How We Launched a Tea Business
I've had so much to write about the process of starting a new business, but I've neglected to do so until now. I don't like to say that I haven't had time, because everyone has the same amount of time in the day, it is how the time is prioritized that decides if something gets done or not. So, I haven't prioritized it over all of the more pressing pieces of getting a site launched and more so, a business.
I have been comparing the process of starting Embrew to becoming pregnant and growing a baby for 10 months. This baby is getting big and uncomfortable, there are painful things I've never experienced before and I'm the happiest, craziest, most-frustrated and emotional I've ever been in my life! I'm trying to do all the right things for me and the baby (Embrew, cute girls name maybe?) and I don't know what I'm doing at all. I'm about to launch a kickoff on February 4th at Localtopia, St Pete, so maybe that's like a scheduled C-section since I know when it's coming? The risks are big and I may not be cut out to be a business owner at all. But isn't everyone just figuring things out as they go along? No one really knows if they are screwing things up royally for their kids until way later. There will be ups and downs and the best moments of our lives and the worst. I'm so curious what this baby will grow up to look like, but for now I'm content to take things day by day.
Okay, analogy over (but not really, I could go on and on).
Since this article is about to get lengthy, I'll break it down into sections in case you want to jump around to various parts of the process. This article will have summaries and over the course of the next few months, I'll be creating additional more lengthy posts diving deeper into each section.
1. The Idea and Making a Move On It.
About 10 years ago I went searching for a sweetened tea bag. Something that would allow me to be lazy and only need to drop a bag into a cup of hot water so I didn't have to find a container of sugar or a spoon. Then a year ago I went looking for it again and still couldn't find ANY products, so I decided I would have to make it. Even if it was just experimenting in my kitchen to create something I wanted, it was important to me to see what I could come up with. After reading "Big Magic" by Elizabeth Gilbert, it just knew the universe was telling me I had to act on this before the creative idea passed me by and latched onto someone else instead.
So, I picked a name (with a 6 letter available URL!) and started researching vendors suppliers and ordered product samples to try. The first steps were so inspiring and the more I progressed, the more I want to learn and get to the finish line (that I learned later didn't exist). So many people encouraged me, lent their expertise and inspired me to actually get things off the ground and follow through. Some days I dedicate a lot of hours to the business and other days I just don't have anything left at the end of the day, but I'm figuring out how to balance everything and go at a steady pace. Every day is a reminder that I'm only able to take baby steps and that I have to be okay with that.
2. Market Research
Over the years I've been looking for a comparable product and was only able to find one company doing anything remotely similar and it was for large pitchers of sweet tea. They don't seem to be in competition since they aren't selling single-serve bags, so my true gauge of market size is based on people who like loose tea, because it's higher quality, but also appreciate the convenience of a brew bag. I initially was exploring a coffee brew bag product and they do exist with the two mainstream coffee giants out there that are in the grocery stores, but they just don't make a great cup and definitely aren't adding sweetener to the brew bag. I went so far as sourcing the coffee from a direct trade company, refining the grind and amount per bag, getting packaging printed all to end up putting that part of the business on hold and pursuing the tea only. I felt stretched too thin and with multiple hurdles related to coffee manufacturing, I decided to focus solely on where my passion first began - with sweetened tea bags.
According to the Tea Association of America, "Approximately four in five consumers drink tea, with Millennials being the most likely (87% of millennials drink tea)... Hot Tea has been growing steadily over the past 5 years, as consumers embrace its health benefits. Total category sales for hot tea have increased more than 15% over the last 5 years."
During this proof of concept phase of the business, I'm getting out there and allowing people to taste the teas at events and markets so I can do user testing on the spot. This way I have a very inexpensive way of getting candid feedback about my product while testing my verbal sales pitch, pricing and display. This is an invaluable way to get the initial launch of the business validated by customers.
3. R&D along with Product Tasting (my favorite part!)
If I quit the business right now, I wouldn't regret having had the chance to taste extremely high quality teas and experiment with flavors, which has been an amazing part of the process. I was so under-educated in the world of tea before taking on this project and now I can't wait until the day comes where I can be a tea sommelier (yes, it's an actual thing and sometime in the future I'm going to BE one!).
