botanicals to find a good home for being effective and finding a synergized flavor. If you put the same thing in juices, it just tastes very off.

    My Nanaji (maternal grandfather) used to make black lemon black tea, which is legendary in our whole locality. He’s no more; God bless his soul. But I think I was hooked on that. So the first two or three things I wanted: I wanted his lemon black tea. And also, Aravinda, from a business perspective, the drink itself was alien to the Indian consumer. There was no unsweetened drink per se like there was an odd water or a couple of other drinks like that, but there was no drink with a personality of its own and was unsweetened. So there was a bit of unfamiliarity to begin with. And we didn’t want to make it further unfamiliar, like adding two steps of alienation by creating a flavor that’s not mainstream. We wanted to go with the two most mainstream flavors which are lemon and peach in iced tea, and give that to customers saying, “Look, your lemon and peach iced tea could be this.” So that’s what we wanted to go ahead with, just making it less complex as an introduction or making it less complex to decide on the first purchase, the first trial.

    As a business owner, your holy grail is trials and then eventually the beats. So for a bootstrapped brand, if you have to pursue trials, either your packaging has to be phenomenal, the brand has to be really catchy and simple for you to understand, or the product has to be really simple for you to understand. So for all of these reasons, we wanted to keep the complications kind of as minimum as possible. We made lemon black tea, and we did a peach drink tea, and we did barley tea which was something that I personally liked a lot it has immense health benefits, and it will be tragic if people don’t get to try it. These are the three products that we started with.

    Aravinda: Would you say health is still the main marketing angle for tea? Do you think people respond to health and wellness as in the marketing conversations, or is it flavor?

    Jyoti: As a product-first company, I will say if you don’t have a strong product, no amount of positioning of the product will really get the customer pull. So first, the product has to be incredibly strong, which means it has to check all the boxes. If you ask me what is important – is the health angle important, is the flavor important, is the price point important, is the availability important – I would say all of these four, if they are in place, only then there’s a hope that you know the customer will discover you, will decide to part with his money to try your product. So in my case, I was hell-bent on finding the right flavor. We wanted customers to come for the flavor. You flex on the flavor, you know? Health is something we take care of, it’s something that is in the product, but you come for the flavor. 

    Even the premixes that we have launched, milk tea premixes, are unsweetened, but if you drink the product, it is phenomenal. We could have put fillers in it or done all kinds of shortcuts to arrive at a cheaper product that probably would appeal to a wider range of audiences. But we didn’t. We were like, this is what we’ll do, we’ll find our consumers, maybe everybody’s not my customer. It’s important to know how wide a net you want to cast because that will determine what kind of product you will develop.

    Aravinda: And with marketing, have you relied heavily on online and digital, or have you gone for a bit of both?

    Jyoti: We knew that we have to be present in the offline touchpoints, wherever impulse buying happens. And so we our first point of sale was not online or on our website. It was Nature’s Basket stores in Mumbai. We started with a few of them. And in the longer view, if I take a longer view of things, I would say that distribution is probably more important than anything else regarding the beverage business. By that, I mean trade, finding the right channels, setting up distributors, and ensuring your product is available. Because even after Shark Tank, I feel like I lost a lot of customers, or maybe I advertised for my competitors in that sense because our distribution was not there. If somebody in Delhi went to buy a TeaFit after watching us on Shark Tank, we were not available. A lot of marketing without distribution is marketing for the competitor. So we’ve not done a lot of marketing; we are looking to focus on building deeper distribution within Mumbai, within Pune, and then spread radially from there. And online and commerce, we are pretty much everywhere today, on Big Basket, Blinkit, and these platforms. So we want to be wherever the customer is, in the best, most cost-efficient way. And most of our marketing is organic, we do some marketing on the platforms where they’re on. Like, if you’re an Amazon, we’ll do some Marketing on Amazon. And similarly, for the e-commerce platforms, we do some marketing in stores where we are, we do sampling activities.

