Jean's Blog

Entrepreneur Fridays: Steaz Teas

Posted by Jean

WHO:Eric Schnell and Steve Kessler

WHAT: Steaz: The Healthy Beverage Company. Steaz is the maker of USDA Certified Organic and Fair Trade Certified beverages, including iced teas, green teas and energy drinks. They’re the best-selling natural Energy Drink brand in the U.S.

WHEN: 2001

WHERE: Newton, Pennsylvania

HOW: Kessler and Schnell met in the 90’s while working at health food companies. The same family owned both companies and the duo worked together on the launching of over 1,000 products. “One day we said that we could create a company that really makes a difference in the world; we had a great idea-making soda healthy,” says Schnell. Their vision was to take a familiar taste and make it healthier. “We decided to change soda and make it healthy. We put green tea and organic ingredients in carbonated water,” says Schnell.

Schnell and Kessler took their idea and did what I typically tell people not to do. “We used every nickel in the bank, mortgaged our houses, took out credit cards and maxed them out…all the crazy things entrepreneurs do. We believed in the concept,” says Schnell. The gamble eventually paid off. With about a half a million dollars in seed money, Kessler and Schnell began to build their brand. They worked tirelessly to promote their brand and six months before it’s official launch they left their 9 to 5 jobs.

Today, their business is growing 70% annually and they’re on track to do nine to ten million dollars in business this year. Earlier this month Steaz hit the shelves of 1,700 Target stores nationwide. Because of a focus on marketing, Steaz is yet to turn a profit, but they expect to in 2010. “30 cents on every dollar we bring in and put it back into marketing. We’re a little ways away from breaking even. For us it’s all about marketing, marketing, marketing,” says Schnell.

But to Kessler and Schnell, it’s not just about the profits. It’s about giving back too. Steaz is built on what they call a “triple bottom line” business plan, where everything they do aims to improve people, the planet and profits. “Everything we do is based on taking care of people, the planet and using our profits to help give back,” says Schnell. As a company who uses Fair Trade ingredients, Steaz is helping to ensure that farmers on the tea estates are paid fair prices for their goods. Steaz also partners with NativeEnergy to help promote community-based projects to reduce harmful carbon emissions. And as for helping people, since the creation of the business Steaz has donated over $100,000 to charity.

THEIR ADVICE: According to Schnell, the best thing you can do when trying to build a brand and a successful business is to start small. “If you’re starting with limited funding start on a smaller scale locally, prove the concept, and then own the market. Take what you’ve learned and expand the business when you’re ready. Don’t rush,” says Schnell. According to Schnell, far too many businesses go under because they don’t have the correct infrastructure in place to support marketing and sales. “Looking back, some of the most successful companies of packaged goods have started small, built it really strong in one area and then moved along to the next key city,” says Schnell.