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ChaiElixir CEO: We’re a sparkling chai tea beverage; there is really nothing like this on the market

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By Elaine Watson+

24-Nov-2014
Last updated on 24-Nov-2014 at 18:47 GMT2014-11-24T18:47:32Z

ChaiElixir promises a 'full-bodied experience with a really robust flavor profile but with a clean taste'
ChaiElixir promises a 'full-bodied experience with a really robust flavor profile but with a clean taste'

If you don’t like taking risks, don’t go into the beverage industry, says the founder of ChaiElixir, an Oklahoma City based start-up selling sparkling tea. “A significant portion of new products do not make it past year one or two, but that’s the nature of the industry, so you’ve just got to do your due diligence and be prepared to take a risk. 

“If this is a complete failure I’ll write it off as an experience, but on the flip side there is a chance that I can create something people could really love," adds Wonny Kim, who returned from an army deployment in the Middle East in 2012 looking for an “all-natural beverage that was sparkling, had a little bit of pep, not too much sugar”, couldn’t find one, and set about making his own.

He then worked with beverage development company Power Brands to translate his concepts into commercial products, showed them to the trade in 2013 and landed his first production run in April 2014, having attracted interest from some key players.  

“Of course you always want all the cogs to fall into place at the same time, to have your demand in place before you commit to production to mitigate your risk,”  Kim told FoodNavigator-USA.

“But I was glad I took a risk to get my production in place when I did, because we’re now in six KeHE distribution centers, some big retailers are taking interest in the brand and other national distributors are talking to us.”

If Pepsi thinks there is potential in sparkling teas, that’s good news

His teas, which hit shelves in September/October, are now available in around 100 stores and should be in around 300 in the first quarter of next year, he says. 

The MSRP is $2.59 to $2.99, which is “comparable to premium soda”, says founder & CEO Wonny Kim.

There are three variants: Essence (white tea infused with white peach nectar), Fusion (oolong tea with a hint of vanilla), and Vivid (green tea with natural citrus flavors and spices). Each is sweetened with cane sugar and stevia, contains 90-100 calories per 12oz bottle, and no preservatives.

Says Kim: “There is really nothing like this on the market, which is both exciting and a little nerve-wracking because it’s great to be the only guy out there, but at the same time, well, you’re the only guy out there, so it’s not necessarily a proven concept.”

Having said that, the fact that Pepsi is planning to launch a sparkling tea (PepsiCo recently said   “consumer research shows that sparking tea drinks with low calories and real tea credentials have got tremendous potential”) suggests that he might just be onto something, says Kim.

If Pepsi thinks there is potential, that’s good news.”

And the prospect of facing a competitor with pockets that deep? Daunting, but exciting, he adds: “When the water level rises, it raises all the ships.”

It’s a tea, it’s a new age drink, it’s a high-end soda

So how is the brand positioned? “The nice thing about ChaiElixir is that it’s very flexible,” says Kim.

“It’s a tea, it’s a new age drink, and it’s a high end soda, so retailers can position it in any of those ways. But in general, we’re always trying to get in their cold cases as it is an amazing experience when you taste it cold.”

Millennials want a full-bodied experience, a robust flavor profile but with a clean taste

For consumers, the experience is unexpected, but not completely off the wall, he says.

Wonny Kim, founder & CEO, ChaiElixir: 'The army trains generalists, and then we’re trained to go out and seek advice from subject matter experts, and that’s essentially what my operational approach has been to this industry.'

I wanted something new and different but also a bit familiar, a full-bodied experience with a really robust flavor profile but with a clean taste. It’s also lightly sparkling as too much carbonation can add a bitter flavor. It has about half the sugar of a regular soda, but it’s still a treat, it’s all about finding a balance.”

The target audience is Millennials; specifically young professionals - the “key influencers” - says Kim, who doesn’t have a background in the food & beverage industry, but says his experience in the military equipped him with some useful transferable skills.

 “My background is primarily military, my degrees are in philosophy and psychology, so I have no experience in the beverage world, but I had the help of a great R&D firm [Power Brands] and got a good idea of what was involved financially and operationally before going forward with it.”

The army trains generalists, and then we’re trained to go out and seek advice from subject matter experts

He adds: “Looking back, I still probably underestimated how much money it would take to get the product from concept to launch and then to where we are now, but it’s been a great learning experience for me and I’m glad I’ve had a lot of industry veterans advise me along the way.

“I guess that speaks to my army experience, really. The army partly trains its officers as generalists in operations and organization management. A portion of that training is the understanding of having to go out and seek advice from subject matter experts, and that has been a part of my operational approach with this industry.

“My goal is to build a sustainable business, to get to positive cash-flow, in year two or year three, of being in the market.”

 

1 comment (Comments are now closed)

Sparkling tea in Thailand

While Mr. Kim says that there s nothing like this on the market that may be true for the USA but we have sparkling tea here in Thailand.

http://www.oishidrink.com/2011/product_en/detail/chakulza/

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Posted by john miller
24 November 2014 | 18h432014-11-24T18:43:47Z

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