    A big blitz will get you trials, right? It will get your eyeballs, will definitely make people curious, and make them try. But if you don’t have the right product, they will not return. So I always insist that it is not the first PO or the first order that matters, but it’s also the second PO, right? The second order, or, you know, the second time the distributor calls you and says, I need to talk. And those are the real markers of where the business is going.

    TeaFit Youtube Channel

    Aravinda: Tell me about the Shark Tank experience. Why did you choose to go? What happened? How was it? And how has it been post that?

    Joyti: I don’t think I chose it. I think it chose me because there were so many people who applied for it. And all great businesses. Many far ahead in the journey than me. In fact, I applied last year, also. I was like two weeks, two months into the business, I had done a sum total of Rs 20,000 in revenue and applied. So the guts were always there. And I did get through all the rounds, even in the first season. But I was traveling when they wanted to come, so I had to skip it. This season, I didn’t apply with any hopes. Honestly, I’ve seen all 85 episodes of Shark Tank to know that it’s almost a fluke that you make it or it’s a stroke of luck. So I would say that probably my story resonated with them. There are a couple of rounds of applications wherein they ask what’s your big vision? What’s the big idea? What is it that you’re building? And if you get shortlisted for a second round, which is also written down but fairly detailed in terms of revenue, product market fit, and your footprints, all of that. And then, you have to submit a three-minute video pitch to them. If they like it, they call you. And that day, I didn’t have any baby care at home. So I took my kids with me on the day of the auditions. So whoever is in the audition must attend the final shoot. So I had to take them on the final shoot even though I was unsure how the kids would behave. But I guess it went well. I am generally not a very camera-friendly person. I prepped for it, and then I went. I had done the business in and out from day one alone. So those answers you will always have, and I felt like that came through well in the show. We got a lot of love. Our phone didn’t stop ringing for weeks. We had 300-350 distributor inquiries overnight; sales skyrocketed, and the website shut down… so all of the good things a business faces, we faced all of that, and it has given us like catapult us into a different stratosphere.

    So I was playing at a very small business level, now I would say that, you know, we are fighting bigger problems. I have a bigger team overnight now. I was doing a couple of interns and a friend. Now I’ll have like a legitimate team of people. More than anything, people know about the brand. People know what we do. So the kind of exposure the brand gets makes up for any inhibitions you have as a founder. If you’re a consumer brand, if you’re at a stage where your product is available for people to buy, I think you should absolutely do everything in your power to try and get your 15 minutes on TV.

    Aravinda: Are you still riding on the success of that?

    Jyoti: It doesn’t sustain in the way, it becomes 100x in the first month, right? And then it slows to 50-60x, but that 5-6x would have taken you that long to get there on your own. Honestly, it’s hard to quantify everything that comes your way. Sales are one way to quantify, but just the number of opportunities that come up… brands like Zepto, Blinkit, and other e-commerce platforms. If I were nobody, which I was before Shark Tank, it would be much harder to get into closed-door conversations like that. And platforms like that, just access becomes a lot easier. I’ve been meeting people like Harsh Mariwala, and just being able to pick their brains for even a five-minute conversation, it’s a whole different mindset that it puts you into. You start to think about what’s possible and think of bigger possibilities for yourself, the brand, and what it can do. And, you know, you start to believe in leapfrogging and not just building brick by brick. This was one such milestone for us.

    Aravinda: Do you want TeaFit to be seen as a tea brand? One of the things within the industry I hear is that coffee is cool; tea hasn’t been able to crack that and get younger customers. Something like TeaFit would, I imagine, interest younger people. So how does TeaFit fit into the larger developments shaping Indian tea?

