The relatively low cost of formulation has launched a lot of bottled chai in the past year.
The most recent is Banyan Tree Chai in Louisville, Ky. Founders Amy and Sam Patel introduced the bottled line last week. The Patels grew up in India, relocating to Louisville in 1998. The chai is a family recipe passed down by Amy’s father, according to a business feature published in the Louisville Business Journal. Sam was COO of HRS Hotels Group, which owns five hotels in Kentucky and one in Indiana, according to a report in the Journal. They founded the company because “we wanted to pass something down to our kids,” Sam told the newspaper.
Last year the couple turned to Berner Foods Inc. in Dakota, Ill. to produce the tea in three flavors, Masala Latte, a Ginger Latte that is slightly spicier the the masala and a sweet Vanilla Latte. All contain milk.
Family-owned Berner is a 68-year-old private label bottler that supplies several large store brands. The firm assists entrepreneurs like the Patels in developing recipes, sourcing ingredients. “We give you the ability to “make it yours,” reads the Berner website.
The third leg of the stool is marketing. The Journal reported that the Patels hired Jeff Stum, a partner at Louisville-based marketing agency Spicewood Branding to help at launch along with Louisville-based web designer Mightily which was tasked with developing the website, social media presence and packaging.
There are infinite variations of chai, which blends black tea and milk with spices that typically include cinnamon, black pepper, ginger and cardamom. It lends itself to many flavors, some like pumpkin pie spice are now considered stand-bys. Chai is viewed as a morning hot drink and is a popular offering in coffee shops. Banyan Tree intends to place its chain in local grocery and retail locations including the University of Louisville. The tea, in white 13.7 fl. oz. bottles will sell for $2.99 to $3.69, depending on the market. The company has placements in Whole Foods Market, Louisville, as well as locally run natural grocers and a chain of coffee shops.
Firms like Third Street Chai in Boulder, Colo., pioneered the category 20 years ago. “Back then, you’d say “chai” to someone and they’d glaze over, like you were speaking Ewok,” recalls John Simmons. The breakout year was 2002 when A.C. Nielsen recorded an 82% increase in sales compared to 2001. Chai has seen a big surge in line extensions and new ventures in the past 18 months. There are now many chai concentrates, powders and bottled variations.
Earlier this month Third Street Chai received a $100,000 loan from Whole Foods Market to automate its filling line and add a labeling machine that will allow the company to improve its efficiency.
“We will now be able to explore additional product offerings,” said Simmons. “We are so fortunate for the funding and would not be where we are today without their continuous support,” he added.
Learn more at: Banyan Tree Chai
Source: Louisville Business Journal, and Whole Foods Market.