On the side of Alabama Chai’s bottles, you’ll find the phrase “the tastiest are milked in Alabama.” Judging by the new startup’s soaring sales of the first ready-to-drink dairy chai beverage in the country, it looks like tasty ones are brewed here, too.
Marshall Malone is a tea expert. He’s traveled the globe to learn about the world’s varieties of loose teas and their place in different cultures. He knows how to brew a single loose tea — hot, iced or frozen — and have it taste great every time. He knows how to stuff a turkey with loose tea and cook it to perfection. So it’s no surprise that his newest tea company, Alabama Chai, has created the first ready-to-drink dairy chai beverage in the country.
Chai tea lattes are a staple of coffee shops across the country, but most people don’t know that chai concentrates and powders are an $84 million industry in the U.S. Tea maven and Homewood resident Marshall Malone is tapping into people’s love with Alabama Chai.
“‘Chai’is the Hindi word for tea. It’s tea brewed with milk and spices, and there are as many recipes for chai in the world as there are recipes for casseroles here,” Malone explained.
Although coffee was Malone’s first love, he found his true calling in loose tea. “I loved coffee first, but I had migraines, so a friend introduced me to exotic teas. We’d make tea and talk for hours. That was how I discovered I loved tea,” said Malone.
The same friend hired him as director of sales and marketing of a company that sold tea, which helped Malone gain the know-how to later start his own business, Portsmouth Tea Company, in New Hampshire in 2004. Portsmouth specialized in loose teas that were sold wholesale to cafés and restaurants.
This was where the road to creating Alabama Chai became a winding one. Malone opened his own café — one that specialized in, you guessed it, loose tea drinks — but when the economy tanked in 2008, the business took a hit.
“We fell on hard times. The wholesale business was hurting and I lost the café. It was a series of unfortunate events that brought me back to Alabama, but I knew that wasn’t the end of my tea business,” he explained.
When Malone came to Birmingham, he took a different approach with his loose tea business. He launched a new company under the name Teasy Teas and sold the loose teas online. Customers buy the teas through the website, which allows Malone to put together inventory based on incoming revenue to remain sustainable. “I used to have a 3,000 square-foot warehouse, but I learned to only keep on hand what I need from week to week,” said Malone.
Meanwhile, the idea for Alabama Chai had been brewing for three years. “I’d heard about the trials that dairy farmers face. It’s hard for them to stay profitable enough to keep their doors open when you’ve got expensive middlemen and over-regulation,” Malone said. “Then the more I thought about it, I realized dairies are set up perfectly to brew tea.”
It was this realization that brought Malone to the doorstep of Working Cows Dairy in Slocomb, AL. Like Malone, economic hardship forced them to shift their revenue model to stay in business. Rather than operate as a traditional dairy, they went through the process to become certified organic and began distributing their own milk to their customers as opposed to paying a delivery service.
Working Cows Dairy’s shift to organic milk production meant that Malone’s values aligned with theirs. From the beginning, it has been important to Malone for Alabama Chai to be organic and have milk from free-range, grass-fed cows that are not over-milked and that are allowed to frolic with bulls and live happily. Likewise, Working Cows pasteurizes at a lower temperature to protect the natural cultures and enzymes, which aids in better digestion.
“Smaller farms are trying to make specialty milk and cheese to sell their products at higher prices so they can support the business,” said Malone. “Chai is 50 percent milk. By brewing there, they’re making more money and keeping the doors open. It’s a win-win.”
From there, Malone put together a business plan and applied for the Alabama Launchpad competition, an initiative of the Economic Development Partnership of Alabama that seeks to fund new startup companies. He won $30,000. The funding allowed Malone to brew and bottle Alabama Chai’s two flavors, Vanilla Chai and Earl Grey, and get them on the shelves of local grocery stores.
Between the Alabama Launchpad funding and partnering with Working Cows Dairy, Malone was able to work out many of the kinks that come with starting a new business. “One of the biggest challenges was developing the recipe for large batches. It’s one thing to make one cup of chai in your kitchen at home and [another] making 50 gallons at once and having it taste consistent,” Malone said.
He explained that the dairy has a room with 50 gallon vats of hot water where they brew the tea using giant tea bags — which, judging by his hand gestures as he said this, look like regular tea bags, but are about the size of a large body pillow.
With production on the rise, Alabama Chai is now in several grocery stores statewide. In Birmingham, the drinks are available at V. Richard’s, Whole Foods, Piggly Wiggly, Western and Fresh Market. Malone has also expanded to stores in Huntsville, Montgomery, and Daphne.
“The reception has been great. Stores are selling out faster than we anticipated and more stores seem eager to take us, but we’re nurturing the stores we’re already in before we grow,” said Malone.
When asked what fuels his passion for his tea companies, Malone shrugged. “I love tea and I love making tea for people,” he said. “Simple as that.”