    Joyti: So we feel like there’s a ton of scope to make tea cool, and tea associated with the elderly is, I think, an idea of yesterday purely because it has not been presented in the way with the amount of cool as that coffee does. As a tea-drinking country, I feel like there is an absolutely wide open gap to create a brand that is intentional that is responsible that is cool that is that aligns with the value systems of the young buyer today, and we absolutely consider ourselves to be a tea band before you know any other brands so There’s a lot of innovation that we are currently working on, to innovate on different products and incorporate tea in it. Maybe chocolates. We are working on not just a vertical extension of the product but also taking it horizontally and seeing what else we can do with tea and what other products we can incorporate tea into. I feel like we are at a stage where discerning young people want more than traditional cola/ energy drinks. You do see a lot of experimentation in the cocktail space, in the cocktail/mocktail space, the party space, so to speak. I feel like no innovation has happened in the tea and RTD beverages. So we’re glad to be going after that space and building a brand that resonates with the youth and hopefully makes tea drinking as cool as coffee.

    *Ziddii: Adjective. Headstrong, stubborn, obstinate, intractable, adamant, obdurate, intractable. Rekhta Dictionary

  • Cold-Brewed Calm

    Equitea co-founder Quentin Vennie discusses three new condition-specific canned, cold-brewed tea blends to ease anxiety and depression, improve focus, and calm young people coping with ADHD.

    • Caption: Quentin Vennie, co-founder of Equitea, Baltimore, Maryland
    Quentin Vennie, co-founder of Equitea, Baltimore, MD
    Quentin Vinnie, Co-founder Equitea
    Quentin Vennie, Co-founder Equitea

    Cold-Brewed Calm in a Can

    Author and wellness expert Quentin Vennie, with his wife Erin, on the advice of their son’s neurologist, found that green tea helped their seven-year-old boy maintain calm and focus. Diagnosed with ADHD, a condition leading to impulsive, hyperactive behavior, tea’s unique combination of L-Theanine and Caffeine offered relief, but loose-leaf teas were challenging to brew and not that tasty to a pre-teen. Quentin and Erin added calming botanicals to make the tea palatable. Inspired by their success, they launched a tea venture that produced packaged teas that became a favorite of Gwyneth Paltrow, whose company goop sells the teas online.

    Dan Bolton: I see that Equitea teas and botanicals are purpose blended. Will you tell listeners about your personal experience and how it led to their development?

    Quentin Vennie: We created Equitea essentially out of necessity. My son was diagnosed with ADHD (Attention-Deficit/Hyperactivity Disorder) when he was seven. Given my own history of dealing with mental health issues, generalized anxiety disorder, panic disorder, depression, and addiction to prescription pills, I wanted to manage his diagnosis holistically.

    His neurologist recommended that he drink green tea before any big assignments or tests in school. The idea was that the L-theanine and the caffeine would give him a calm focus like Adderall would but without the risk of dependency or any negative side effects.

    When my wife and I went out to buy different types of green tea, we found out quickly that many of the teas sold in retail stores weren’t of the best quality. They had minimal nutrition value, and they taste horrible, right? And so, we made the decision to make this work by learning as much as we could about green tea. The challenge was figuring out how to make it palatable for a nine-year-old struggling with ADHD. We wanted to ensure that every ingredient we blended with that green tea would assist him in that calm focus and not give him any ingredients that would make him hyper. So, we added things like lavender, lemon verbena, and lemongrass, things known to help with anxiety. Not only did it taste good, but it would serve the benefits we were looking for.

    Later my wife and I made the decision to move forward by starting a tea company and creating our own blends to share, with every ingredient geared toward the desired result.

    Dan: You recently added a line of canned tea using the cold brewing method. Will you talk about your reasoning?

    We first launched as a loose-leaf company. Our consumers said that one of their biggest hurdles was that they didn’t have the necessary equipment and skills to brew it the way the blends were designed to be brewed. With cans, we take the guesswork out of it for many consumers. The process of cold brewing lets us extract a lot of the flavor while reducing the astringency that often accompanies green tea and some black teas that are astringent due to high water temperatures and long brew times.

    We wanted to make sure that our tea delivered maximal flavor and maximal benefit and is a product that is shelf stable. One thing I learned while researching the cold brewing process is that it also helps reduce the amount of caffeine in each serving. Since the tea is marketed as safe for children, we wanted to keep the caffeine content to a minimum.*

    See: Tea Benefits Children Onward from Age 4

    Dan: What is the milligram content for caffeine in a typical 12-ounce can?

