“From Idea to 8,000 Outlets: The Tiesta Tea Story”
Whether you’re in the idea phase yourself, just rolling out a product and brand, or already a category leader…I find it’s always so valuable to hear how other beverages/brands/companies have gone from idea to a consumer and commercial hit. Today we’re lucky enough to be joined by Dan Klein, CEO & Co-Founder of Tiesta Tea Company – a functional, loose-leaf tea company that has made it from idea to being sold in over 8,000 stores by blazing their own path.
Dan, thanks so much for joining us today!
We were inspired by a study abroad trip where we visited the city of Prague in 2009. We saw tea houses on every corner and all of them served these exotic, flavorful blends of loose leaf tea. We then wondered why teas like this were so hard to find in the US!
I can imagine that in order to bring this to life, you needed some initial funding. Did you do a friends and family round, and how critical has funding been to your success (both initially, and as you continued to grow)? I see you’ve raised over $5mm across multiple rounds to-date.
Yes, funding has been critical for our success. We have bootstrapped as much as possible over the years, but it becomes hard to compete with the big CPG brands without a strong marketing program. We did initially raise from friends and family and it is great to have those early investors see the potential for a nice return down the road!
So clearly funding is an important piece of the puzzle. What about sales and distribution strategy? No doubt your approach here (and how you support that approach) is absolutely crucial to successful customer and consumer adoption. How would you define each “stage” you’ve reached, and what marks your strategy at each?
Our first stage was really going door to door in several cities across North America and dropping off samples and business cards. That got us our initial customer base, and also led us to understand that premium tea was a pretty underserved market specifically in grocery stores. Shortly after that, we signed on the big distributors such as KeHE and UNFI, and started to gain placement in the tea sections across the country. We then reached another turning point when we launched our Cold Brew Bottles in all Target stores. Our strategy now is to gain placement while making sure we continue to sell on shelf and grow our existing business.
Speaking of supporting your sales and distribution strategy – once you’re actually on the shelves, building your brand and driving sell-through via consumers is the only way you’re going to stay there. Tell us about the Tiesta Tea brand, and how you were able to match your marketing efforts/investments to each stage (e.g., you’re probably not buying national media day 1 when you’re in your first market or markets…but you still have to reach and win consumers/fans all along the way).
Great question. When we first started we were very heavy on demoing in-store. That is a great way to drive trial and introduce the customer to your brand. As we have scaled up, we now focus more on merchandising support, discounts on shelf and event marketing in our core markets. We do not advertise in traditional outlets like print, radio or TV. We put a strong focus on partnering directly with the retailer so we can best understand their needs as a business. We do lots of co-marketing with their social media departments, for example!
Finally…With so many dynamic and conditional variables in play – what are some of the core, pervasive values that you believe are most responsible for the success of Tiesta Tea as a brand and business?
We believe in full transparency. We put the ingredients of each tea front and center on the packaging, and we film videos that show the farms where we source the ingredients, how we create the flavors in the labs in Germany and even how we give back to the farming communities that grow these ingredients. We actually have an initiative called the Living Well Project, where we take a portion of every bottle of tea we sell, and save up money to build water wells in Nigeria. We believe that business is about more than just turning a profit. We also believe in the power of a great team. Many of our employees have been with the company for several years and everyone is passionate to bring these products to more consumers. We are truly blessed by all of the help and support we have gotten over the years.
Thanks for having me Seth! I look forward to meeting you in person soon. Thanks to everyone who followed along today!
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