Up Close With ... New Leaf Brands
For the past several months, New Leaf Brands Inc., Orangeburg, N.Y., has been positioning itself to manage its growth and that of its flagship New Leaf Teas into new territories and accounts.
“We’re expecting dramatic growth this year, and that’s going to come from same store sales and markets we’re in already as well as geographic expansion,” says Eric Skae, New Leaf’s founder, president and chief executive officer.
In October, the company officially changed its name to New Leaf Brands Inc. from Baywood International Inc. The name change reflects the company’s new strategy of being a leading healthy beverage company, initially focusing on its 14 varieties of iced teas. The name change also was a result of the sale of its wholly owned subsidiary, Nutritional Specialties Inc., a nutraceutical company.
Now, purely a beverage company, New Leaf is focused on expanding its beverages nationwide. The New Leaf brand already is established in the Northeast and is emerging in the Southeast, Midwest and South Florida with more than 75 distributors and approximately 8,000 accounts, the company says. Its goal is to build the New Leaf brand nationally and drive sales growth through expanded distribution, marketing support and new product additions.
“We’re in 29 states now, but I expect by the end of 2010 that we will be in close to 40,” Skae says.
In December, New Leaf completed a $1.5 million private debt financing. The company plans to use the financing for working capital and inventory to meet New Leaf’s existing product demand this year and execute its plans for expansion, it says.
“Our biggest challenge in 2009 was our lack of necessary working capital to meet existing demand,” Skae said, in a statement. “While we were flattered that the market acceptance of our great-tasting product was overwhelmingly positive, our No. 1 goal remains to meet all existing orders and expand our footprint nationally. This infusion of capital will help us meet that goal. As we complete our earlier announced restructuring, we look forward to setting our sights on growth of our distribution network and having New Leaf Brands become a household name.”
To manage this growth, late last year New Leaf began to appoint key leaders to its team.
“I’ve got some key sales leaders in roles, and we’ve added quite a few regional managers to support all of the new distributor introductions that we’ve made,” Skae says.
First, the company added Rob Welcome, former director of sales for Tradewinds Beverage Co. as vice president of national accounts, with the goal of making significant distribution inroads. Welcome joins New Leaf’s Trent Moffat, vice president of sales, who is responsible for sales and growth in the East, and Tim Brown, vice president of sales, who manages growth in the Midwest and West.
In January, New Leaf named David Tsiang, a member of its board of directors, as the company’s new chief financial officer. Tsiang’s appointment came as the company began the process of consolidating its Arizona-based corporate operations and support functions to its new corporate headquarters in Orangeburg, N.Y. Consolidation began in the first quarter of 2010, and is expected to be completed during the second quarter of the year, the company says. All accounting, operations, corporate communications and marketing support functions will be moved to the new headquarters to streamline corporate operations, it says.
Effective this month, New Leaf named beverage industry veteran, Bill Sipper, chief operating officer. Skae and Sipper previously worked together at Fresh Juice Co. and Fresh Samantha. New Leaf originally began its relationship with Sipper when it signed a consulting agreement with Sipper’s Cascadia Consulting Group at the end of December.
“Bill brings the necessary experience and talent to help guide New Leaf through the high growth expansion phase that the company now has under way,” Skae said at the time of the appointment. “He is fluent in every aspect of creating brand leaders, including advertising, guerilla marketing, public relations and trade marketing. Bill will be an extremely valuable addition not only to our management team but to our shareholders.”
Skae, with 19 years of beverage sales, marketing and distribution experience, is no novice himself. Skae was appointed New Leaf Brands’ president in January 2009 and was named chief executive officer and chairman of the board of directors in March 2009. Skae has served as a director since September 2008.
Prior to joining the company, Skae founded Skae Beverage International in October 2002. During this time he created the New Leaf brand and also developed Iceland Spring Water. Skae sold his interest in Iceland Spring Water in November 2008.
Turning over a new leaf
New Leaf Brands was created with the vision of providing great tasting healthy beverages made with high-quality ingredients. New Leaf Tea is the first line born out of that vision.
“Americans like sugar in their tea,” Skae says. “They like a sweeter tea, and it’s why brands like Arizona are so successful. So we took the concept of Arizona, Sobe and Snapple and sweetened it with an organic evaporated cane sugar and tried to use higher quality ingredients. We made a more natural, better-for-you tea for the mainstream consumer.”
New Leafs Teas are all natural, with the exception of its two diets that are sweetened with Splenda, and contain no preservatives. While all-natural and healthful ingredients are important to the New Leaf brand, the company’s proposition is still about taste.
“When taste and health converge, taste always wins,” Skae says. “The reality is that it has to taste great, so we’ve trademarked ‘The official beverage of taste.’”
New Leaf offers 14 flavors of teas in four tea varieties â€” white, green, black and oolong, or what New Leaf calls ‘Blue Tea.’ New Leaf’s Plum flavor of green tea is its No. 1 selling product, followed very closely by the Lemon flavor of New Leaf Blue Tea, Skae says. New Leaf also offers flavors such as white tea in Ginseng & Honey, Honeydew Melon, Strawberry and Tangerine; green tea in Ginseng and Mango; blue tea in Diet Lemon, Peach, Diet Peach and Raspberry; and black tea in Mo-Tea-To (Lime & Mint).
Last year, the company added Sweet Tea to its lineup. New Leaf’s version of Sweet Tea is a blend of black tea and evaporated organic cane sugar. Sweet Tea has 24 grams of sugar per serving, in contrast to 19 grams in New Leaf’s other flavors. New Leaf also is evaluating its offerings and plans to add new flavors in the future along with assessing new natural sweetener options for its diet formulas.
The tea category has a broad consumer demographic, and is a category that Skae expects to continue to grow for a long time.
“The health benefits of tea are going to continue to get press,” he says. “We’ve got an awful lot of growth because the United States, for example, in the hot tea category is growing rapidly, but still way underdeveloped. More people are gravitating toward hot tea, and those same drinkers do go to iced tea as well.”
While the green tea variety is probably the variety that consumers relate to the most because it receives the most press, Skae enjoys having the different varieties. “I get to be a little bit more creative with flavors than just having a green tea line,” he says.
In tune with the growth of its teas, New Leaf also is adding new distributors and chain authorizations. The company recently expanded distribution of its teas to additional Whole Foods Markets in the Northeast and Mid-Atlantic regions. New Leaf Teas also appears in convenience stores like 7-Eleven and Sheetz. In January, the company expanded to the Asian market with an agreement with City’super to appear in its upscale grocery stores in Hong Kong, Taiwan and Shanghai, China.
The company’s new distributors include R.A. Jefferys Distributing Co., an Anheuser-Busch distributor with territories in Eastern North Carolina. In addition, New Leaf recently also announced delivery agreements with online beverage store BeverageUniverse.com and independent distributor Mitchell’sNY.
Being a healthy beverage company, New Leaf’s future growth lies not just in new territories and the tea category.
“New Leaf is a brand, and right now it’s a tea brand,” Skae says. “It doesn’t mean in the future that there won’t be line extensions that aren’t tea based.” BI