As Sarah Nichols prepared to graduate from Macalester College last year, she had a decision to make: should she take one of the jobs that was offered to her, or the one she had just created for herself?
“It was definitely weird to think, ‘I’m 22, broke and staring down the barrel of a bunch of student loans. Let’s start a business,'” Nichols said.
Nichols has been working to build her beverage company, RSVTea, from the ground up since graduating in 2016. Since then, the first-time entrepreneur has gone through Macalester’s MacStartups program, gener8tor’s gBeta accelerator for early-stage companies, and was a semifinalist in the food/agriculture/beverage division of this year’s Minnesota Cup.
RSVTea also recently raised $50,000 in seed funding, and plans to close on another $50,000 before the end of the year, according to Nichols.
“I grew up on a farm in Southern Missouri where we always had tea,” she said. “It’s a good natural source of caffeine, but it’s never quite strong enough. So I thought, ‘Why don’t we make it stronger and add bubbles?'”
Nichols brewed up the first small batch of the fizzy energy tea in her dorm. The recipe was pretty straightforward. It consisted of a strong tea concentrate and soda water. She presented this during MacStartups, where she concluded her demo day pitch by throwing a handful of confetti in the air. Through RSVTea, Nichols said that she hopes to “revive the power of celebration.”
“It’s pick-me-up with a purpose,” she explained. “Celebration is healthy and you should be toasting yourself every day.”
The mission behind RSVTea came before the company even had a name. Nichols imagines RSVPs as being exclusive, meaning some people are often left out of parties and celebrations. Nichols wanted to build a brand with inclusivity as its main pillar.
“My older brother Taylor really inspired that notion. He’s autistic and nonverbal, and I grew up seeing him excluded from a lot of parties,” Nichols said. “But I saw the joy that he felt when he was included in something. Whenever he was happiest, that’s when he was healthiest.”
The path to success for any startup is generally long and challenging. But as Nichols discovered, the beverage industry has its own unique set of challenges.
Canning and distribution is expensive. Originally, the best deal Nichols found was with a factory asking for around $300,000 to produce 16,000 cans of each of RSVTea’s three flavors. Another challenge is patents, which are difficult to obtain for beverage companies like RSVTea. This puts extra pressure on these startups to be first to market.
The startup recently landed a distribution contract with Bernick’s, a Minnesota wholesale distributor of Pepsi products, and plans to roll out its first official round of teas this month. To do so, RSVTea is partnering with local coffee company Blackeye Roasting on a canning facility. Blackeye owns the 30,000 square-foot factory in St. Paul, and RSVTea financed the $100,000 canning line, according to Nichols.
RSVTea produced a test batch of beverages at a local brewery earlier this year. Over the course of a week, Nichols and her small team produced 10,000 cans, the first of which came off the line on her birthday.
“It was an incredible feeling,” Nichols said. “I was running around the factory like a kid in a candy store. The ramen diet is real, but it’s worth it.”