    Quentin: The green tea is about 18 milligrams, and the black tea is a little bit higher, closer to about 30 to 35 mg.

    Dan: So that’s about half of what you would find in a regular cup of tea.

    Quentin: Yes, exactly.

    Dan: You use adaptogens. You mentioned them in three new blends. Will you describe which adaptogens are present and how they benefit tea drinkers?

    Quentin: Absolutely. So, each tea has a different adaptogen. Our focus blend has Astragalus Root1, Our Recharge, black tea blend, has Ashwagandha2, and our Recover hibiscus blend, as Schisandra Berry3.

    Adaptogens are geared toward helping the body and the mind to fight off stress and to recover better from stress. And, you know, we’re in a space of COVID uncertainty, and people are potentially moving into a recession. In prioritizing our mental health, it’s important to figure out how we can mitigate and reduce as much stress as possible.

    Dan: In formulating the beverages, you chose all-natural, organic, full leaf teas and botanicals cold-brewed in small batches. Will you discuss sourcing?

    Quentin: Sourcing is of the utmost importance to us, right? We’re communicating directly with small farms and farmers, you know, all across the world.

    For us to create a USDA-certified organic product, every ingredient we use has to essentially fall under the same regulations as we do in America.

    We wanted to make sure that everything was sustainable, sustainably sourced, non-GMO organic, and had the highest quality.

    I often say that in America, tea hasn’t had its coffee moment yet. We don’t have a tea culture in America that has been, you know, stamped. And so a lot of the teas that I’ve had growing up are just very low quality, and just like any other crop that’s grown, right, if it’s not growing organically, there can be chemical compounds that are found in that crop that doesn’t necessarily serve the body. We firmly believe that everything we put into our bodies matters.

    The challenge was figuring out how to make it palatable for a nine-year-old struggling with ADHD. We wanted to make sure that every ingredient that we blended with that green tea would assist him in that calm focus and not give him any ingredients that would make him hyper.

    – Quentin Vennie

    Dan: The 12-pack has a $47 suggested price, about $4 per can. Tell us about your strategy for bringing the brand to people.

    Quentin: We just launched 100% online, through our website, direct-to-consumer. We are in talks with a few larger retailers and convenience stores. We plan to continue to grow and scale so that we can reduce the prices a little bit. We’re still a very small company, and it’s been a bit challenging with inflation. My goal is to grow this to be a national company. We really want to make wellness equitable and accessible.

    Dan: Finally, tell us the story about how you came to the attention of goop Founder & CEO Gwyneth Paltrow.

    Quentin: On social, we really connected with the work I was doing in the wellness space. She was a part of the initial ideation of the tea Company. She was one of the first people to try our blends, and she immediately fell in love with them. And, you know, our relationship just grew. She’s one of the most incredible human beings I’ve ever met.

    And she’s been incredibly supportive throughout this entire process.

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  • Resilient & Resourceful: Evy Chen

    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
    Evy Chen on bouncing back after a dramatic drop in sales of her namesake cold-brewed tea.

    Evy founder Evy Chen

    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.

    Evy Chen

    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.

    “No one had thought to cold brew tea before, but it brought out all of the great attributes that were lacking in cheap iced tea.”

    – Evy Chen

    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.

    Cold brewed
    Sourced organic, small lot, direct trade
    0 Cal (Unsweetened Green Tea)
    40 Cal (Black Tea Superberry)
    40 Cal (Hibiscus)
    70 Cal (Evy Palmer)
    $27.99 Eight pack 12 oz. cans

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  • Patent Persuasion – Need to Know

    What tea professionals need to start the week —

    Single-serve lawsuits draw a line in the sand… growers of Honeybush in South Africa voice concern over rising demand… AriZona retains its position as the market leader in ready-to-drink tea in convenience stores… Numi introduces single serve tea in RealCups.

    Patent Persuasion

    Numi Organic Tea announced its new single-cup line last week, about the same time Harney & Sons Fine Teas launched their selection of single-cup teas.

