Two mom-friends and milk tea lovers Olivia Chen and Pauline Ang have capitalized on the early success of their milk tea company by sending samples to the head office in Costco which lead to launching their product with the retail giant in just three and a half months.
“We are still pinching ourselves that our Twrl’s Taiwan-Style Black Milk Tea is now in Southern California Costco!” Olivia says, “We’re starting with 3 locations: Irvine, Monterey Park, and Tustin (2700 Park Avenue).”
They overcame it without calling in a broker to help them. It wasn’t easy at all, however, this exemplifies the importance of hard work and perseverance of the duo to learn every step of the way for their small business to set foot in one of the world’s largest retail stores.
Olivia enthusiastically shares with Asian Hustle Network the timeline of how their plant-based Twrl Milk Tea made it into Costco to help entrepreneurs navigate the highly competitive food and beverage space.
Roadshow Or Small Rotation
We met our buyer at Expo West (Think Super Bowl for the Food & Beverage industry where retailers and manufacturers meet up. Super worth doing if you are in CPG. We even landed our 1st TV interview).
After Expo West, we sent more samples to the office and began negotiations for placement. We were offered two ways of being at Costco:
- 4 days of selling on consignment. We could control costs by using our own people and decide the volume of product we wanted to bring in.
- Typically, this is how small brands enter Costco. If it does well, you are offered a rotation. If you don’t do well, then it’s really hard to get into the regular set.
- We started with a number of stores and the item is part of the regular set.
- This is harder to secure because Costco is paying for the inventory and the buyer has to believe in your product.
In both situations, it is critical that Twrl Milk Tea sells well and ideally sells out. Why is this important?
It proves to the Costco Buyer that there is a market for our better-for-you plant-based milk teas. More importantly, companies owned by Asian American small business owners like ours are proven to be great partners worth investing time in and onboarding.
Reasons For Opting for Small Rotation
After a few weeks of due diligence on our end, we decided to go with a small rotation. Our reasons were simple:
- Our manufacturer could produce the volumes needed and in the time we needed. Not always the case in this crazy supply chain. We are made in the USA so it makes a huge difference in our speed for delivery.
- We could handle the financial obligations to fund the inventory. It’s a lot of money upfront so it’s not a light decision for a smaller company like ours. And, there is still a chance you can be sitting on inventory if it does not sell through.
- We are committed to Costco and wanted to be part of the regular set and did not want to take the chance that with Roadshow which is only 4 days could be a bust due to so many variables that we may not be able to control.
- We love Costco ourselves and shop there regularly so we saw our consumers there! Did you know the typical Costco shopper is 35-44 years old, an Asian female making $125,000 and the average trip is $114?!
Decisions, Decisions, Decisions
What flavor to sell?
Out of our 3 flavors, we selected Taiwan-Style Black Milk Tea to launch because it’s one of our best sellers and our Taiwan-Style Black Milk Tea flavor is really unique. Our single-origin loose-leaf black tea is a one-of-a-kind varietal, sourced from a small multi-generational family farm on a misty slope, fed by sweet mountain spring water.
Our tea flavor, aroma, and health benefits are un-parallel to anything on the market. We use pea milk and lightly sweetened our teas with organic agave so our tea flavors really come through. Only 45 calories & 6g of sugar per can.
What would the packaging look like?
Packaging design and sourcing begin for Costco. Luckily for us, Pauline Ang is a seasoned graphic design guru (with 15+ years in the food and beverage packaging for Fortune 500 companies) and designs all our packaging in-house so we could save costs and time here!
How to onboard?
Mountains of paperwork for our two-person team begin. We didn’t use a broker and did everything ourselves. Yes, a broker would have been so incredibly helpful to answer all the questions that we didn’t know the answers to and definitely would have saved us some headaches.
- Don’t be afraid to chase the account you want to be in. Don’t be shy about sharing your vision of where you see the company. Special thanks to Ryan Sung of Honolulu Cookie Company and Vincent Kitirattragarn of Dang Foods for talking to us about their journey with Costco and encouraging us to go for it.
- It can be done without a broker but not without headaches and some huge learning curves and we did make some mistakes along the way.
- Have an advocate. We have been super lucky that our buyer has been so incredible to work with and it’s important to have such an advocate in the company. Cannot over-emphasize this enough!
- Your team matters. Grateful to share this journey with Pauline Ang who is such an amazing friend and business partner. We are two moms that love Milk Tea and simply wanted to make milk tea —a quintessential Asian drink that we love—even better.
Connect with Olivia and Pauline
Your support would mean the world to our small business and the small family farms that use sustainable practices for a tea that’s better for you, and better for the planet. Follow our journey: Instagram, Facebook, TikTok, Twitter