In Edible-Alpha® podcast #67, Tera chats with Rachael Young, founder and CEO of YAYAYA, an Austin, Texas-based beverage startup centered around the caffeinated plant yaupon. They discuss the ups and downs of bringing such a unique product to market and scaling a beverage business, including the challenges of raising capital.
An ethnobotanist and avid forager, Rachael discovered and fell in love with yaupon a few years ago. Native to a handful of southern states, the plant contains caffeine and is rich in the feel-good phytochemical theobromine. Native Americans used yaupon as a tea-like beverage, calling it “the drink of social wellness.” But once Europeans settled in the U.S., it all but vanished from consumer consciousness—expect among cattle ranchers and farmers in the South, who view the plant as a prolific, hard-to-eradicate nuisance.
After researching brewing methods and tinkering in her kitchen, Rachael developed a delicious beverage that provides a “gentle uplift” as opposed to the jolt delivered by energy drinks. Confident that others too would love yaupon once they learned about and tried it, she launched Texana Tea at Central Market in May 2018—still foraging, brewing and bottling by hand. Aiming to expand beyond Texas, Rachael rebranded the company as YAYAYA and relaunched in May 2019.
Scaling up has had its challenges. Rachael’s first experience with a copacker didn’t go smoothly, and she’s been told several times that the education curve for her product is too high and she’d need $100 million to really make work. Whole Foods Market picked up YAYAYA for its Southwest region, but the March 2020 launch into the chain landed right in the thick of the COVID-19 outbreak. Rachel was also slated to pitch at Natural Products Expo West, but the pandemic derailed that opportunity.
Despite these setbacks, YAYAYA has sold well at Whole Foods, Central Market, convenience stores and other accounts, and Rachael remains as passionate, driven and excited as ever about bringing yaupon to the masses. Given consumers’ shifting shopping patterns amidst the pandemic, she’s also working on building e-commerce.
Next, Tera and Rachael tackled the topic of raising capital and how it can be tricky to find investors whose vision aligns with a founder’s. Entrepreneurs in tech-heavy markets such as Austin also often find that the local investment community isn’t well versed in making money in food. And while there has been progress in investing in female founders, women still have a harder time raising than male entrepreneurs. Tera stressed the importance of financial literacy and knowing all available financing options as key to overcoming these barriers.