    Neither company chose to partner with Keurig Green Mountain which licenses its K-Cup technology to major tea blenders including Lipton, Snapple, Bigelow, Teavana, Twinings, Tetley, Celestial Seasonings and Tazo.

    LOGO_KeurigGreenMountain_replacesGMCRTheir decision is based on economics in part. The largest brands produce K-Cups in huge quantities paying less per cup and can therefore better afford to pay Keurig Green Mountain a royalty of 6.2 cents per cup.

    There is also a principal involved, a line in the sand with KGM on one side facing a growing number of private label manufacturers including California-based Rogers Family Coffee and Toronto-based Mother Parkers Tea & Coffee. Each of these firms packages their own lines in Keurig-compatible non-licensed capsules and packs tea for companies like Republic of Tea (Rogers).

    Since its patents expired in September 2012, Green Mountain has watched its market share erode. Last year unlicensed packs grew from 7% to 14% share of the $3.1 billion single-serve market, according to data from Mintel International. Green Mountain, which once controlled 80% of the market by value, now controls 20% (with another 13% held by Keurig  manufactured Caribou, Newman’s Own and Eight O’Clock coffee).

    Starbucks has sold 2 billion K-Cups in a successful partnership with Keurig dating to 2011 and currently has a 12% share. Folgers (JM Smucker) has 12% share, according to IRI data (which counts grocery, drug store and mass market sales). Last week Starbucks renegotiated its deal with Keurig, striking terms that had prevented Keurig from partnering with other super-premium brands but gaining access to the lower end of the market for brands like Seattle’s Best. Almost immediately Peets Coffee & Tea announced it would partner with Keurig Green Mountain. Peets had previously offered its coffee only in RealCup™ Even though it now faces competition in the premium segment, Starbucks is quite confident it will be rewarded for expanding its offerings. Single-cups are the fastest growing coffee segment and many more homes are going to dump their Mr. Coffee for a pod machine.

    Keurig believes that by developing superior equipment and partnering with companies like Starbucks to insure a large assortment of licensed brands it will win back market share.

    REALCUP(TM) LOGOIn choosing to contract with Mother Parkers Tea & Coffee, Numi joins a growing number of grocery chains including Kroger and Safeway, large manufacturers such as Kraft and Mondelez International, and independent coffee roasters who believe that open competition leads to product innovation, improved quality and greater consumer value.

    On Feb. 12,  TreeHouse Foods, a multibillion-dollar private label manufacturer, filed suit against Keurig, Inc., and Green Mountain Coffee Roasters (collectively known as Keurig Green Mountain) alleging they engaged in anti-competitive acts to unlawfully maintain their monopoly over the cups used in single-serve brewers. A month later The Rogers Family Co. also filed suit alleging Keurig used its monopoly power in the single-serve coffee brewer and coffee pod markets to require its distribution partners to enter into “exclusive anti-competitive agreements designed to maintain Keurig’s monopoly power by excluding competition.”

    In a release announcing the suit, TreeHouse writes that “Green Mountain has announced plans to eliminate the current lineup of K-cup brewers, which function with competitive cups, to exclude competition and force consumers to purchase higher-priced Green Mountain cups. TreeHouse’s lawsuit maintains that any supposed consumer benefits from the new technology are more than outweighed by the harm to competition and consumers by eliminating their choice and forcing them to pay higher prices for Green Mountain cups.”

    “Such an anti-competitive product redesign would force consumers to pay at least 15 percent to 25 percent more for K-Cups, would block consumers from their preferred beverages and would restrain competition,” Oak Brook, Illinois-based TreeHouse said in its complaint.

    Keurig Green Mountain Spokeswoman Suzanne DuLong responded that “We believe these claims are totally without merit, and we intend to defend these lawsuits vigorously.”

    Coffee industry leader Mother Parkers agrees with TreeHouse Foods actions to stop a Keurig® monopoly, according to the company.

