Lazy Bear Tea Fusing Health, Taste & Social ImpactBy Jules Schwerin
Lazy Bear Tea Fuses Health, Taste & Impact
Most people have never heard of cascara, but startup Lazy Bear Tea is all about it.
A Spanish word meaning “husk” or “peel,” cascara refers to the fruit surrounding the coffee bean we all know and love; unbeknownst to most, coffee beans are actually the seeds of the coffee fruit. When the coffee bean is harvested, the cascara is shucked and often discarded as waste — contributing to as much as 75 percent of the water pollution associated with harvesting coffee. Each acre of harvested coffee crop produces about a ton of coffee fruit which doesn’t currently have a mass market use case.
Lazy Bear Traces Its Roots to Colombian Coffee Country
One of Lazy Bear’s co-founders is all too familiar with this problem. Daniela Uribe grew up in Pereira, where her family had a small coffee farm in the heart of Colombian coffee country. She recalled seeing the mounds of cascara piling up as a child:
“There was just so much cascara discarded during the coffee harvest – it actually looked like a small mountain. And it usually just sat there piling up on the farm because no one really knew what to do with it and it was very expensive to truck away.”
Daniela Uribe, Co-Founder and CEO of Lazy Bear Tea
In 2016, Uribe’s fiancé Drew Fink (Harvard Business School ’18) traveled with her to the family coffee farm. Fink, who has been involved in food sustainability initiatives for most of his career and has invested in a number of agriculture-based startups, was excited to learn more about the farm. But it was a one of Uribe’s family members that accidentally introduced the couple to cascara tea.
The two loved the taste and scrambled to get their hands on more cascara and a recipe to bring home. They couldn’t believe how much they liked it and thought if they could bring the product to a mass market, a real dent would be made in both the pollutive effects on the water supply and the economies of small farming communities. However, they resigned to the fact that consumer education is expensive plus bringing a relatively unknown product to market is risky, and tabled the idea.
Development by Leading Coffee Brands Helped Spark the Company’s Development
A few months later in 2017, Fink noticed that Starbucks’ first new product launch of the year was a cascara-based drink. The company also appeared to be spending a significant amount on consumer education. Then, Blue Bottle Coffee launched a cascara fizz. It was at that moment that the lightbulb went off in Uribe’s head.
“I was stuck on the taste of the cascara tea, but I didn’t see anyone doing anything with it. A few months later Starbucks launched a cascara drink and we knew if they were going to spend to millions to educate consumers on what it is, there would be an opportunity to build on that,” said Uribe.
They saw the Starbucks announcement as the beginning of a market trend and decided to start prototyping. Uribe and Fink enlisted the help of Erik Ornitz (Harvard Business School ’18), who had experience with food-based startups and was also an early stage investor, and launched Lazy Bear Tea.
Named for the sloths found everywhere in Colombia’s coffee triangle, Lazy Bear is a rough translation of the Spanish term for sloth, “oso perezoso.” The company’s mission is simple: make amazing tasting tea that has the added benefits of being healthy for consumers while providing social and environmental impact for producers.
What Started In a Kitchen Gradually Expanded to Commercial Space and Harvard’s Rock Accelerator
Initially, the trio started brewing in Fink and Uribe’s kitchen, experimenting with flavors before finally landing on the three that exist today: lemon agave, mint, and natural. The team was expecting a polite response from friends and classmates, but the seemingly genuine demand they encountered gave them even more reason to keep pushing the company forward.
“I was brewing whole batches to bring to work and always ran out. People in my office were even asking to take some home,” said Uribe.
Realizing they were onto something, the team applied and was accepted into Harvard’s Rock Accelerator. Lazy Bear subsequently moved production into a shared commercial kitchen space outside of Boston, prepared to ramp up for the Boston summer, when cold pre-packaged beverage sales traditionally peak. But the team ran into their first major hurdle then: getting FDA nutritional testing and recipe approval finished in time for the summer rush. Although they were able to draw upon the expertise of other food businesses the trio was connected with, Lazy Bear’s first store placement wasn’t until September 2017. The team was disappointed to miss the “busy season” but soon realized the concoction resonated with consumers.
“Our sell-through rate at the time was probably in the top third of comparable beverages — in December! I was so shocked. Iced tea is really popular in the summer, but to see this kind of sell-through during a Boston winter is really incredible,” said Uribe.
Shifting Consumer Behavior Is Driving Growth
The team believes they can capitalize on a shift in younger consumers’ behavior, particularly Generation Z, which the team believes tends to be more mindful of sugar consumption. A recent survey concluded that about a third of Gen Z’ers are ditching soda in favor of healthier low sugar alternatives like tea — which a fifth of Gen Z’ers planning to drink more of.
I had the chance to stop by a Cambridge store and try Lazy Bear. I shelled out $2.99 for a bottle, which seemed fairly middle-of-the-road compared to other beverages on the shelf. The first thing I noticed was the colorful label, and sure enough, when I checked the nutrition information there was no added sugar. Despite having no added sugar the tea still tasted sweet and balanced with a slight refreshing hibiscus aftertaste and none of the bitterness of coffee.
The team hopes Lazy Bear, with anywhere from 0-3g of added sugar, almost as much caffeine as coffee, and a social mission is poised to drive a niche tea to a mainstream staple.
Retail Is Tough but the Company Is Gaining Retail Traction Quickly
They’re off to a modest start, with a footprint of 30 stores and a newly inked deal with a large New England based distributor that supplies 1,500 stores. However, scaling the business poses its own challenges. Retail shelf space is notoriously competitive and the team needs to take a measured approach to landing and retaining it. Lazy Bear’s goal is to be in 100 stores by May and potentially partner with a larger industry partner to attack the growing $4B+ ready-to-drink beverage market.