Milwaukee’s heritage of beer, sausage and cheese do not exactly convey images of healthy lifestyles or gourmet foods.
However, Rishi Tea, a growing company that specializes in gourmet and organic teas, is part of the new Milwaukee.
Rishi Tea is based in the former Louis Allis plant at 427 E. Stewart St., in Milwaukee’s Bay View neighborhood. Because of an increased interest by American consumers in gourmet and organic ingredients, Rishi Tea is steeping in success.
The company does not grow its tea. Instead, it partners with growers and producers around the globe, and they send their tea leaves to Rishi.
Most of Rishi’s sales are wholesale to specialty stores and markets and restaurants. The company also has its own Internet store, where customers can order products directly.
Rishi’s sales have grown by double and sometimes triple digits in every year since the company was founded in 1997. And they’ve grown to the point that Rishi is nearly doubling the size of its headquarters and warehouse space in the former Louis Allis complex from about 15,000 to 28,000 square feet.
Last week, Rishi’s sales, marketing and graphic design departments moved to a new 4,500-square-foot office space inside the Louis Allis building. Before the move, all of the company’s sales, design, accounting and other office personnel worked together in a one-room area, said Benjamin Harrison, managing director.
“Our space (was) like a circus,” he said. “It (was) like a pinball machine.”
When completed, the new office area will also have a dedicated room for quality control and tasting new flavors before they’re ready to be introduced, Harrison said. Although Rishi has a similar room now, the expanded office space will greatly enhance its capacity to experiment and better monitor quality.
“We’re at the point now where we have so much quality control and volume of product moving through that quality control and evaluation is constantly necessary,” Harrison said. “That room is going to make it possible.”
The expanded office area will also have a separate room for graphic design and some space where Rishi’s wholesale customers in the food industry and retail stores can sample the products.
Rishi’s main expansion will be on the first floor of the Louis Allis building, where Industrial Properties LLC, the building’s owner, is preparing more than 10,000 square feet of warehouse space. Once the renovations are complete, the storage area will be climate-controlled, averaging between 60 and 65 degrees.
Those temperatures are needed to prevent degradation of Rishi’s teas, which are sold to premium gourmet markets, said Aaron Kapp, the company’s operations director. The warehouse expansion is expected to be complete before the end of the year.
“We need to keep the temperature below 65 degrees because a lot of the botanicals are only available once a year,” Kapp said. “We need to store them at the ideal temperature and environment through 12 months. There’s always degradation over time. We can control it by regulating them in a cool and dry temperature.”
The new storage area also will enable Rishi’s employees to keep teas, herbs and other materials more organized, Kapp said. The new warehouse has a 14-foot high ceiling, while the existing space is only about 10 feet high.
A shelving system will be installed in the new warehouse, giving bulk teas and herbs permanent homes.
“The additional space and racking system allows further idealistic control,” Kapp said. “It gives us room to segregate our products. Upstairs, that’s a constant challenge.”
Once the warehouse area is complete, the current storage space will be converted into an expanded blending and packaging area, Kapp said.
“Now the inventory is moving around the space (where) we’re trying to develop the product,” Harrison said.
More space is needed because Rishi has more inventory and more workers are packaging and selling the product.
When the company began, Joshua Kaiser, Rishi’s founder, president, head of product development and tea expert, was the only employee. Kaiser was not available to comment for this story because he is traveling through tea-producing areas of the world, including China, Japan, Taiwan, India and Sri Lanka.
Today, Rishi Tea has 20 full-time employees – 12 in its office and eight in production. Rishi has an additional 10 part-time and seasonal workers.
The company recently hired two new full-time workers and will hire another before the end of November, Harrison said.
“We have a track record of high double-digit growth, close to triple-digit in our first five years,” Harrison said.
Rishi anticipates 25 to 40 percent revenue growth this year. How the company’s year will end up is difficult to predict because Rishi is typically busiest during the holiday season.
“We’ve got the last two months (of the year) to go,” Harrison said. “That’s where it will be decided.”
Rishi is expecting big growth in 2007 because of the company’s expansion into larger quarters and new products introduced in the second half of this year.
“2007 is shaping up to be really solid,” Kapp said.
“It could be a blowout year,” Harrison said.
Rishi’s growth expectations are tied to the sales performance of some of its new teas that have been introduced this year.
In just a few days, Rishi’s newest tea offering – a Japanese tea called O-Cha – will be on store shelves, Harrison said. The tea might not be there for long, because it sold out before it was even officially launched.