    “The patents have expired; consumers have declared that they want choice,” said Bill VandenBygaart, Vice President of Business Development at Mother Parkers. “In our opinion, this action by Keurig as well as the pattern of anti-competitive activities described in the Complaint will continue to hurt the category.”

    Tea and coffee drinkers “should decide which coffee they will brew, not Keurig® or Green Mountain Coffee Roasters®,” said VandenBygaart. “We support efforts to keep the single-serve business open to competition and believe that competition will deliver a better cup of coffee or tea.”

    Numi Co-founder Ahmed Rahim was eager to enter the single-serve business, but it was paramount that the taste he so carefully crafted was present in each cup brewed from a single-serve capsule, according to a press release announcing the decision.

    “I was impressed by the taste delivered by a RealCup™ capsule,” said Rahim. “It was clear to me that the superior taste from the carefully chosen real ingredients used in Numi® Organic Tea’s blends would be found in the teacup and not left behind in the capsule.” In choosing he placed Numi on the “one for all, all for one” side of the line.

    No one wants to lose their monopoly. Keurig Green Mountain aggressively responded to the suit but the company’s decision to erect an even more formidable patent barricade is ultimately going to dampen innovation. In February KGM CEO Brian Kelley unveiled a new Keurig 2.0 brewer that will not work with non-licensed K-Cups. The patent for “intelligent extraction” which depends on a bar-code and radio-frequency ID means that owners will once again be forced to purchase Keurig coffee. It will also thwart the use of refill capsules.

    The reality is that Keurig will find it hard to convince coffee drinkers they must pay for the new brewers through a premium of as much as three times the actual cost of coffee contained in the capsule.  Kelley has promised the technology will produce a better cup of coffee, leading existing Keurig owners to upgrade. Keurig has sold 16 million brewers to date. Installing RFID technology in existing models is not practical. Adding this feature to new less expensive models drives up their cost.

    Keurig may abandon its first-generation brewers but private label capsules are here to stay, as evidenced by the rapid growth of the Hamilton Beach FlexBrew. This non-licensed $49.95 Keurig-compatible brewer in five months is already found in 11,000 outlets. It is outselling Keurig’s comparable K-10 because it not only accepts K-Cups, it accepts refillable cups, has a wire mesh basket for your own freshly ground coffee and will brew European-style filter pad coffee as well as tea pods.

    Keurig 2.0 will certainly offer more features; and with its partners likely make a better cup of coffee. It may well triumph in its niche — but not by unfairly stifling competitive innovation.

    CASE: TreeHouse Foods Inc. v. Green Mountain Coffee Roasters Inc., 14-cv-00905, U.S. District Court, Southern District of New York (Manhattan).

    Source: TreeHouse Foods

    Fast Growth RTD Tea

    While carbonated drinks remain the most widely consumed beverage in America the U.S. Beverage industry reported another year-to-year drop in volume, this time down 1.42% in convenience outlets compared to 2012. In contrast RTD tea is the fastest growing segment of the beverage category.

    SLIDES-RTD_AriZonaTea_greenteaginsengAriZona Tea was the top-selling brand in convenience last year with almost $270 million in sales. Lipton Brisk ($153 million) and Lipton PureLeaf ($125 million) trailed according to data from IRI.

    The biggest growth was Coca-Cola’s FUZE juice fortified with vitamins. Sales increased 250% to $33 million. The bottled tea category generated $1.23 billion sales in convenience outlets in 2013.

    Bottled water showed big gains as soda consumption continues to decline but ready-to-drink tea may be the ultimate victor now that the world’s major bottlers are give it a boost.

    Coca-Cola reported last month that its tea volume grew by 11% last quarter. Sales of Honest Tea are up 25% compared to 2012 and it is now a $100 million brand. FUZE tea and juice blends and Gold Peak shows solid growth as well.

    Market research firm Canadean released its Global Iced/RTD Tea Drinks Report last week noting North America had net volume growth of 74 million gallons (280 million liters). The $5.1 billion U.S. market for RTD tea is expected to increase to $5.3 billion in 2014 with projected growth rate of 6% through 2018.

