Why on earth would someone walk away from a $100,000 engineering job at Northrop Grumman to launch an organic tea company called True Honey Teas?
That was the first thing that entered my mind when Chris Savage started telling me about his tea pod business.
The business creates 14 flavors of tea that are packed into “pods” compatible with Keurig K-Cup single-serving coffee machines, of which there are tens of millions.
“I had to do this,” said Savage, 27, who is a 2011 graduate of George Mason University. “I always had the drive to want to work for myself, do my own thing, be my own boss.”
Savage is on the tail of a couple of other Washington-area businesses that are cashing in on one of the most consumed beverages in the world: Peter Martino of Annapolis-based Capital Teas has micro-bars, bars and boutiques from Charlottesville to Philadelphia. Seth Goldman still runs Bethesda-based Honest Tea, which has sold more than 1 billion beverages and is now owned by Coca-Cola.
Like most entrepreneurs, Savage is convinced he has a breakthrough product. One worth quitting a good job over.
“I never wanted to say, ‘What if this was the big one,’ ” he said.
He has been noodling around business since he was a kid, growing up in Leesburg, Va.
While friends played sports and watched television, Savage was in his house, building stuff with Lego sets.
He was blessed with mechanical skills.
At 10, he made a device that applied chalk to pool cue tips.
At 11, he made soap in his kitchen and peddled it door-to-door.
In high school, he built a gizmo that sucked the air out of a container so fresh fruit could be preserved.
“I always loved tinkering and inventing stuff, trying to do my own thing,” he said.
Savage calls his company a “lean start-up.” He isn’t kidding.
True Honey Teas grossed $60,000 last year.
He projects that number to grow to $300,000 this year, thanks to online sales at Amazon Prime, where he listed a year ago. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.) Customers can also buy 12-pod and 24-pod boxes of his honey tea at three Northern Virginia Whole Foods grocery stores.
His Northern Virginia townhouse doubles as the company’s headquarters, subsidized by boarders who pay rent. After his mortgage, he lives on $500 a month. Anything else gets plowed back into the business.
Savage has one part-time employee, but plans to hire a full-timer to help facilitate the growing demand for the pods. Every Saturday, his parents join him at a former bakery in Kensington, Md., where a machine he built produces 1,200 tea pods an hour. After they finish, the family heads to a burger joint for dinner.
Savage hatched the idea for a business when he spotted a newspaper story a couple of years ago that said the K-Cup patent was expiring, which would open it up for third-party use.
It came at the perfect time. His mother had given him a Keurig machine a few weeks earlier, and he wanted to explore organic or natural beverage applications.
“I became struck by the limited options and selection for K-Cup flavors,” he said.
He went online to find some snap lid cups and filters that would allow him to build some prototype K-Cup pods.
It was early 2013, and he was still employed at Northrop, where he worked on commercial and government satellite programs.
He played around with tea flavors, mixing and matching organic ingredients at the kitchens in his Occoquan townhouse and at his parents’ home in Ashburn. He wanted organic ingredients. When he ate and drank organic, he felt better.
“I wanted to test it out to see if it would sell,” he said.
By May 2013, he had his first four flavors: English breakfast, Earl Grey, spiced chai and green tea, testing the recipes as he went. He added honey to enhance the flavor.
Nearly broke, Savage launched a Kickstarter campaign to raise money. For every $17, donors received a pledge of a box of 20 pods. He built his own campaign page. Over one weekend, he used Adobe software to create a 90-second video to explain his project. The 30-day campaign netted just $7,000, but it was enough to help him get launched.
“It gave me validation because I got over 180 people to pledge without even advertising,” he said.
He went online again, finding a graphic artist in Texas who designed a True Honey Tea logo for his pods and boxes at a cost of $250. He incorporated True Honey Teas LLC that June.
Instead of spending a pile of money building a packing machine that inserts the tea leaves into the pods, Savage used his electrical chops to build his own.
He jumped on his 3-D computer system, Solidworks, to create the plans for his pod manufacturing machine. He found parts on the Web site of McMaster-Carr, an industrial supply company. He ordered aluminum, food-grade plastic, hex bolts, acrylic, motors, micro-controllers, mini-computers.
The stainless steel and plastic machine, which is about the size of a small refrigerator and weighs around 80 pounds, was built in his parents basement and finished by the end of the summer of 2013.
“I probably saved $100,000 building it myself,” he said.
Just before Christmas of 2013, he began mailing out 15,000 pods of the four initial flavors to the 202 donors and friends and family members who had helped him fund the company.
To date, Savage has spent $50,000 on his company, including emptying a meager 401k, maxing out credit cards and taking out a home-equity loan.
By last March, he felt comfortable enough to quit his job at Northrop and devote himself to Honey Teas full time.
There were still problems getting launched. Looking back, Savage said he wasted too much time trying to get his products into bricks-and-mortar chains and markets, although he did break into Whole Foods last August.
“Online is the way to go,” he said. “There is less overhead and more sales.”
“We have sold 5,000 units so far, and are selling 30 to 40 boxes a day, about 20 of which are on Amazon,” he said. “The game plan is to grow and produce quality and natural tea that people can buy in a cartridge.”
He plans to double the number of flavors to 30 this year, including hot chocolate and a hot toddy blend that buyers can mix with alcohol for an adult kick.
He works 16-hour days now, but he does it for himself instead of a giant government contractor.
“This is my full-time gig,” he said. “I get up, start working, ordering stuff, researching new teas, working on business forecasts, business development, flavor experimentation and supply-chain management.”
Nothing like being your own boss.