If the South had a
signature product, it would probably be sweet tea. Sweet Leaf Tea takes
that homemade sweet tea taste, usually found only in local restaurants or
grandma’s kitchen, and bottles it, much to the delight of consumers
craving the flavor of the South.
Frustrated by not being able to find a bottled tea as
good as homemade and inspired by a tea-tasting road trip through Alabama
and Mississippi, Clayton Christopher launched Sweet Leaf Tea in 1998.
Enlisting the help of friends, Christopher built a special tea hut in
Beaumont, Texas, where he brewed the original batches in large crawfish
pots using pillowcases as teabags, filled bottles with a garden hose and
applied labels and caps by hand. Today, the now Austin-based company has 11
full-time employees and distributes its product line in 38 states.
Original Sweet Tea is the line’s flagship
product; in total, eight 16-ounce SKUs and four 64-ounce SKUs are available
in flavors including Mint & Honey Green Tea, Peach, Hibiscus and
Raspberry, with some in diet versions. Sweet Leaf is currently switching
all of its products over to all-organic ingredients; two of the eight
flavors are currently organic, with four more converting by the end of the
“One of the main things that makes Sweet Leaf
unique is that we use pure cane sugar to sweeten our teas, and we brew all
our teas from real tea leaves. We don’t use any tea solids or
concentrates,” says Sweet Leaf Co-Founder and Vice President of Sales
David Smith. “We use all-natural, organic ingredients and no
artificial colors or flavorings. Our goal, all along, has been to make the
best-tasting product we could and the use of natural and organic
ingredients stems from that.”
The learning curve
As Sweet Leaf has grown, it has evolved beyond its
original do-it-(all)-yourself approach in two critical areas, marketing and
manufacturing. As a start-up with a limited budget, Sweet Leaf generated
consumer buzz with samplings in stores and at events like marathons, bike
races, music events and outdoor festivals. With its growth, Sweet Leaf has
added more traditional marketing vehicles such as print and radio
On the product formulation and manufacturing side,
Sweet Leaf sticks to its start-up roots, dreaming up new ideas in its
kitchen, rather than employing an army of product developers.
“It starts in the kitchen with us just brewing
regular tea bags and adding natural ingredients,” Smith says.
“A lot of times we’ll go to Whole Foods and buy different
ingredients, brew up some tea with those ingredients and get it to where we
think it tastes great.”
Once Sweet Leaf’s in-house testing yields a
solid product idea, it works with a flavor house to refine and formulate
the recipe. The recipe, ingredients, packaging and labeling materials are
then sent to the plant, where it is produced and shipped to stores.
“The first few years, we did all of our
manufacturing in-house, but it really didn’t give us time to actually
get out and sell and market the product,” Smith says. “At that
point, you’ve got to define what your business is – are we in
the manufacturing business or are we in the sales business? After about
three years of doing it ourselves, we found a co-packer and now we
outsource everything. It was a costly learning experience doing it
ourselves, but it definitely gave us the right foundation to know how the
plants work and what to expect from them. We were able to speak their
language and understand their challenges a little better since we had done
it ourselves in the past.”
Building distribution and reach
Sweet Leaf is most widely available in the grocery,
natural foods and convenience store channels, but can also be found in some
mass merchandise and club stores; it hopes to expand into the foodservice
channel this year. The product line is available nationally in Whole Foods
and Wild Oats natural food stores. Outside of those chains, Sweet
Leaf’s distribution is most heavily concentrated in Texas and
Colorado, with additional strong presence in the Northeast, Southeast and
Midwest, though it hopes to increase its West Coast market penetration.
Like many smaller beverage-makers, Sweet Leaf has
worked hard to create a distribution network. “It definitely takes a
little bit of time to get the relationship going and get the distributors
to bring in the product. It’s a three-part sale – you’ve
got to sell the distributor, then you’ve got to sell the retailer to
get the distributor to start moving it and then you’ve got to sell
the end consumer,” Smith says.
Getting shelf space is tricky, too, since major
grocers often require payment of expensive slotting fees that are out of the reach of most start-ups. “Being a small
company, it’s pretty difficult to cough up a hefty slotting fee with
no guarantees of how long you’ll be on that account,” Smith
says. “We have done it, but we’re real cautious about it. If
the retailer wants too much money, we just wait until they want the product
more. Typically if you can get their consumers to demand the product, the
retailer will eventually listen to the consumers.”
The future looks even sweeter for Sweet Leaf. It plans
to introduce at least one new flavor this year, and will concentrate on its
Texas and Colorado markets, as well as building its reach nationwide.
“We’re really trying to focus a lot of
energy on pulling more product out of our existing business and focus a lot
of time on our main markets,” Smith says. “But at the same
time, we’re still trying to get into the rest of the grocery store
chains we’re not already in. Once you establish the foundation in the
grocery channel, which is probably the most successful arena to deliver
your products to the consumer and build
awareness, you can then jump into more competitive channels like the
convenience store business.” BI
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The February 2020 issue dives into Essentia water, their high-pH and high aspirations for ongoing innovation. Speaking of innovation, this issue also features a special report on how (and why) the zero-proof functional beverage market is growing. Also, check out what types of rifts and shifts are shaking up the wine category and discount variety stores, as well as the latest ingredient highlights (hint: exotic fruits make an appearance). To cap it off, peruse new product releases, the latest appearances in packaging, and holistic approaches to cognitive health. Thirsty for more? Subscribe to get the latest stories delivered right to your inbox.
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Check back throughout the month for additional content.