     “The refreshing taste and perceived natural, healthy image of iced/RTD tea drinks will continue to generate growth and place the category in a good position to take advantage of the slowing carbonates market,” according to Canadean.

    RTD tea is not just gaining customers in the United States.

    Of the impressive 18.7 billion liters forecast to join the market between 2013 and 2018, over 15 billion liters is projected to come from Asia, with a massive contribution from China (as it overcomes its temporary setback) and Indonesia, according to Canadean. “Soft drink categories have continued with healthy double-digit growth, primarily owing to the key categories such as iced/RTD tea drinks and packaged water. The company reports that in Europe most carbonated consumption continued to occur in West Europe (primarily Benelux) in 2012. The region consumes 55% of global volumes but has lost considerable ground to Asia.

    Excessive Demand Depletes Honeybush

    Demand is depleting stocks of Honeybush, a largely wild-harvested South African bush used to make a popular herbal drink.

    SLIDES-INNO_RTD_HoneybushTeaIt has become a popular because of its sweet flavor and it is often praised for its potential health benefits. There are 23 species of Honeybush; several are used to make an herbal beverage. In 1997 the harvest was 27 metric tons but when companies like Tazo, Twinings and Stash offering Honeybush blends in their lineup demand rose to 200 metric tons.

    The challenge is supply.

    Honeybush (Cyclopia sp.) is a legume that grows only in the mountains north of South Africa’s Cape of Good Hope. Honeybush is part of the fynbos biome a habitat that is under pressure similar to that experienced by Rooibos which experienced a three-fold increase in demand. The result was widespread cultivation on land farmed at the expense of other native plant species.

    Richard Cowling, of the Department of Botany at the Nelson Mandela Metropolitan University, cautioned that steps should be taken to prevent mistakes by the Rooibos tea industry.

    “What is required is the mainstreaming of biodiversity and sustainability into the policies and practices of the Honeybush industry at this early stage of its development,” Cowling told the Flower Valley Conservation Trust. This could be done through certification championed by the local industry. Certification could ensure that sustainable veld harvesting guidelines are followed, that cultivation only takes place on old lands and that fair labor practices are met, he said.

    There is very limited commercial cultivation of Honeybush so supply has relied heavily on wild bushes. The small plantations that currently exist are only able to supply 25% of the need. Honeybush traders travel into the mountains and harvest what is to be sold. Concerns have been raised that improper harvesting has damaged the existing supply. Wildfires, droughts, and over-harvesting have now raised serious questions about the plants’ long-term survival. Beginning in the mid-2000s, supply began to drop significantly, just at a time when global demand was increasing. The supply problems pose significant challenges to blending for consistent flavor and appearance and prices have now doubled.

    Currently 15% of the Honeybush produced stays in South Africa. The rest is exported, with 85% of those exports going to the United States and Germany. Honeybush producers worry that the plant simply will not survive and work is now being done to establish nurseries and plantations to grow more Honeybush for commercial use.

    These supply concerns are coinciding with efforts by the European Union and South Africa to assist one another with protecting geographic trademarks for products including Honeybush.

    Neill Coetzee at Cape Town South Africa’s Coetzee & Coetzee (Pty) Ltd. is one such exporter. He identified five species that are commercially utilized. Two are slow growing and mainly wild harvested, he writes.

    One species, Cyclopia longifolia, is “a new kid on the block and showing big commercialization prospects,” according to Coetzee. “This tea is very similar to Cyclopia intermedia (the original honeybush) but grows well in cultivation,” writes Coetzee whose firm trades in natural and organic ingredients, medicinal plants, herbal teas, Rooibos and Honeybush.

    Small quantities of Honeybush are grown on lands from Mosselbay to Oudsthoorn (the eastern sides of the Western Cape province) and on the western side of the Eastern Cape province (Joubertina to Kareedouw). There are two Rooibos plantations situated near Honeybush producers but most Rooibos is grown 200 miles away in the Cederberg Mountains near Clanwilliam, considered the heart of Rooibos cultivation.

    Learn more: South African Broadcasting Corporation

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