Talbott Tea Acquired by Jamba Juice

CHICAGO, Ill.

Talbott Tea’s founding entrepreneurs are basking in the limelight after selling their specialty tea company to Jamba Juice Tuesday – the culmination of a brilliant business plan that delivered notoriety and wealth beyond their expectations.

“Actually it didn’t happen exactly as planned,” says Talbott Tea co-founder Shane Talbott. “We were surprised it happened so soon.”

Jamba Juice Company will retain the Talbott Tea name and will gradually phase out Mighty Leaf Tea, now in 440 of the company’s 750 locations. Locations include 307 company-owned and operated stores and 443 franchise-operated stores with 19 more overseas. Talbott is expected to expand its retail presence in specialty grocery, gift stores, hotels, resorts and spas.

Julie S. Washington, Senior Vice President and Chief Brand Officer at Jamba Juice Company, was named President of Talbott Teas. She said the companies share specialty product orientation characterized by all-natural, higher quality and signature blends. “There are a lot of commonalities in brand standards and product focus,” said Washington. The two companies are “harmonious” and the “landscape for innovation is wide open” she said.

Talbott, 40, and 15-year partner Steven Nakisher, 42, established Troupe salon and spa in their 30s and eased gradually into the tea business a decade ago.

“I have always been a tea drinker and would talk tea with clients, many skeptical or simply unaware of quality tea,” said Talbott. “I would say to them, ‘I’ve got something to change your mind’ and it did. All those years of conversations helped us realize the opportunity,” he said.

Talbott’s roller-coaster ride to success reached a high point in December 2010 when TV Diva Oprah Winfrey told viewers on air that Talbott Tea was one of her “favorite things.”

“It blew the doors off,” he recalls, “There was a huge spike in offers, we had something like 4,000 orders before Thanksgiving.”

Sales kept building from there and cash flow from online buyers was instant but late payments on wholesale orders added financial strain.

Talbott recalls a low point early in 2011 when they had exhausted their reserves and “even with purchase orders in hand banks would not help us.”

Frustrated, they began applying to the top-rated ABC Television program “Shark Tank.” The show gives entrepreneurs an opportunity to convince five, tough, self-made wealthy “Sharks” to finance their success, or shatter dreams.

“Steven and I were fans and enjoyed watching the show so we decided to apply,” Talbott recalls. He and Nakisher were turned down. So they applied again. And again. Finally the network scheduled a June appearance.

In the months prior to the taping Talbott and Nakisher studied the program intently “and tried to be mentally prepared for the best case (and worst case),” he said. On the air “we were as honest as we can be. We have a quality product and great passion and love that we pour into it,” he says.

“We thought it went well,” says Talbott.

Last Friday it became apparent just how well they fared. The network does not reveal the outcome prior to airing, but Shark Kevin O’Leary’s enthusiasm was evident in his response. Millionaire Daymond John signaled his approval but excused himself from challenging O’Leary’s decision to invest due to a potential conflict of interest with an unnamed client. Astute watchers knew something was up.

O’Leary, who publishes “Cold Hard Truth” and sold his educational software company to Mattel for $3.7 billion, praised the venture during the Shark’s deliberations but because the final outcome was unknown to Talbott “things soon went back to normal,” he said.

A few weeks later, Talbott and Nakisher were asked if they would be interested in meeting a potential buyer. Shark Daymond John, working with billionaire real-estate investor Barbara Corcoran, then brought Jamba Juice to the table.

Negotiations went smoothly and concluded last fall, says Talbott. It was decided to keep the deal quiet until the Shark Tank episode aired. As luck would have it, ABC’s ratings Friday reached a two-year high and Shark Tank was tops for unscripted series.

On Tuesday Jamba Juice Company president, chairman and CEO James D. White announced the sale.

“The purchase of Talbott Teas is part of Jamba’s strategy to accelerate growth through the acquisition of specialty, lifestyle brands that support Jamba’s expansion into new and relevant product categories,” White said in the announcement. Transaction details were not disclosed but Wall Street boosted the Emeryville-Calif.-base firm’s share price (JMBA) following the deal.

Talbott, a Master Certified Tea Blender will remain in Chicago as Vice President Innovation. Nakisher will serve on the Talbott board of directors and participate in upcoming projects.

White said that “Jamba shares Shane’s commitment to using the finest quality ingredients to create premium tea blends that are flavorful and healthful, but designed with a flair that only a visionary trendsetter could achieve. I welcome his creativity on our team.”

The release praised Talbott’s “unique talent for blending specialty ingredients to produce exceptional, award-winning teas that appeal to tea aficionados and conventional consumers alike.”

Talbott offers 23 customizable flavors made with high quality ingredients. Talbott’s premium teas are Fair Trade Certified and without artificial flavors, preservatives and colors. Packaging is in museum quality, designer tins and bags.

“Jamba is a progressive, specialty beverage brand with a passion for creating innovative, trendy offerings that support healthier lifestyles,” said Talbott. “Jamba has broad reach and appeal among consumers who are seeking premium products at affordable pricing that are better-for-you and great tasting,” he said.

“When we first created the business, our vision was to someday be open to discussing acquisition and partnerships,” said Talbott.

Last spring in the midst of the slumping economy he and Steven talked about a five-year end game, he recalls. “When Jamba came to us to make the offer the surprise was in the timing. At first we thought ‘not quite yet’ but the more we talked we knew it was the right time for us.”

“It was always our plan to create a viable business. We did. This sale means it will go on beyond us,” he said.

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