When Rishi Tea & Botanicals founder Josh Kaiser launched his business as a 24-year-old fresh out of college in 1997, he was used to being the youngest one in the room. Deeply invested in his dream job (“I absolutely love tea and botanicals,” he gushed), the decades since have been hard work in scaling the brand from loose-leaf teas to a variety of formats — including its BevNET Award-winning ready-to-drink Sparkling Botanicals line.
Somewhere along that line, the tables turned.
“On my 50th birthday, I looked in the mirror and I realized, ‘oh man, you are the oldest person in the company now,’” he said on a call this week. “And as the oldest person in the company, I want to prepare this business for the rest of my young staff to carry it forward and just be as strong as possible in this market and keep going.”
That realization helped Kaiser make the decision to open a new chapter in the family owned company’s history this month by taking on equity growth financing from California-based venture group SBJ Capital. Having sustained the company through funding provided by himself and his family, it marks Rishi’s first-ever outside raise. The size of the raise was not disclosed, though Kaiser stated his family was still a “significant owner.”
In a letter to employees, Rishi’s founder and CEO praised SBJ’s “strong track record of investing capital and operational expertise into founder-led brands and supporting them in premium food, lifestyle and beverage markets.” On its website, the firm lists drive-in restaurant concept Swenson’s as a partner company, as well as others outside of the CPG space.
Much of the new funding will go towards making the brand’s hero ingredients “more tangible to all of our audiences,” according to Rishi president Jeffrey Champeau, who started with the company as a tea buyer over a decade ago. That means digital marketing, video content and educational tools for both its retail and B2B customers.
The capital is also expected to fuel growth for Sparkling Botanicals by Rishi, the zero-sugar 12 oz. canned drinks (SRP $3.49) that in many ways epitomize the brand’s evolution, as well as its ambition. Introduced at the onset of the pandemic, the soon-to-be-8-SKU line quickly emerged as a way to offer on-premise customers a to-go product, and has since been spun off as its own business unit headed by former Honest Tea executive Matt O’Brien out of New York City. All teas and botanicals used in the drinks are selected and blended at the company’s flagship 50,000 square foot facility in Milwaukee, and then sent to a brewery in Vancouver, Canada with whom the brand has an exclusive relationship. Rishi has invested to augment capacity at its current partner with still more “room to grow,” Kaiser said, while also citing the local water quality as a benefit. The new capital will help bring innovations like the forthcoming Blue Tea Jasmine flavor to market faster, he added.
With a store count of 2,800 across both retail and foodservice, Sparkling Botanicals is hardly a household name. But Kaiser said the brand has witnessed how its deep relationships with cafes and on-premise venues, including in international markets like South Korea, has helped drive awareness overall. Innovation continues on the loose-leaf and sachet tea side as well: at Natural Products Expo West next month, Rishi is set to unveil four new botanical blends for the national retail market in both loose-leaf and sachet styles: Pink Lemon Ginger, Cinnamon Tulsi Spice, Bergamot Rose and Greek Mountain Tea featuring chamomile and oregano. Also slated to debut is a 32 oz. London Fog tea concentrate for foodservice customers. With 18 permanent retail sachet SKUs, 3 permanent concentrate SKUs and 300 permanent loose leaf teas on offer, Rishi doesn’t lack variety.
On a personal level, the new capital offers Kaiser a chance to step back into the product development and global sourcing work that has driven his passion for the past 25 years, while setting up the next generation of brand leaders to carry on Rishi’s legacy. Along with Champeau, Rishi’s chief financial officer Jenny Daniels and EVP Nathan Kosky are set to continue in their current roles, per Kaiser’s employee letter.