Hey guys! Welcome back to Products Worth Talking About — the show about disruptive physical products and the people who built them.
Today, we’re having a Founder Happy Hour episode, where we have great conversations with successful small business owners. We had the pleasure of talking with Teakoe Tea Supply Company founder Pete Jokisch. Pete has a ton of valuable insights about growing small businesses and succeeding as an entrepreneur.
In today’s Founder Happy Hour episode, you’re going to learn about the importance of staying flexible in business, how to get products in grocery stores, how to expand the availability of your goods, and the most critical thing you need to become a successful entrepreneur. Let’s dive in.
Pete Jokisch’s passion for tea began in his college years at Colorado State University. He enjoyed the energy benefits of tea as well as the calming effect it had on him. He initially began his career as a lacrosse goalie, but he pivoted and began developing and selling his own tea products:
“I was fortunate to play lacrosse in college and then played professionally for a few years. … I kinda worked my way [up] and realized that lacrosse … was not a lifetime career. … I decided to figure out if tea was the ultimate path for me. We went to farmer’s markets and started selling there and ultimately got into the food-service space, and that kind of evolved over the years as well. And now we’re more focused on the retail stuff.” – Pete Jokisch
After some initial success selling dry tea products, Teakoe began researching and developing ready-to-drink packaged products. Unlike many drink companies, they developed their packaged product internally rather than outsourcing.
“I’d say it probably took us all in all about nine to 12 months to … get our first formulations. … We wanted to know … how this thing works [and] not just go to a flavor development house [and] have them create something and it not be truly unique to us and authentic. … There’s probably more of a learning curve doing that, but I feel like we understood the product better moving forward as we creat[ed] flavors.” – Pete Jokisch
Teakoe’s initial packaged tea flavors included pear, pineapple, pomegranate, and black tea. Although they worked diligently to develop their initial packaged flavors, Pete’s company immediately faced difficulty selling their products.
“I think whenever you launch a product, you have got to pay attention to not only what consumers are saying but also retailers. And to be honest with you, the numbers don’t lie. … Within the first six months, it’s just not hitting like you want it to, and you immediately kind of self-doubt a little bit. And you wonder, ‘Did we just spend all this time and money to create something that just consumers aren’t looking for?’… We’re looking at the metrics of what our growth was with this product and not seeing where it needed to be.” – Pete Jokisch
Teakoe struggled with finding consistent customers for their initial line of pre-packaged products. Within a year of their initial product launch, Teakoe began pivoting towards developing a different product. They spent a great deal of time researching market trends and engaging with focus groups to steer their pre-packaged drinks in a new direction.
“[We] started testing this kind of fizzy concept. And people just were freaking out about it. They loved it. They thought it was such a cool play on the product that we decided [to] just make a hard pivot and say, ‘We’re cutting off [our original pre-packaged tea] completely.'” – Pete Jokisch
Teakoe canceled their first iteration of pre-packaged products and began re-branding. They launched their signature fizzy teas, which was met with huge success from both consumers and retailers. Their fizzy teas are still a major selling point for the company.
When developing new products, it’s crucial to know your market and your customer base. Once Teakoe spent more time in the research and development of their new product, they were able to create something lucrative and original. If your products aren’t selling as well as you hoped, you might need to take a step back and pivot towards developing something disruptive.
Since developing both their dry tea products and their pre-packaged teas, Teakoe has had a great deal of success working with major retailers. Their success in major grocery stores first began with Whole Foods Market:
“Whole Foods [was] really a launching point for us. [Whole Foods] was just helpful because they want to see you succeed. … So they kind of work with you to better understand how you can pivot and be successful.” – Pete Jokisch
Pete has an incredibly unique perspective on launching products within grocery stores because he’s familiar with both the traditional process and the contemporary, more corporatized process. Before Whole Foods was bought out by Amazon, Teakoe convinced them to carry their dry tea products:
“We had our dry tea. That’s how we got into Whole Foods originally. … And we just get local … team leaders on board [by saying], ‘Hey, we’re a local provider. This is what we do. This is what we’re all about. Would you get behind this product?’ And you get … enough of store managers [on board]. … And then you kind of go to the corporate regional office and say, ‘Hey, I got these six managers that would love to have this product. Can we have a conversation?’ … So that’s kind of the old school way.” – Pete Jokisch
After Teakoe developed their fizzy tea product line, they had to pitch their products to Whole Foods again, but this time they had to go through a new process because Amazon bought out Whole Foods:
“[Now] you definitely just want to go right to the office. … They have review schedules. And so [I] highly recommend you stick to those review schedules, and you want to make sure you don’t miss that window, or else it’s another year until you’re able to present [your product]. … We were fortunate with our cans that we already had a relationship [and] were able to present on schedule. So that’s the way we approached [getting pre-packaged products into Whole Foods].” – Pete Jokisch
Teakoe was able to get on Whole Foods’ review schedule because they already had a relationship with the company. One way to present your product to Whole Foods outside of the review schedule is piquing the interest of local foragers. Local foragers can present products to Whole Foods outside of their review schedule.
