STiR coffee and tea magazine

STiR coffee and tea 33 ter leaving his home country of Sri Lanka in 1989 due to political turmoil. In Sri Lanka he had been a director of one of the largest tea corporations, with twenty years of experience managing large tea estates and factories. "Tea co-packing and private labeling was something I could do with my sourc- es," he says. "I bought a machine for pyramid bags and have focused primarily on pyramid-style tea bags, putting them in tins or stand-up pouches, and labeling them for other businesses." He points out that tea is constantly evolving. "Things like chai are now mainstream, but 10-15 years ago it was a niche market, similar to yerba mate or rooibos. Now in the United States there is very little demand for traditional teas. Ameri- cans are more into variety." It takes specialization to be able to track what is popular, manage the business itself, and direct clients in the right path. "In a way, it's a collaboration," he says. "It is in my interests to see my clients be successful and to that end I have to give them good advice." He will often work with newer clients to determine what types of teas might sell best based on their area. For example, "When I came to the USA I thought I could sell Ceylon [Sri Lankan] tea, but there was no market for it as a standalone. I could call it English Breakfast, and it would sell better than strictly Ceylon." Equipment (and Inventory) Required Tea co-packing addresses the barrier to entry, which is factory equipment. "It's expensive to buy these machines," says Andi Biron, co-founder of Biron Teas in the Macon, Georgia area, "and they are not easy to run. Ours is extremely sensitive! We are talking about getting Q-Tips and cleaning tiny sensors that have tea dust on them. There's also a language barrier between us and our tech support in Japan." For new tea brands, the spe- cialized equipment (which includes teabag packaging and overwrapping ma- chines, along with ribbon mixers and others such as milling/grinding, mois- ture analysis, and more) and the footprint combine to make co-packing the smartest way to get started. There are limited options when it comes to equipment, and some co- packers get into the business simply because they want to optimize the ROI on their expensive factory. Biron says, "We started working with a co-packer and it reached the point where we needed our own equipment. We were clos- ing a big deal with Kroger [a prominent grocery chain in the United States] and thought we really needed to do it ourselves in order to make money on it. Ironically, that business piece fell through a year or so later, but by then we had made the investment. We visited the World Tea Expo in Las Vegas and made our choice, and now this is what we do." Paranavitana points out that since there is room in the competitive land- scape for tea co-packers and private labelers, it's important for new brands to do their homework when choosing a partner. "It's easy enough to make a website," he says. "When interviewing co-packers, you should ask if they can provide inventory, and what their infrastructure is." Certifications are important, depending on the GTM strategy, and each co-packer has a differ- ent approach to, for example, FDA Organic Certification. Biron adds, "Our clients have to be the right fit. At first we did everything for startups, but now we have recurring clients. Larger co-packers will send us pallets of product and we will package for them when they are over capacity." The Future of Tea Co-packing businesses and other types of contract partnerships, including ready-to-drink (RTD) bottling and distribution, continue to evolve as the marketplace evolves. Suggs and his partners feel it's important to offer edu- cation to potential new players in the field, which is why PartnerSlate has created a robust free platform called PartnerSlate Academy to introduce new entrepreneurs in the space to all necessary aspects of building a tea brand, in- cluding market research and product development and extending to building a "go to market" (GTM) strategy and navigating the choice of a co-packer. Meanwhile, at least for Table Rock Tea, the future looks like more grow- ing of tea in the United States (Steve Lorch wrote the first book on the topic, called "How to Grow and Make Tea in the United States), a focus echoed by Biron who plans to eventually start tea farming. This shift is interesting, and while unlikely to become a volume play at any point, demonstrates the endur- ing and exciting nature of the tea business in the United States. Table Rock Tea, founded by Jennifer (pictured above) and Steve Lorch derives 30% of its business from co-packing. Photo courtesy Table Rock Tea Biron Tea invested in tea packaging equipment to meet their own needs and then eventually added co-packing as another revenue stream. Photo courtesy Biron Tea

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