He Did It Once, Can He Do It Again?

Date

David Segal (formerly of DavidsTea) has teamed up with Harley Finkelstein (president of Shopify) to create the brand Firebelly Tea. Firebelly Tea is a direct-to-consumer tea brand that just launched this month (November 2021).

DavidsTea

David started DavidsTea with his uncle Herschel Segal in 2008 with a single store on Queen Street in Toronto. In 2011, DavidsTea had annual revenues of $41.9M. Just before taking the company public in 2015, DavidsTea generated $141.9M in yearly revenue.

The vast majority of their revenue came from their brick-and-mortar stores. As of March 31, 2015, DavidsTea operated 158 stores (134 in Canada and 24 in the United States). Only 7.9% of their sales came from their e-commerce store for FY2014 (Approximately $11.2M). This was up from 2.7% in 2010. Their goal was to hit 15% of overall sales for their e-commerce channel moving forward.

In 2016, David left DavidsTea. Since his leaving DavidsTea has seen some struggles (partly exacerbated by Covid). In 2019 total revenue was $196.58M, with 78% of that revenue coming from their 230 brick-and-mortar stores. In 2020, after Covid hit, they were forced to close all of their brick-and-mortar stores. They generated $121.6M in revenue (80% coming for e-commerce and wholesale).

DavidsTea would go on to file for bankruptcy protection, permanently shutting all of their United States stores and only leaving 18 stores operating in Canada. The last 3 quarters of 2021, DavidsTea generated $65.2M in total revenue (Q4 they see a spike for the Holiday season).

Back To Firebelly Tea

David and Harley are an impressive duo to launch a DTC Tea Brand (I assume I do not need to give the backstory of why Harley at Shopify is impressive). With David’s history of growing and taking a tea brand public (over $100M in annual revenues) and Harley’s expertise at direct-to-consumer with Shopify, I expect to see this brand grow quickly.

How They Have Launched The Brand

I am fortunate to have this brand come across my radar right as it is starting. Most brands I track already have years of operations under them before I am made aware of them. For that reason, I am in a unique position to start tracking this brand from the start to see how they launch and then grow the brand.

PR has been their first push. David has done interviews with Entrepreneur MagazineFortuneModern RetailThe Hustle, and more. David also did a podcast with Monocle 24.

In the podcast with Monocle 24, David spoke about how he just wants to get people aware of his product and get them to try it. He believes once people try it, they will buy it.

Samples

The best way to get people to try your product is to provide them with a sample. This was something I was going to write up more in-depth later, but I will give a quick overview.

About a year ago, I created and launched a therapy dough brand (oddly enough, it was just featured on Good Morning America today). I needed to get the word out that the product existed. I thought what better way to get the word out, collect email addresses, and get Instagram followers was to offer a free sample pack. You sign up to my email list and follow my Instagram page, and I would send you out a free sample of the therapy dough.

I boosted my post on Instagram with this offer. In a matter of about 2 hours, I had over 5,000 people request a sample.

Each sample cost me about $1 to get out the door. I used standard mail USPS mail and sent out a small pouch of dough in an envelope.

Could Firebelly Tea send out a free sample of one of their teas in a standard mail USPS envelope? I bet they could even get people to pay $1-$2 for the sample so they could cover their cost. This would be a great way to boost their social following, get people on their email list, and get people trying their product.

What Other Ways is Firebelly Tea Driving Traffic?

Firebelly Tea is running some Facebook Ads. They currently have 48 active ads.

See their Facebook ads

Firebelly is running some Google search ads. However, because they are so new, I am unable to get their top-performing keywords. 

How Much Revenue Have They Generated?

I started tracking them on Tuesday, November 16th. At this point, they only had just over 50 orders in total. I went back and checked today, and in the past two days, they have received about another 50 orders. 

I estimate their average order size to be around $40. 

In total, I estimate they have generated around $3500 – $4000 in total revenue since their launch earlier this month.

This is a slow start, but I expect things to pick up quickly for Firebelly Tea, especially with who the co-founders are.

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