Tea Tonic founder Lisa Hilbert reveals how she built a loyal following, what she has done to boost sales during her slower times of year and how her business continues to grow with a near zero-dollar marketing budget.
In a world where brand loyalty has eroded and on-demand is the new norm, building a loyal following has arguably never been more difficult to accomplish.
Yet if you can do so, you set your business up with a ‘bread and butter’ revenue base from which you can expand into bigger and more lucrative markets.
Speaking with My Business, mother-of-two Lisa reveals her approach to building a loyal following, how focusing on a few core products has helped her avoid becoming over-stretched and the impact product diversification is having on building new sales during her typically quieter time of year.
What was the inspiration behind starting your business?
Being able to reach and affect many more people’s health and wellbeing through them drinking my tea than I ever could through my practice as a naturopath.
How did you operate the business in its early days?
After finishing work as a naturopath, I would come home to blend, label and pack bags of herbs which I would sell each Sunday at the Melbourne Arts Centre Market.
Gradually as my teas became better known, I went door to door to health food shops trying to convince them to put some of my teas on their shelves. I had incredibly simple packaging then and only three or four teas, and this was over a three- to four-year period.
How did you establish credibility to cement your offering as a sustainable business?
This took many years, but was by being consistent with the quality of my product and gradually building up a strong grass roots following of loyal customers who valued what my teas offered.
As Tea Tonic became better known, it was easier to get into more stores and reach a critical mass of sales which allowed me to focus full-time on the business.
What have been the crucial things that have enabled the business to not only survive, but to grow?
There are a number of factors I feel have been crucial to Tea Tonic’s growth.
Firstly, an uncompromising focus on the quality of my ingredients, especially as an organic brand. In the beginning I was a trailblazer in this market, which is now very crowded.
Secondly, I have personally travelled and sampled tea to hundreds of thousands of people at markets, shows and stores right across Australia, giving me the opportunity to explain fully the [beneficial properties] of my teas. This has led to a very personal connection to my customers, which has given them a strong sense of ownership, faith and loyalty to the brand.
Thirdly, I have always stuck steadfastly to my naturopathic principles and followed the creed of “food as medicine”. Also, I have always tried to be innovative and ahead of trend with my blends, never a follower. I don’t do hundreds of teas, rather carefully consider any new blend regarding its health benefits, and am exhaustively in its development and trialling before it goes into the market.
These factors, as well as a strong focus on my packaging and point of sales presentations, have been instrumental in allowing Tea Tonic to grow in the market.
Conversely, what are the biggest barriers to growth for your business?
Probably the same as for most business enterprises, but in particular:
- The cost and availability of quality raw materials, which means a higher price point for my teas on the shelf.
- In the beginning, finding distributors willing to take on a more niche, quality-based product with lower margins. Fortunately now I have some fantastic distributors working with Tea Tonic, [that are] very happy with us.
- The cost of expansion, machinery premises and a flagship retail outlet and how to finance this.
Many businesses struggle with the cost/time of shipping their goods – how do you manage the logistics side of things?
We don’t really struggle with the logistics of getting product out, it’s more about getting enough quality organic material in. We have a network of reliable, cost-effective freight companies that look after us very well.
Probably our biggest benefit here is that we use a number of companies, each for their specific strengths.
What (if any) difficulties have you faced with regulators as a food business?
We have always worked within the letter of the law in these areas and sought excellent professional advice.
Because of our guiding philosophy and principles, we are never trying to cut corners, [but] rather go further with this side of the business.
What are your busiest times of year, and how do you ensure the business has sufficient cash flow through quieter periods?
Obviously winter is our prime season, but tea is a year-round beverage for my people, just as coffee is. But for the summer months, we also focus on developing our iced tea market and products, and spend considerable time working with our retailers on this aspect of tea use.
If there was one thing you would do differently, what would it be and why?
Sometimes people are surprised that I’ve been around so long and grown at, perhaps what is to some, a slower pace. But for me I’m glad for the business to have grown quite organically (no pun intended), as it’s enabled me to keep a firm control on the quality aspect of my teas and have a strong base for the company.
Like everyone, I’ve made mistakes along the way, but I’ve learnt and grown from these, which has helped make Tea Tonic the business it is today.
Any advice you would give to other business owners out there?
This is a bit tricky, as every business requires such different things.
I guess really your personality has to suit what your business is, and for me passion is the most important ingredient. Tea Tonic is me, an expression of myself and beliefs. It’s everything I love and what I would want in a tea, not something insincere or contrived as a marketing exercise.
We actually still spend very little on advertising, and grow through word of mouth and recommendation. If possible, I think it’s best if your business can develop naturally, as mine has, into a complete concept over time. This means the business intrinsically has an underlying truth, which people respond to.
I guess also for many businesses to grow you can’t be afraid of taking risks: just try to make them as calculated as possible. At some point, you’re possibly going to have everything you own at risk in growing your business.
What keeps you going after so many years?
One of the main things that has kept me going over the years has been the many, many letters I have received from people who love my teas, and who have had fantastic results and health changes due to drinking Tea Tonic.
These are so genuine and come from every part of Australia, and is part of the reason we have today such a massive mail order clientele spread far and wide across the country.
I never tire of people coming up to me at the various shows I attend to talk about their love of Tea Tonic. It’s a really personal connection I would never want to lose.
Fast facts – Tea Tonic
Industry: Specialist foods
Location: Melbourne, Victoria
Customer base: Australia-wide
Distribution: Online and specialist retailers
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.