How 2 Tea Addicts Took Their Obsession From Farmers’ Markets to 6,500 Stores, Including Costco

After a trip to Europe kindled their love of tea, the young co-founders of Tiesta Tea could never go back to baggies. This story originally appeared on

Tiesta Tea founders

Tiesta Tea co-founders Dan Klein (left) and Patrick Tannous. Credit: Courtesy Company

“Thin Mint Trim,” “Chinese Gunpowder,” “Momma’s PB&J.” They sound like strange shots you’d find at a seedy bar. They’re actually flavors of loose leaf tea.

If you’re a tea drinker, you probably have questions–but these flavors aren’t meant for you. They’re gateway teas, designed by Tiesta Tea‘s co-founders Dan Klein and Patrick Tannous to hook newcomers. That includes most Americans.

While coffee remains the dominant hot beverage in the U.S., tea is on the rise–including the loose leaf variety, often containing full leaves, stems, or even dried fruit. Together, loose leaf and tea bags make up 23 percent of a $12.5 billion U.S. tea industry, according to nonprofit trade group Tea Association of the USA. “Tea consumption has been increasing slowly but surely over the last decade,” says Darren Seifer, an NPD Group food and beverage analyst.

That growth is proved out at Tiesta Tea. The Chicago-based company, which was founded in 2010 while Klein and Tannous were still in college, landed No. 759 the 2017 Inc. 5000. It boasted more than $5 million in revenue, a 600 percent uptick since 2013. Last year, sales sagged to just north of $4 million, though the founders expect to generate $8 million by the end of this year.

A Unique Partnership

Many co-founders meet at accelerators or networking events. These two met in preschool. They attended the same Chicago-area middle school and both stayed local for college. They even simultaneously studied abroad in Europe, where they kindled their love of loose leaf tea on a weekend trip to Prague.

“We weren’t really tea drinkers at the time, but when we had this cup of loose leaf tea, it was truly a tea experience,” says Tannous, the company’s president. “From seeing all the ingredients unfold to watching all the colors come together.”

Upon returning home, the friends’ newly formed tea habit dried up. They couldn’t find affordable tea options that didn’t involve prepackaged perforated baggies. So, like many budding entrepreneurs before them, they started making their own–waking up at 1:30 a.m. on Saturdays to brew and sell at farmers’ markets.

Their big break came in 2016, when they landed a bulk deal with Costco and were able to reach profitability. Today, the company sells seven product lines in 6,500 stores nationwide, including both Target and Whole Foods.


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