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From taste to profit: Bondi Chai drinks to success

Bondi Chai Founders Martin Buggy and Melissa Edyvean

Bondi Chai Founders Martin Buggy and Melissa Edyvean

After operating their own PR/Marketing consulting firm and experiencing employment in sectors like journalism, graphic design, and print compositing, Martin Buggy and Melissa Edyvean decided to focus on something they had encountered in early 2000 while on a U.S. holiday: chai latte.

“We assumed it would be popular in Australia because we knew lots of people who felt as ‘left out’ as we did in the coffee-centric café world,” Martin tells Dynamic Business.

“To our surprise, we couldn’t find chai latte anywhere when we returned to Australia and, doing a little more research, we found that chai latte was actually already booming in the US. Its arrival in Australia was inevitable and we thought we’d play some small part by introducing it to a food distributor we knew. Our PR consultancy kept us very happy, but we had always felt the need to escape the ‘hours for dollars’ scenario and had been looking for some way to replace our income instead of selling our time/expertise.”

Martin says 2004 delivered the “kick in the backside” they needed. The chai latte brand they had introduced was sold and withdrawn from its Oceania market, leaving them with the options of leaving the chai business behind or using their consultancy standing as a bailout alternative if this new endeavour fails. The latter called harder. Bondi Chai came to life.

“While still running our PR consultancy, we spent almost a full year devising our ‘perfect’ recipes, creating and registering the ‘perfect’ name/logo/brand profile/image and packaging formats,” Martin says.

Bondi Chai co-founder Melissa Edyvean

Bondi Chai co-founder Melissa Edyvean

“We decided to contract out all the manufacturing, packing, storage and freight/delivery functions, allowing us to continue working from our home office and focus almost entirely on the critically important function of selling the product – an area where we knew we could be most effective.”

Their aim was to launch the product into the food service industry, Martin explains, but getting to every café was much too difficult. A carefully thought out pricing structure was developed, one allowing a margin for distributors and wholesalers while concentrating on recruiting them.

The ‘outsource’ business model gave them the opportunity to manufacture to demand, hire experts, ramp up/slow down production at short notice, keep business moving from any location, and keep employee expenditure to a minimum.

“For the first 8 years of our business Melissa and I grew and managed our business entirely by ourselves. Today we directly employ two high-performance sales professionals and a part-time office manager,” Martin says.

“We financed our business “launch” with a small line-of-credit established against an investment property portfolio and have financed growth ever since entirely from revenue. We have no business loans.”

When it comes to marketing, Martin says Bondi Chai’s central strategy revolved around consumer engagement. They offered free samples at every opportunity, looking for any chance to offer their product to consumers and educate them on all things chai latte.

“In the last decade we estimate that we have given away more than 1.5 million samples of our product. Growing general awareness of chai latte, aided by the marketing power of companies such as Nestle and Unilever, has encouraged non-coffee drinkers to seek out their ‘holy grail’ beverage, trialling different brands until they find one that best suits their tastes.”

After establishing a solid cash-flow from 8 years of injecting their product into the food service industry, it was time for the next part of the plan: brand recognition and equity.

“Supermarket shelf space was needed not only for the direct exposure it provides, but also to give consumers easy access to our product as they learned more about it from our intended PR/marketing brand-building efforts,” Martin explains. “As well, our food service business had started to create retail demand in its own right.”

Bondi Chai has established itself as one of Australia’s most popular latte brands, with a huge following and a plethora of awards to provide confidence in the company’s direction. Last year Bondi Chai was named the NSW Micro Business of The Year 2014 in the Telstra Australian Business Awards and was this year named the Asia Pacific Food and Beverage Company of The Year in the 2015 International Stevie Awards, known to many as the “business Oscars”.

“From a commercial perspective, the Stevie couldn’t have come at a more opportune time,” Martin says.

“With our two sales managers doing great things in our domestic markets we are free to focus on the next ‘frontier’ for our business – export markets, and especially those in Asia. This award will give us great exposure in precisely the right areas and can only add impetus to our current efforts to introduce Bondi Chai into China, Japan, Korea, Singapore, Taiwan and Nepal. We already have agents and/or distributors in each of those countries and will, in fact, be taking our agent in Shanghai up on stage with us to receive our award at the ceremony in Shanghai on June 5.”

The plan now is to focus on expanding the company’s domestic market, while channelling more resources into growing export markets. Of course, while ensuring a solid and profitable forecast is a round-the-clock priority, sometimes it’s good to take a second to look around (and back) at those that have pushed the business to where it stands.

“We have our 10th birthday later this year,” Martin says, taking a second to ponder the journey thus far.

“We’ll be taking a few months between July and October to offer rewards and incentives to the many thousands of people – consumers, café owners/operators and distributors – who have so loyally supported Bondi Chai and made it what it is today.”