Once I synced up with my tea provider, they were unbelievably helpful at providing information about the farms where the product comes from, the farmers them self, how to navigate the tea industry, get exposure through media and get connected to the people who are the best resources in the industry. They've been an enormous help to me in a way I can't even describe. I'm so grateful to have such a meaningful relationship with my supplier.
4. The economy of business. Pricing and identifying costs.
If there's one thing I've learned since becoming an eCommerce professional is that you won't make any sales if you don't have great product at the right price. I've also been taught (relentlessly, in fact) that you can't survive as a business unless your margins and costs are under control. I did a lot of research in the grocery market, with tea and coffee specifically, to see what type of margins the manufacturers are operating on. There is a wide range and it definitely depends on the quality of tea leaves used along with additional ingredients.
Tea varies a lot in price depending on where you are buying from and distributers definitely offer a great deal on tea because they buy in such volume. However, finding out where the product really comes from and where it has passed through in the supply chain is impossible to know. The supply chain is important and so is the implication of cost along the way. The more hands that the product passes through, the less money the farmer receives for their hard labor and true craft of what they make. It was important to me to know what the farming practices are like and being able to meet the people who grow and process my teas one day if I want to.
What I can say about costs is that they are everywhere. Hidden where you didn't even know to look. And I'm not just talking about Cost of Goods, I mean all the costs of doing business from supplies, marketing, web site, rent, market fees, the list is truly endless and I would say the first year is really research and discovery into a baseline for costs. You can guess and get close on some things, but during the first year you're learning what you didn't know you didn't know.
5. Finding Packaging Suppliers
We weren't sure what we wanted our packaging to look like. We saw some cool tins, awesome boxes, and a variety of really classy packaging options that screamed out to my inner designer. After all the research, I had to reign myself back in and concentrate on what was the best option for my product, which included sweetener (so moisture barrier was critical) and wasn't going to drive my prices even higher than they are based on the quality of tea. I knew I didn't want the excess waste of a string and tag or the inner packaging that most tea bags have with individual wrappers for each bag.
After searching for some time, I found a biodegradable option that didn't require inner packaging for all of the separate tea bags. I found a recycled kraft stand-up, resealable zip pouch with a cornstarch poly liner as the moisture barrier. It allowed for front and back printing and reseals easily to keep the remaining tea fresh. We've tested the freshness of the packaging and resistance to high heat and it has been great. We're currently working on the biodegradability test, but we'll have to get back to you on that.
6. Blending and Packaging by Hand (no, make it stop!)
It's hard to predict what a business's largest hurdle will be and it took a bit of time for me to uncover the seeming impossibility of manufacturing the sweetened tea bags automatically with a machine. This hurdle is still haunting us as we've talked to many co-packers who don't have the right equipment to dispense different ingredients into the same tea bag without blending them together. This isn't a possibility with a sweetener and a tea to be blended together before dispensing because all the sweetener falls to the bottom, so the dispensing wouldn't be accurate for either ingredient.
We continue to hand-blend and package in a commercial kitchen in St Petersburg, which is a slow process, but I try to use it as therapy. I have an amazing friend that helps with the process and is there every week to help bag tea. The technology is out there to measure and dispense two different ingredients into a tea bag, but I haven't found the company willing to co-pack in low quantities like I need right now. This one is a tough nut to crack, but I'm going to figure out a solution!
7. The People Along the Way
The best part about starting a side hustle and launching a new business is the camaraderie among small business owners. It's kind of like the mom club where business owners feel the pain you go through with the hurdles and have lived the victories of success. So many are willing to help along the way, give advice (great advice most of the time) and even help you set up a market tent. The encouragement from like-minded people who know what you're going through is priceless and continues to be my favorite part of starting Embrew.
8. How to Launch on a Minimal Budget
9. Kickstarter. The brilliance and the Failure.
10. Our first sign of life and interest. (Media responses and a Radio Interview!)