STiR coffee and tea magazine

32 STiR coffee and tea | 2024 Issue 6 (December / January 2025) By Emily McIntyre S Tea Co-Packing in the US Lowers Barrier to Entry elling dry tea comes with a relatively high barrier to entry for many retail operators in the United States. Not only are there concerns around sourcing—where to purchase the tea, choosing initial offer- ings and validating them with customers when minimum order quantities (MOQ) can bring exorbitant risk, blending without specialist knowledge— but there are other challenges with choosing packaging, creating branding, marketing, and then of course, packing. As in many other fields, the most obvious way to mitigate this startup risk is to utilize co-packing, or contract packaging. Co-packing is a contract agree- ment between two companies which can loop in a wide variety of services but essentially means that the retailer is outsourcing aspects of production. In response to the rapidly-evolving US tea market, tea co-packers con- tinue to evolve. How each came to the business is different, but all are united in solving a sticky issue for clients. And one of the first major problems to solve is the gap between expectation and reality for new tea brands. Access ≠ Success "We get a lot of food and beverage brands that believe that they're ready to start selling tea," says Matt Suggs, founder and CBO at PartnerSlate, a co-manufacturer marketplace serving brands including Unilever, Campbell's, and Danone. "They have an idea and they think the very first step is to talk with a co-packer. But that's not really the case. There are a lot of ducks that they should get in a row first, like thinking through the product itself and its process requirements. Do you actually have a commercial formula or recipe for the tea, not just a recipe on a napkin? Have you thought about scaling that recipe, your volume projections and what they are based upon, and the type of packaging you want for the tea?" Tea is one of the most-accessible beverages, and highly nostalgic. Friends, neighbors, or customers may encourage one to start a tea company, and from there actually making it happen can be dense. MOQs are a barrier to entry even within the co-packing world, which is why some co-packers specialize in enabling startups to enter the space. "We call ourselves the 'biggest little co-packer on the East Coast'," says Steve and Jennifer Lorch, who together run Table Rock Tea, a South Caro- lina-based tea farm and co-packing facility. "Basi- cally, we work with people literally from an idea in their kitchen. People come to us with a plastic bag of a homemade tea blend. We help them do R&D, figure out packaging, and make it scalable." Table Rock Tea, which derives about 30% of its business from co-packing, sees itself as the necessary step for new tea brands until they can meet the MOQ for more standard co-packers. Table Rock Tea is one of the only co-packers that lists all prices on its website to facilitate ease of entry for new clients. Consultation and Collaboration Lalith Guy Paranavitana, President and founder of Empire Tea Services LLC and Tea Temptations in Columbus, Indiana, hasn't actively sought clients for many years—his firm runs entirely on a refer- ral basis, and anyone who calls will get him on the phone directly. He initially got into co-packing af- Tea co-packing allows new tea brands and businesses to start selling their teas without having to invest in expensive factory equipment first. Photo courtesy Empire Tea Services For new tea brands, the specialized equipment (which includes teabag packaging and overwrapping machines), and the footprint combine to make co-packing the smartest way to get started. Photo courtesy Teepack

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