Diane Mastrull: Following her heart, and her taste for chai tea

Dawn Lewis starts each day with a robust cup of coffee. Black.

But tea is what has her entrepreneurial juices brewing - and has her projecting at least $1 million in sales within three years for her Main Line company.

How did a native of Seattle - where coffee has long been king - get hooked on the idea of building a Malvern-based business around tea, specifically chai?

Over cups of coffee, naturally.

How one led to another is a venti-sized story.

The beverage business was not the career path Lewis, 53, had originally envisioned. She had majored in fashion design, and in 1995, she and her then-husband had moved East to buy a tailor shop in Ardmore.

When that failed, Lewis sought refuge in the familiar - coffee - and went to work at a Starbucks in King of Prussia. A year later, she was managing one in Wayne. And a year after that, in 1997, she had opened her own coffee shop in the Malvern train station.

The structure had not been used in at least a decade and was "a disastrous building . . . beat up and broken" with rotted ceiling and flooring when Lewis decided to locate her Caffe Craze shop there. Amtrak, the property owner, contributed $10,000 in renovations. Lewis set her business hours to coincide with those of the adjacent SEPTA ticket office to serve morning commuters.

In 1998, she opened a second cafe in Strafford as part of a planned coffee-bar franchise along SEPTA's Paoli/Thorndale Regional Rail line. In 1999, an electrical fire destroyed the interior of that station, including Lewis' coffee shop. She refocused on just the Malvern cafe, where customers had started requesting what was a largely unfamiliar beverage to U.S. sippers - chai.

A soothing blend of tea, milk, sweeteners, and spices, chai has been around for centuries in India. In the United States, "a majority of Americans have heard of it but don't know what it is," said Brian Keating, founder and president of the Sage Group in Seattle, a specialty-tea think tank.

Lewis didn't consult Sage in launching her Chaikhana (which means teahouse or tearoom) Chai business. Her input came from customers and her own experimentation in her kitchen at home in Malvern.

She resorted to making her own liquid chai concentrate from natural ingredients because she was dissatisfied with the options on the market - predominantly powders containing artificial ingredients, Lewis said.

In Lewis' mind, she was "just developing a menu item . . . like a muffin or a cake."

Then she got hooked by the same things that intrigue many tea connoisseurs: "Tea is exciting. It has countries and cultures. It has history."

And it has a sizable following, said Joe Simrany, president of the Tea Association of the USA in New York. When he joined the organization in 1990, U.S. tea sales were under $2 billion; they now exceed $8 billion, Simrany said.

Appealing to a market beyond the Malvern train station involved a substantial learning curve, Lewis said.

Her original concentrate required refrigeration, which was a retail hassle. A chance meeting at a coffee trade show with the manufacturer of an apple cider concentrate led to a visit to his Vermont orchard in 2006 and a valuable tutorial in food preservation through heating - essential for shelf life.

A water-testing lab in Kennett Square taught her how to get the concentrate acidic enough "so it won't grow anything," Lewis said.

What started as a process involving teaspoons and tablespoons of ingredients and cups of water had graduated to 45-gallon batches and then 100-gallon brews. The latter required 2-by-1.5 tea bags - feet, not inches! - which Lewis made herself using a food-grade organza fabric and all-natural cotton ropes.

Another trade-show encounter persuaded her to abandon plans to do her own manufacturing and go with an apple juice producer in Maryland who already had the capacity to handle her multiplying batches. They are now 350 gallons each, made five times a year with Lewis overseeing the process and using giant paddles to stir.

Again drawing on her artistic talents, Lewis shot the pictures for the labels on her three-flavor line - original, masala, and green - available in 16-ounce bottles at $12 each that make 10 servings, and single-serving packets for $1.75. They are sold on her website, www.chaikhanachai.com, and in a number of coffee shops, natural food stores, and farmers markets. She also offers commercial sizes for restaurants and bistros, where her concentrate has even been used as a martini ingredient.

Among her commercial customers is Burlap and Bean coffee roasters, operators of a cafe in Newtown Square and a coffee bar on the campus of Delaware County Community College in Marple.

"As soon as we tried her chai, we loved it," said Christine Endicott, director of marketing and sales and an owner of Burlap and Bean. "It is a huge selling point to be able to say we get the chai locally."

That was also a plus to managers of Pete's Produce near West Chester, a Chester County institution since 1987 that is selling Lewis' chai.

"It is important to support and spread the word about all up-and-coming businesses in the area," said store manager Danielle Hayes. "Word of mouth is the only way we'll all make it."

Chaikhana Chai has been profitable from the start, with sales totaling $35,000 last year and expected to increase 25 percent this year, Lewis said.

There are growth obstacles, cautioned Keating, from the tea think tank.

"It's still an underperforming market," he said of the chai sector. "The fact is that there's not enough promotion as to what it is, how you make it. That's because most of these entrepreneurs are so small. They have limited budgets."

The upside, Keating said, is "there's room for growth."

That's what has Lewis, Chaikhana Chai's sole employee, confident of reaching her goal of "running a very successful business with multiple employees who love their job and make a good living."

How big does she envision that company?

"I don't have a limit," she said. "You just keep following the bread crumbs."

Or tea leaves.

Dawn Lewis talks about her tea business at

www.philly.com/businessEndText