Five years ago, Sebastian Merkhofer, 24, had only one business idea. And 500 euros. And these are borrowed from their parents. What was the idea? To engage in trade with … tea, seeing through statistics that his compatriots in Germany were making more and more tea in their daily habits. Today, Sebastian, 29, not only returned his parents 500 euros, but also has a $ 50 million company. And some of those millions went into his pocket last week because Sebastian just sold 70% of his company, Fitvia, to the German Dermapharm.
How was this successful?
A graduate in computer science and business management, Sebastian did not have his own apartment at the time, and in the living room of his father's house, he was looking for a business idea. I loved tea very much, "says Tagesspiegel." But I saw that all the tea products on the market kept a very old and dusty image. There was no innovation or new products. "His business idea was" iced tea. "As he says," I wanted to emphasize two aspects of tea in my product: the health effect and a new, modern image. "Sebastian's business "My sister made the plan, my mother made tea with me in the living room." We found different teas at the wholesale market, we mixed them according to my ideas and made our own package. "He smelled tea "We started sending orders through the mail and car at various points." Demand grew rapidly, according to Sebastian, Fitvia was already profitable after four weeks, Sebastian discovered a market with increase trends at the right time Sales of tea in Germany before 2014 ranged between 530 and 550 million euros in 2018, 649 million euros, and today reached 723 million euros, with sales of tea over 26 million tons, what means that the Germans are willing to spend and more for their tea. "The iced tea in the bottle fits perfectly with the urban lifestyle of the young," says Maximilian Firing, CEO of the German Tea Association. In his opinion, tea is more popular than ever "especially in the form of soft drinks."
With the help of Instagram
Sebastian developed a marketing strategy that was still relatively new at the time. Ads on Google and Facebook cost a lot of money. But on Instagram there are many people with lots of fans. So why not use this feature? "I contacted Instagramers with a few thousand fans, sending them some free bottles as payment to show the product photo," he says. Sebastian had discovered marketing of distress before even becoming his own business. Instagram is the most important marketing channel. In addition, he used all of Facebook's other marketing activities as Snapchat. Today, Fitvia has 65 employees and operates in six other European countries. And here, Sebastian works with local actors. In addition to tea, added other products that fit into a healthy lifestyle such as cereals or food supplements. With these new products, Fitvia expects to earn around 20 million euros in 2019. The sale of the company to Dermapharm will mean the next stage of development, says Sebastian, who wants to see his company continue to grow. "Here, Fitvia could produce even more of its own products" and "we may be targeting the Asian market," he says. The latter would eventually make his tea leave his father's house all over the world.