15 YEARS OF ADVENTURES IN TEA Matt Thomas CEO (503) 367-8921 matt@townshendstea.com
Today’s Conversation • Company history • Funding growth with debt & equity • Managing culture through growth • Bumps in the road • What’s gone right so far • Regional to national • Strategic leadership
Current State of the Company • 9 Townshend’s Teahouses • Brew Dr. Kombucha producing about 600,000 bottles per week, distributed throughout the US and Canada • Townshend’s Distillery spirits products distributed in 4 states • 325 employees
Company History – Portland 2003 / 2006 Startup money: $45,000 invested by friends and family
Company History – Bend, Oregon 2007 Startup money: $35,000 in personal credit card debt
Company History – Kombucha 2008 Startup money: $3,000 in personal credit card debt
Company History – Basement Growth KOMBUCHA PRODUCTION 2009: 60,000 bottles (6,500 gallons)
Company History – Whole Foods Loan October 2009 Whole Foods Local Producer Loan of $48,000 to fund early kombucha expansion
Company History – SE PDX Brewery
Company History – SE PDX Brewery
Company History – SE PDX Brewery KOMBUCHA PRODUCTION 2010: 175,000 bottles (20,000 gallons) 2011: 300,000 bottles (33,000 gallons) 2012: 600,000 bottles (65,000 gallons) 2013: 900,000 bottles (99,000 gallons)
Company History – Teahouse Growth Teahouses Opened 2006: Alberta Street 2007: Bend 2012: Division Street 2013: Eugene
Company History – 2013 $2M SBA Loan KOMBUCHA PRODUCTION 2014: 1,700,000 bottles (186,000 gal) 2015: 2,800,000 bottles (306,000 gal) DISTILLERY FOUNDED
Company History – Teahouse Growth Teahouses Opened 2015: Bozeman, MT 2015: Mississippi Ave 2016: Montavilla 2016: UO EMU Tea Bar 2017: Park City, UT
Company History – 50,000 sq ft Brewery Startup money: $7M bank loan $1M equity raise Leased 6/2015 Opened 5/2016
Company History – 50,000 sq ft Brewery KOMBUCHA PRODUCTION 2016: 5,200,000 bottles (570,000 gallons) 2017: 16,000,000 bottles (1,750,000 gallons) 2018: 25,000,000 bottles (2,750,000 gallons)
2008: 360 gallons % Increase Brew Dr. Volume by Year 2009: 6,500 gallons 1700% 2010: 20,000 gallons 207% 2011: 33,000 gallons 65% 2012: 65,000 gallons 97% 2013: 99,000 gallons 52% 2014: 186,000 gallons 88% 2015: 306,000 gallons 65% 2016: 570,000 gallons 86% 2017: 1,750,000 gallons 207% 2018: 2,750,000 gallons 57% 2019 Plan: 3,800,000 gallons 38%
Jobs I’ve Had Along the Way • Shopkeeper • Brewer • Bookkeeper • Bottler • Handyman • Production Manager • Graphic Designer • Food Safety Specialist • Copywriter • Janitor • Customer Service Specialist • Delivery Driver • Inventory Controller • VP Sales • HR Manager • VP Marketing • IT Department • CEO
Growing With Debt & Equity EQUITY DEBT • 2008 $38,000 • 2003 $45,000 • 2010 $48,000 • 2015 $1 million • 2013 $2 million • 2018 $12.5 million • 2015 $7 million • 2017 $3 million
2015 – A Strong First Board of Directors Private equity investment is a great way to force professionalization • First board built in 2015 – Have made similar decisions – Skills you don’t have at scale (finance, HR, distribution, sales, marketing, etc.) • Enthusiasm for the company • Analytical yet action-oriented • Help with the pace of evolving the company • Prepare for future investment
Keeping Culture Through Growth Hiring experienced professionals to take positions above long-term legacy employees How to keep the OG crew invested in a new era of professionalism and teamwork • What is fair to that person, as well as their new manager Build a company that attracts good people It’s okay if it doesn’t work out perfectly
Building the Company of My Dreams Authentic, responsible, transparent, progressive, innovative, fun
Bumps In the Road • 2003 - 2006 partnership failure – move faster, work harder on my own • 2010 alcohol recall – most important moment for the company. Defined the mission • 2011 over-delegation – wake up call to be involved at all levels
What Went Right and Why • Founded the company based on an opportunity that I believed in to the core – Tea is timeless. It will provide opportunity – Belief and LLC structure got me through the very lean early years • Chose a great opportunity and committed to it – More teahouses? Grocery tea product? Bubble tea outlets? Wholesale/Amazon tea business? ….nope. Kombucha. • Made the most of being early to the party – Being an early player meant I got to grow into easy openings • Long-term vision. Short-term execution – Took risks year to year that were manageable – Stayed flexible and focused while heading toward the big goal
Regional Brand To National Brand • Leveraging regional relationships to national distribution – Whole Foods local producer loan – Trader Joe’s – DSD model success • Profit Margin to afford difficult out-of-region activity – It’s all so expensive! • Win at home every, single, year. • 80/20 rule applies. Win at the 20% • Strategic market strategy
Strategic Leadership Lessons • Culture really matters every step of the way – Transformational leadership • Create restaurant owners, not waiters • Entrepreneurism is an outlet for creativity
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