Chris Savage likes a little honey in his tea. Don’t we all?
But instead of honey pots, honey dippers and sticky fingers Savage decided the popular Keurig style capsules were the and honey with no mess.
True Honey Teas founder Chris Savage
The 2011 graduate of George Mason University received his first Keurig brewer from his mother as a gift. “I really like the form factor,” said Savage, an avid tea drinker who “didn’t see a lot of innovation in single-serve tea. There was very little specialty tea and few high-end teas.”
A tinkerer from childhood and well-schooled in the discipline of successful entrepreneurs, the 27-year-old first tried the idea on himself. He purchased capsules with removable tops and experimented with a couple of traditional flavors until “I found this nice combination of honey with the tea.” He bought honey locally and came up with several blends during early 2013. His first flavors were a green tea, a chai an English breakfast and Earl Grey. He bought only organic ingredients.
He came up with the name and paid $250 for design services, organizing as an LLC in June 2013. Next he went to kiosks and small farmers markets where he sold the tea for $10 a box. He was surprised to find that not five out of 10 or even eight out of 10 but a remarkable nine out of 10 people who stopped by his stand bought at least a $2 sample pack and more frequently a full box.
“At a good show I sold 5 to 100 of the two-pack and sometimes a couple hundred of the 12-unit boxes. I could make the tea for between 30 and 50 cents per capsule and sell it for 83 cents per capsule on average,” he said. Now that he was making $1,500 to $3,000 per weekend he made a new goal to sell 10,000 boxes, many more than he could make by hand.
That’s when he confronted the challenge of funding his success. He turned to Kickstarter, did a home video, promising honey tea in capsules to donors who contributed $17. It worked. In 30 days he got 180 pledges and raised $7,000. During the winter of 2013 he made and mailed 15,000 capsules to donors.
Savage continued working full time as an engineer in satellite design at Northrop Grumman in Virginia during his first year so that he had sufficient resources to invest in what was becoming a full time job. He made the time to build on his success working weekends and nights.
“I knew I needed to build something that was scalable. I wanted something cost effective that could make 100 pods and scale up. He discovered that no one has an affordable automated tea filling machine on the market, much less one designed to dollop honey in with the tea – so “I designed a basic machine using Solidworks software.” He built it that summer, bought pre-formed capsules from PrintPack and ran it with his parent’s help in his townhouse kitchen to meet demand.
Demand grew in the months that followed. Moving next to local grocery outlets he sampled his tea on weekends and was soon delivering not boxes but cases of tea.
In time he found placement in several Whole Foods Markets.
Later, as sales picked up, he moved capsule assembly and packaging to an abandoned bakery in Kensington, Md. Last March he quit his $100,000 a year engineering job to concentrate on developing an additional 10 flavors and an online strategy that requires “much less overhead and resulted in lots more sales.”
Next stop: Amazon.com
Tea is an ideal product to sell online. Amazon has become a remarkable marketplace for tea and coffee crafted by small-scale blenders and micro-roasters. A search for “honey” and “tea” points to Adagio’s honey for tea and to Savage’s offering of tea with honey in eight flavors. He has the single serve subcategory all to himself at a time when sales of portion-pack coffee and tea are booming. Coffee and tea in portion packs currently hold five of the top 12 top selling items in grocery.
Americans will consume 12 billion beverage portion packs filled with everything from tea and coffee to cocoa and soup this year. Starbucks alone shipped 100 million capsules in December.
Savage was soon getting four- and five-star ratings, rave reviews and selling 30 to 40 boxes a day online. He grossed $60,000 his first year on the initial $50,000 investment, which included the Kickstarter money. He now offers 14 varieties and hopes to double that number. He has hired part-time help and can produce 1,200 pods per hour. Unit sales have climbed to 5,000. This year he estimates sales of $300,000.
Learn more about tea in capsules at , at Dan’s presentation, Single Serve: Tea in an Instant, from 8 a.m. – 9:30 a.m., Thursday, May 7.