An important step that Teakoe is now taking is expanding its retail reach outside of Colorado. Pete observed that a crucial part of expansion is showing sales metrics to both investors and vendors:
“You have got to prove yourself through numbers … in order to get outside of the region. … Everyone looks at your metrics. ‘What [is your] baseline before you go on promotion? What is the baseline lift when you’re on promotion?’ And then, ‘What [does] your baseline come down to post-promotion?'” – Pete Jokisch
Product promotion reveals a lot about your growing customer base. When you have a sale, more people will buy your product, but you also need to retain customers after your sale ends. If you see a bump in your numbers during a promotion, and they drop back down to your pre-promotion numbers after the sale has concluded, it indicates to investors and vendors that your product fails to draw in new customers. Teakoe draws in new customers through their promotional items, which indicates to investors and vendors that their products are valuable. They’re now starting to expand into marketplaces in Southern California.
On top of their physical marketplace sales, Teakoe also offers their products on their website and Amazon. Pete noted that they don’t make a significant amount of profit from Amazon, but they do receive valuable data that helps them know where to expand:
“The biggest reason for us [to use Amazon] is we want to understand where are our customers are located. Where can we grow next? … Part of our strategy has been … to grow into the southwest of Southern California. [Amazon] paints a pretty good picture for us to kind of grow that way just through distribution and costs associated with launching in those territories. … [We don’t get] a ton of profit on Amazon. … It’s really capital-intensive as you have a lot of advertising spend and they have a lot of fees and whatnot, but if you know … why you’re using it, you’ll be able to get really good data from that.” – Pete Jokisch
Teakoe learned from their Amazon data that most of their out-of-state sales come from Southern California and New York, so they’re now using that data to expand their marketplace reach. Their online sales on Amazon and their website have also dramatically increased in the last year.
Working with major physical and online retailers has enabled Teakoe to expand its reach and increase its revenue.
Teakoe has gone through many ups and downs during its lifespan. Pete has learned a lot about entrepreneurship through both the good and bad times. We asked him what advice he would give to aspiring entrepreneurs, and he told us about a time in which he almost gave up on his business.
There was a time when a large percentage of Teakoe’s business came from the restaurant Smashburger. Because their products are tea-related, Teakoe’s success with Smashburger hurt Coke’s iced tea sales. During that time, Pete had taken out loans to purchase equipment to obtain other accounts. Smashburger suddenly stopped doing business with Teakoe because Coke paid them off:
“[We] got a call that [Smashburger] had pretty much gotten an offer from Coke … for about $500,000. And we were pretty much done [doing] business with them. … We had to take revenue from that account and invest in equipment to get other accounts. … And so we not only had 42% of our business loss, but we had probably around $150,000 in loans on equipment that we were stuck with. … And it was like, ‘Well, it’s time to pack up shop.'” – Pete Jokisch
Pete faced an incredibly dark moment during that time and was riddled with self-doubt, but he persevered through that difficult period. After receiving SBA loans, Teakoe launched a new product line that earned back their lost revenue:
“We completely pivoted. We introduced a new retail product line, our brew at home iced tea. We diversified our portfolio, and we actually got that revenue back. … I learned a lot during that period of time. … At any moment, the … rug could be pulled out from underneath you. … You also learn a lot about yourself and about the grit you have [during difficult times].” – Pete Jokisch
Pete learned a great deal about himself and his passion for his business. Perhaps the most important part of being an entrepreneur is having the drive to keep your business going in both good and bad times:
“When you start a business, are you getting into it because you think it’s a good opportunity [or] are you actually passionate about it and you’ll do whatever it takes to make sure that you are successful at it?” – Pete Jokisch
If you become an entrepreneur for the wrong reasons, you won’t be able to pivot and keep your business going during hard times. Pete could have given up when his business lost almost half of its sales, but he continued and was able to figure out a way to make up for Teakoe’s lost revenue.
We were so thrilled to have Pete Jokisch on today’s Founder Happy Hour episode! His journey building Teakoe Tea Supply Company is truly inspiring, and we hope you learned a lot from his story!
You can buy Teakoe products in local grocery stores if you’re located in the Rocky Mountain region or Southern California. Teakoe’s website has a store locator that will help you find one today! You can also order their products online on their website and Amazon. Also, you can keep up with Pete on LinkedIn and Twitter, @TeakoePete.
If you’re interested in building a product-based business like Teakoe, look into our Business Plan Course. You’ll learn all about delivering exceptional pitches to draw in investors and how to detail the direction of your start-up company!
We hope you enjoyed today’s Founder Happy Hour episode! If you learned something new from Pete, let us know about it! Take a screenshot of the episode and share your greatest takeaways with us on Instagram, @productsworthtalkingabout. If you’re a fan of the show, make sure to subscribe on YouTube so that you’ll be notified when we release new episodes and content! Let us know what products and brands you want to see in future episodes!
Thanks for reading! Until next time—
RT and Tyler