Colorado entrepreneur brews chai business
CHICAGO (Reuters) - During a tough financial period, entrepreneur Brook Eddy recalls having her mailman on speed dial, because she was desperate to get her hands on any outstanding checks from clients. This year her business is set to reach nearly $2 million in sales and is pushing toward national distribution for its spicy tea drinks.
"I had his cell number, I would call him," said Eddy, the 37-year-old founder and CEO of Boulder, Colorado-based beverage company Bhakti Chai. "I'd drive and find him and he would give me a stack of checks. I would be ripping them open on the way to the bank."
Things have changed a lot since those touch-and-go moments in 2008. Bhakti Chai has moved to a dedicated production facility outside Boulder and employs a staff of 11. Devotees of its fresh, organic tea drinks include Whole Foods' customers throughout the Rocky Mountain region, as well as those of local coffeehouses and retailers.
It's surprising growth for a venture that began by chance with virtually no startup capital. During an extensive family tour of India in 2002, Eddy fell in love with chai, a sweetened tea drink infused with ginger, cardamom and other spices that is combined with milk. She came home, got on with her life - including marriage and the birth of twins - and began experimenting with a homebrew version, handing it out as gifts in mason jars.
"I would create a concentrate, mix it half and half with milk or plain soy milk," she said. "It really wasn't a business idea at all. It was just something I did. I liked it."
By 2006, encouraged by the chai's popularity within her personal circle, she began selling it to local cafes, where it became a hit. Production moved out of the house to a rented space in a shared commercial kitchen.
"It was just grass roots word of mouth," said Eddy, who uses only fresh, fair-trade ingredients, including some 800 pounds of organic ginger every week. "Sometimes I'd brew all night, deliver at six in the morning and go to work, to my day job."
Two years later, with more than 40 regular customers, Eddy had had enough of the exhausting schedule. She was juggling multiple roles as part-time brewer, development officer for the Boulder Valley Women's Health Center and mother. Despite an impending divorce and the offer of a raise at her job, she quit and threw herself into the tea business full time.
"I was at a crossroads," she said. "I took that leap of faith."
Bhakti Chai was experiencing growing pains in the form of cash flow shortages as increasingly larger accounts put in ever-larger orders, sometimes taking more than a month to pay. After failing to secure bank loans, Eddy drew on her development skills to drum up support from local investors, eventually raising a total of about $250,000. She also tapped Boulder's enthusiastic network of food entrepreneurs, who were eager to help fill her void in business experience by giving freely of their time.
The homework paid off. Whole Foods moved her chai beyond the cafes in its Boulder stores to the refrigerated section of its markets. Bhakti Chai was also picked up by United Natural Foods, a large distributor that moved the tea beyond Colorado's borders to states such as Texas, Wyoming and Arizona. The concentrate, available in several sizes and flavors, is also sold online (www.bhaktichai.com). A one-quart container sells for $10.99 at Whole Foods.
"The space we gave to it is well deserved. It just took off," said Tom Rich, grocery coordinator for Whole Foods' Rocky Mountain region. "When you get a high quality product, you've got to give it some attention."
Call it karma, but Bhakti Chai, which takes its first name from the Hindu word for devotion through social action, also manages to make substantial contributions to charity. Last year it gave away 20 percent of net income to groups such as the Global Fund for Women.
"It's just built into the fabric of what we're doing," Eddy said.
Meanwhile, she has been focusing on the next phase of growth. She recently inked a deal to produce ice cream flavored with Bhakti Chai and chocolate chips with a local manufacturer, and is preparing to roll out a ready-to-drink version of the mainstay product. Eventually, Eddy would like to team up with a strategic partner with deep pockets to help fuel expansion.
"I think people will appreciate the product outside of this region," she said. "We're the only fresh chai on the market."
Whether or not Bhakti Chai will become a household name remains to be seen.
"U.S. consumers today are definitely interested in experimenting with their beverages, trying new kinds," said John Sicher, editor and publisher of the trade magazine Beverage Digest. "But it's probably too early to tell if this particular category will be successful over time."
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