Steeped Tea Finds Funds in Friendly Dragon’s Den

HAMILTON, Ont.

Many couples enjoy hosting tea parties but Hatem and Tonia Jahshan have elevated that pastime to a $1.3 million business that drew praise and funding from investors on the popular Canadian television program Dragon’s Den.

In exchange for 20 percent share of the company, Steeped Tea, Jahshan sought $250,000 financing on the program, which aired Wednesday night. He risked a public drubbing from the often skeptical and sharp-clawed five-member panel but was instead rewarded with three competing financing offers to expand his organization of 800 “steeped tea consultants.”

His secret? Hatem told World Tea News during a break at the CBC Television pre-show party that he and his wife Tonia emphasized the social aspects of the gathering. Tea is a soft sell, he explained.

Their network of multi-level marketers host in-home events for tea drinkers eager to sample various styles of quality, loose-leaf tea, properly steeped and served. Like a Pampered Chef ™ party, admission is free and those who attend anticipate tasty snacks and pleasant conversation. The co-CEOs share responsibility for managing the venture with Hatem handling logistics and Tonia hosting events (and more recently training hostesses in a ever-expanding nation-wide network). The company offers 150 teas for sale, marketing support, content and expertise for branded websites.

“Our goal was not to present a library of loose-leaf teas, it was to organize the perfect get-together,” he said. Tea is a social lubricant, “the best ingredient we could have chosen.”

Unlike catering, the parties require a personal touch. “You really can’t hire people to do this,” he said. Consultants enjoy sharing what they have learned about tea and guests are often amazed, eager to try and buy.

Steeped consultant Joan Hepburn, who won a Las Vegas trip in 2010 for her efforts, posted this note on the CBC website. “It is so exciting to be part of this incredible company! We are just at the beginning of what is going to be so great! And the ride so far has been outstanding! Thanks Tonia and Hatem for sharing this opportunity to drink the BEST loose TEA around and have a Fantastic Business!”

Consultants purchase a $250 starter kit and typically generate $500 per party, keeping a 25% commission. Many earn $3,500 a month with the highest earner bringing in $30,000 annually (in addition to a salary from her full-time job).

While initially a bit fearful prior to the taping this spring “it actually went very well,” Hatem recalled. By the end of the program “all of them were fighting for us.”

As he explained his plans to expand the business into the United States during the taping, potential adversaries like Arlene Dickinson, Kevin O’Leary and David Chilton became advocates. O’Leary was the most aggressive, getting nods from both Tonia and Hatem when he told them “you will need more money.”

“I’ll give you $300,000 for a 30% share,” he said. Dickinson offered $250,000 for 18% of the company but the couple accepted the initial joint offer of $250,000 from Chilton and Jim Treliving, Chairman of Boston Pizza.

It all began six years ago with a pot of tea in Nova Scotia where the couple was vacationing. The Jahshan’s discovered the flavor and fun of full-leaf teas drinking a Crème Earl Grey, bought several bags and decided to share with their family what they had learned. Tonia began with parties for friends at her home and was soon hosting 15 a month. Invariably guests asked where they could purchase teas.

Soon “she was gone all the time,” Hatem said. Tonia, who was pregnant with their son at the time of the taping, explained that she wanted a business opportunity that would give her time at home to raise a family. She has been training a direct-sales team that has expanded to every province.

There are only three direct-sale competitors in North America Hatem told the Dragons when O’Leary asked why Steeped Tea was expanding south. “We are well positioned in Canada” he explained, “the United States is a $26 billion market for direct-sales, with hundreds of rural communities where loose-leaf tea is not well known.”

Source: CBC Television

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Dan Bolton

About Dan Bolton

Dan Bolton edits STiR Tea & Coffee Industry International. He was formerly editor and publisher of World Tea News and former editor and publisher of Tea Magazine and former editor-in-chief of Specialty Coffee Retailer. He is a beverage retail consultant and frequent speaker at industry seminars and conferences. His work has appeared in many beverage publications. He was a newspaper reporter and editor for 20 years prior to his career in magazines. Dan is the founding editor of Natural Food magazine and has led six publishing ventures since 1995. He lives in Winnipeg, Canada.

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