By Karen Knapstein, contributor of Underground Group
⏰ 7-minute read
Owl’s Brew founders Jennie Ripps and Maria Littlefield were interested in healthier cocktails when they started mixing tea with liquor in 2013.
They’ve gone from bootstrapping entrepreneurs to CEO and COO of a 12-person company whose tea-based mixer and boozy teas are available in Whole Foods, Trader Joe’s and Publix.
No longer a startup but not quite a giant, the company is challenged to keep up with inventory demand.
“With most cocktails, you can drink something with club soda that doesn’t have a ton of flavor. Or, you can drink something with juice that was really full of sugar and could contribute to a hangover,” explained Owl’s Brew co-founder Jennie Ripps. “I really thought … there was a better way to drink.”
Ripps’ revelation led her to start Owl’s Brew in 2013. The company creates and sells tea-based mixers and boozy teas, which Ripps said are an antidote to the fake flavors and added sugar prevalent in the liquor industry.
It turns out the company was ahead of the curve on the low-alcohol beverage trend: A recent International Wine and Spirits Record report shows 52% of adults who drink alcohol are interested in drinking a little less of it.
The health benefits of drinking less sugary, all-natural cocktails have always been the main driver of Owl’s Brew products. The business has grown to comprise two product lines available in 4,000 stores around the country. Yet the company hit some roadblocks along the way, including a struggle with keeping products available.
Owl's Brew comprises two product lines: "boozy tea" in a can (below) and tea-infused cocktail mixer.
Beginning to brew
Ripps first started experimenting with tea in 2011 for its health benefits.
“I had a family member who was sick,” shared Ripps, who at the time worked at Talent Resources, a celebrity marketing agency. “I started trying to put together tea that had optimal health benefits to see if that could be helpful, but in the process of mixing green tea with rooibos or lemon verbena with peppermint or whatever, I realized … when you mix tea you could also get all of these amazing flavor profiles.”
“I had a family member who was sick. I started trying to put together tea that had optimal health benefits to see if that could be helpful."
By the end of 2011, she had turned her tea experiments into Brew Lab Tea (which would become a vertical in the company she’d soon build). She became certified as a tea sommelier and started selling her tea blends by the pound in and around Los Angeles and New York.
“It [becoming a tea sommelier] really gave me the language [that I needed] to speak to tea,” said Ripps, who was also hosting tea cocktail parties during that time.
Not long after, Ripps was being asked to mix up tea cocktails at events around the country, including Art Basel in Miami and The Super Bowl. She was soon creating custom tea programs and cocktail lists for restaurants such as the James Hotel, Scarpetta, Sweetgreen and Dig Inn.
She knew she had a business.
Making blends accessible to all
Ripps was ready to make her tea blends accessible to consumers, not just to restaurants. She knew she needed help and looked to Maria Littlefield, whom she hired at Talent Resources.
“Maria had just graduated from college, and I had just been given permission to hire someone,” said Ripps, who enlisted Littlefield to help her with her side business. “She was the first person I interviewed [at Talent Resources] and the last. I hired her on the spot.”
The duo left Talent Resources in 2012 and 2013, respectively, and began raising seed money to make Owl’s Brew’s first consumer-facing product: Owl’s Brew Mixer, a tea-infused cocktail mixer.
Owl's Brew's first product was a tea-infused cocktail mixer, which it continues vending today.
“Basically, that was the period where we made tea for free everywhere, or our R&D period, depending on how you look at it,” said Ripps, who was experimenting with an easy-to-pour, tea-based mixer anyone could add to any liquor or beer. “We spent a year proving that people would drink tea-based cocktails.”
"That was the period where we made tea for free everywhere ... We spent a year proving that people would drink tea-based cocktails.”
The mixer hit store shelves in 2013. It was made of tea, botanicals and just a hint of juice and was mildly sweetened with agave instead of refined sugar.
From there, Ripps and Littefield went back on the road.
"Half of the distribution that we have is really based on being at trade shows and showcasing there and having buyers get interested in us, and the other half was really about … stalking people,” Ripps joked.
The duo worked hard to set up meetings with buyers and give presentations to sales teams wherever they could. Two years later, the mixer was available in 1,200 stores, including Whole Foods Market, BevMo and Total Wine & More locations across the country. An Owl’s Brew recipe book, published with health and wellness publisher Rodale, was also released that year.
Continuing to steep a company
“Growth has been a challenge,” shared Ripps, referencing reconciling the supply and demand of Owl’s Brew product.
For example, the company launched in 2,000 additional stores, including Publix supermarkets, in spring 2019.
