Rong Pan and Qin Liu will open their fourth Ku Cha House of Tea location on the 16th Street Mall in Denver next month, ushering in a new phase of growth for the company.
The specialty tea shop, founded in Boulder in 2005, offers 170 different loose leaf teas and herbs for customers to choose from. It moved its shop in Boulder four times, and now also has stores in Cherry Creek and Boulder, and Pan says they will open more locations after the downtown Denver store has stabilized — perhaps even by the end of the year.
The global tea market was valued at nearly $200 billion in 2020 and is expected to rise to more than $318 billion by 2025, according to Statista. Tea is believed to have originated in Chin, with records of its use dating back to the 3rd century AD.
In addition to its wide array of teas, Ku Cha Tea House also sells accessories such as infusers and strainers, tea kettles, tea trays and scoops as well as bronze and ceramic tea sets.
When Colorado Gov. Jared Polis issued a stay-at-home order in March 2020 forcing businesses like the Ku Cha Tea House to shut down, the business started making a line of canned teas and kombuchas it could sell to grocery stores and other retailers.
“We started the project in August last year, and the products were launched in October, which is the worst time of year for iced tea,” Pan said. “We didn’t do much business from October to March, but now that the weather got better, we’ve pushed it to local businesses and grocery stores.
“The new line of products got pushed by the pandemic. Other than online, you can’t have your product reach your customers. Iced teas are the solution we found to reach more customers outside of our own physical stores.”
The canned teas come in four flavors: Jasmine Oolong, Sakura Cherry, Summer Tranquility, a peach and apricot white tea, and Golden Monkey, a classic Chinese black tea. A case of 12 sells for $39 on the Ku Cha website.
The kombuchas come in three flavors: Cherry, Jasmine and Lemon Blossom. A case of 12 sells for $45 on the Ku Cha website.
The teas, which can be found in about 20 retail outlets including cafes, restaurants and grocery stores, are selling well, Pan said. The company is working with a co-packer in Longmont but has run into issues with production capacity, so it’s purchasing canning equipment so it has a backup plan when orders for its products can’t be fulfilled.
“We have one SKU (stock-keeping unit) that’s been out of stock for almost a month,” Pan said.
The pandemic also resulted in supply chain issues for Ku Cha, which means bitter tea. The company had trouble getting many of the teas it sources from China, Japan and India in a timely manner so it started having the products shipped by air rather than ocean freight.
“The cost increased, but we don’t want our teas to be out of stock,” Pan said. International freight on the ocean takes much longer. We feel the air freight is a better solution at the moment.”
Ku Cha Tea House was born out of an MBA project Pan did in 2003 while attending the Leeds School of Business at the University of Colorado Boulder. The class voted on each of the students’ one-page plans, and the top three were developed into full business plans.
Though her plan was shot down and she ended up joining another team, she persevered and started the business anyway.
“We are quite lucky to be in the Boulder community,” Pan said. “We get a lot of support.”
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