In September, Rishi introduced a line of powdered tea sticks. Packaged in single-serving tubes, the sticks are filled with pure tea leaves, which have been stone-ground into a fine powder. That powder can be dissolved into water, making a naturally iced tea with no artificial flavors or colors, Harrison said.
This summer, Rishi rolled out its only teas packaged in tea bags – designed to be made into iced teas.
Rishi currently has more than 250 products it offers through wholesale sales to grocery and specialty stores, coffee shops and its Internet store. In the next few weeks, Rishi will begin offering a wild rose white tea blend and honeydew melon flavored teas.
Most of Rishi’s sales are wholesale to national specialty stores such as Whole Foods Market, Wild Oats Market, Williams-Sonoma and Wegmans, and to coffee and tea shops. Local specialty stores, coffee and tea shops carrying Rishi products include Stone Creek Coffee, Anodyne, Roshambo Tea House, Sendik’s and Beans and Barley.
Local coffee shops and specialty grocery stores have been a cornerstone for Rishi’s growth, Kapp said. After gaining a foothold with local stores, Kaiser, Kapp and Harrison began expanding to specialty stores and coffee shops around the country.
“Those were our bread and butter in the early days,” Kapp said. “All of our success has been hard-won by everybody in the company.”
Since its foundation, Rishi has been dedicated to finding the best quality, freshest loose leaf teas, Kapp said. Organic teas have become a priority, largely because they don’t have any pesticides or preservatives. Fair-trade teas, which pay farmers and suppliers family-supporting prices, also have become a priority for the company, Kapp said. Fair trade practices also help to ensure continued availability of quality product, Kapp said.
“That kind of sustainability is good for the environment, but people too,” he said. “That’s why Joshua is overseas so much.”
In Rishi’s early years, the company turned to existing suppliers and importers for fair-trade and organic teas – and many of those suppliers told Rishi such teas weren’t available.
“We thought we’d be able to depend on the other brokers to support our vision,” Kapp said. “They turned us into their own competitors because we had to create our own relationships and partnerships with growers and processors. That’s all part of sustainability.”
Kaiser’s travels regularly take him into remote areas of the world, Kapp and Harrison said, where he’s had several near-death experiences, ranging from dirt roads collapsing beneath four-wheel drive vehicles to hiking paths crumbling.
“You have to get into the guts of an area to find out what’s happening,” Kapp said. “It can be really difficult to get back into some of the really remote tea producing areas.”
However, going to those areas is necessary to ensure quality and true sustainability, Harrison said.
“A lot of companies talk about traveling to China, but they’re taking the Disney tour,” Harrison said. “There’s no real understanding of the issues, agricultural process or artisan process.”
Rishi’s teas are produced in the areas where they are grown – either dried, roasted or manipulated through other natural processes. Rishi then blends the raw teas and packages them for shipping.
When Rishi first started selling teas, less than 5 percent of its products were organic, Kapp said. Today, about 95 percent of Rishi’s teas are organically produced.
The company gradually increased its emphasis on organic teas, and its move toward more fair-trade products has also been gradual. Currently, 25 to 30 percent of Rishi’s teas are fair-trade-certified.
The shift to organic and fair-trade products is driven by Rishi’s goals of sustainability and quality.
“We get a lot of customer feedback like, ‘You’ve ruined us for life because we can’t drink anyone else’s tea,’” Kapp said. “I don’t think there really is competition, but ultimately, all (tea producers) are our competition because they’re on the shelves competing for space and dollars.”
Serious tea drinkers eventually find Rishi Tea, he said, because of the company’s commitment to the highest quality.
“All roads lead to Rishi,” Kapp said. “No one else is doing what we’re doing.”
Like drinkers of fine wines, tea drinkers’ palettes take some time to develop.
“Our marketing is tied hand-in-hand with education,” Kapp said. “The more (drinkers) experiment with other branded products and our own, the more they appreciate what we do. This is a lifelong, ongoing pursuit.”
Rishi Tea
Address: 427 E. Stewart St., Milwaukee
Industry: Organic and fair-trade tea.
Leadership: Joshua Kaiser, founder, president, head of product development and tea expert.
Employees: 20 full-time, 10 part-time and seasonal
Revenue growth: 25 to 40 percent for 2006; anticipated 40 to 60 percent in 2007
Web site: www.rishi-tea.com