“We have a distributor rep who let us know the store launch amount,” Ripps said, but something was miscommunicated. The ensuing “game of telephone” meant that what Ripps and Littlefield thought was 40 Publix stores was actually 800 stores.
“It wiped out our inventory, because we hadn’t planned for it … it sounds like a good problem to have,” Ripps continued. “And, it is. But it’s also a problem; we’ve had a couple of out-of-stocks, and I keep thinking about the lost revenue from those.”
Managing cash flow while growing can also be a challenge.
“You’re using a lot of cash to launch in more markets,” said Ripps. “That cash comes back later, but there’s a lot of up-front investment where managing cash flow is one piece of it [growth]. Then, managing inventory relative to growth is another, which can be a big challenge.”
Now, Owl’s Brew is considering various financing options including opening a line of credit, a technique called invoice factoring, plain old business credit cards and raising equity capital to account for cash ebb and flow so it’ll be covered.
In addition to navigating business challenges, Ripps and Littlefield host a podcast called "Lemons & Lemonade."
Additionally, Owl’s Brew’s position in the CPG industry presents challenges. Ripps cites big brands that have swayed the perception of how products should be manufactured.
“The history of the food industry is really big brands, so you have Pepsi and Coca-Cola who work with flavor houses [a company that creates and sells flavoring compounds] to develop flavors,” she said, adding that this can present an ethical dilemma of sorts to burgeoning small businesses.
Ripps said that when they first started working with her tea-flavor samples, venture capitalists and industry folks would say that Owl’s Brew needed to find a flavor house to recreate the taste.
“People who know more than us were telling us to go to this flavor house because it’s cheaper and maybe more efficient [than actually brewing the tea],” she said.
That wasn’t a fit for Owl’s Brew because of its commitment to natural ingredients.
“You don't actually get the good parts of the tea with a flavor house,” said Ripps, who eventually found a Connecticut-based co-manufacturer to help the company produce its tea mixer its way.
“The history of the food industry is really big brands, so you have Pepsi and Coca-Cola who work with flavor houses ... [But] you don't actually get the good parts of the tea with a flavor house."
Ripps also noted that getting funding presented additional obstacles, including navigating a male-dominated industry.
“Raising money as a woman seems to be a little bit different that raising money as a man,” she said. “On the one hand, there’s a lot of support and energy for female founders out there, and there’s a lot of groups that are trying to increase diversity. At the same time, women don’t get funded as often as men or in as large amounts as men.”
As of 2018, female-owned businesses represent 40% of the companies in the U.S., according to the Women’s Business Enterprise National Council. Yet they only get 2% of all venture funding. The Harvard Business Review found that women are more often asked “potential loss” questions in VC meetings, whereas men are asked more “promotion-oriented” questions about company advancement.
“Navigating funding has been funny,” said Ripps. “I’ve had 5-10 presentations to the sales teams at our distributors this year, alone. And any time I present, I present to 50-100 men.”
“Any time I present [to sales teams], I present to 50-100 men.”
Ripps said the keys have been continued persistence and resilience and powering through with a partner.
“... Having a good partner has meant that I trust myself, and I trust Maria so that gives us a stronger foundation. A lot of it is just believing that the first ‘no’ is just a bend in the road and not the end of the road,” she added.
💡 This part of the story reminds us of Ann Winblad, a legendary VC who heard "no" 133 times before finally landing a partner to help her launch a firm. Listen to her story on the "Grow Wire Podcast."
Reading the tea leaves
Today, Owl’s Brew has 12 employees and is growing its sales force. The company, whose Brew Lab vertical was acquired by the Republic of Tea in early 2019, sells five mixers as well as three boozy teas, spiked, sparkling tea beverages which launched in 2019.
“Everything we’ve done is just an iteration of the idea that you can take organic plants and botanicals and make interesting, healthy flavors with good ingredients,” said Ripps.
Owl's Brew plans to continue iterating its tea-based beverages.
Consumers want better options, she added.
“People don’t want to put crap into their body just to mask the taste of alcohol, and we’re about making that accessible nationally and, hopefully soon, internationally.”
Owl Brew’s mixer sales are up 175% year-over-year. The newly-launched boozy tea’s sales are increasing 33% percent each month.
Owl’s Brew wouldn't be a trendy cocktail company without looking to the future. Currently, it’s going back to its Owl’s Brew Labs roots a bit. The team is always working on new flavors and ideas to stay abreast of the marketplace.
“I work closely with bartenders, beverage directors and mixologists [at their business locations],” said Ripp. “A lot of the off-premise work is informed by the on-premise work, because that’s where trends start.”
Of course, she caveated, “the big picture is really about helping Americans trying to drink more plants and botanicals and less sugar and stuff that isn’t real,” one cocktail at a time.