Chai Maker Dona To Spinoff RTD Sister Brand Ouli

Brooklyn, New York-based chai maker Dona is spinning off its ready-to-drink portfolio under a new brand called Ouli, a move that the company hopes will attract investors and support its long-term growth ambitions.

Launched in 2014, Dona has enjoyed a steady rise, as its family of barista-grade chai concentrate products have found a place behind the counter at Toby’s Estate, Variety Coffee and other high-end cafes and espresso bars around New York City. That line’s focus on classic flavors — masala, dirty and turmeric — stands in contrast to some of the consumer-focused products that founder Amy Rothstein has developed since, including spice and botanical-infused tisanes and natural sodas, that have been sold mainly in the same on-premise accounts that use Dona concentrates.

That disconnect became more apparent as the company continued to grow, Rothstein said, and creating and launching the Ouli brand was an acknowledgment that the two parts of the business are on different growth paths. While the concentrate business is mature and self-sustaining, Ouli’s ambitions to launch its ready-to-drink products at grocery retail requires the company to fundraise for the first time, and the new brand identity is designed to help it define its vision to both consumers and investors.

“With RTDs, our goal is to launch, get all our strategy, assets and financials together, and then raise enough money to truly launch a beverage brand through grocery,” she said. “That difference between the two is something that my brother and I learned over the years by working with both cafe chains and grocery stores. We can do it but we need investment so we can put money into promotions and strategy and marketing.”

Rothstein said the company is seeking a strategic investor with experience in the beverage industry. Prior to the spinoff of Ouli, the brand was aiming for a $1 million seed round, though Rothstein said she and her brother and business partner Peter Rothstein are now revising their financial targets and determining which of the two companies are available for investment and at what valuation.

Going under the Ouli banner also allows the brand to indulge in flavors that “are more bold and weird and vibrant,” Rothstein said. The tisanes — sugar-free and caffeine-free herbal infusions — are available in 16 oz. glass bottles in Cardamom Mint, Elderflower Fennel and Turmeric Cherry flavors while the 12 oz. canned sodas are available in Pink Peppercorn Lemon, Turmeric Honeybush and Juniper Lime varieties. The tisanes are now available under the Ouli branding, with the sodas set to follow. Both Ouli products will be presented jointly to retailers once the changeover is completed.

Like many other beverage brands, Dona enjoyed a surge in e-commerce during the early months of the pandemic, which tripled in the first month following mandated lockdowns. That increase helped offset a painful drop in on-premise sales, which fell around 80% in the first two months, but also served to reorient the company’s growth strategy around digital marketing. Rothstein noted a “change of mindset” in that regard.

“We need to invest thousands and thousands in order to make a big enough return for it to make a difference in revenue for our company, so it’s on us now to plan to figure out where that budget comes from and when we can get that started, because it really is a spending game with the internet,” she said.

In the meantime, the company’s stickiness with its existing online consumers has Rothstein feeling upbeat.

“In doing a deep dive into our analytics, we realized that we have a ton of returning customers in direct-to-consumer, which means we are making stuff that people like, which is kind of energizing,” she said. “People are using this chai every day — now we just have to figure out how to widen the funnel and reach more people.”