The company has been selling its coffee-style beverage - made from specially ground rooibos tea - for 10 years.
In November it launched a new capsule version in South Africa – selling more than 1 million capsules in the first month – and now its first shipment of capsules has arrived in Europe.
The company – which prides itself on its South African identity – says its greatest challenge is finding the right partners to help nurture the brand.
Starbucks and Nespresso
Red Espresso was born when, in an effort to kick a six-espressos-before-lunch habit, co-founder Carl Pretorius took the South African staple rooibos and experimented grinding the tea into an espresso shot. Today the coffee is sold in 20 countries.
Pete Ethelston, co-founder and managing director, told BeverageDaily.com the idea of capsules had been preying on their minds for some time before its launch in South Africa in November.
“We’d been watching Nespresso – people don’t appreciate that it’s only in the last decade that Nespresso and the whole single serve trend kicked off – Nespresso started in the 80s,” he said.
“Nespresso so successfully looked at the whole home experience and mimicked Starbucks: what they created in a café, they created at home with the push of a button. No fuss, no cleaning up.”
As the patent on Nespresso technology expired, the opportunity for Red Espresso capsules opened up. But Ethelston – who has previously worked with Unilever South Africa and Coca-Cola Philippines - said it took two years to develop the capsule with the right combination of taste, health extraction, intensity, and crema.
“We could have launched a year ago at 80%,” he said. “We’re probably a little slow but we’re thorough: we do something and we do it well.”
Red Espresso aims to create an alternative for coffee drinkers, or tempt tea drinkers to try the beverage in a new way. But the capsules are not limited to creating a ‘coffee’ drink and can be used to make iced teas, juices and smoothies – appealing to adults and children alike.
“We have an extremely wide audience, challenge for a marketing perspective, but it shows you the need,” said Ethelston. “They want different things, they want health, they want taste. And a lot of health products just don’t taste great.”
From South Africa…
Red Espresso started off with pre-ground rooibos, sourced from the Cederberg Mountains and sold ready to use in espresso and coffee appliances. The company touts myriad health benefits: naturally caffeine free, with five times more antioxidants than green tea.
Red Espresso takes pride in remaining a privately owned South African company, and rooibos tea itself is a South African gem – the name means ‘red bush’ and Afrikaans and grows in select areas of the country.
The company is a member of the South African Rooibos Council, a body which pushed hard to see the tea recognised with a geographical indication status.
“South Africa has been relatively poor at protecting its assets – in our colonial history, the colonies were set up to supply raw materials to the motherland, and value was created there,” said Ethelston.
“A big part of what we want to change is to create the value here, the jobs, the intellectual property.
“Part of what we did at the Rooibos Council was put on pressure to get rooibos recognised as a geographical indicator. They’ve tried to grow it in other parts of the world, but it’s not that easy to take something and plant it somewhere else.”
The capsules were launched in South Africa in November 2014 after two years of development. In December they tested the UK market with a batch online, and now the first shipment has just arrived in Europe.
“The focus now is capsules,” said Ethelston. “The timing is right, the teas and blends and health attributes.
“Europe is the logical market for us to focus on. It’s got a very big footprint of Nespresso and Nespresso compatible machines. It’s got the coffee, and coffee lifestyle appreciation, and the health trend.”
Protecting the brand
Hailing from a country used to space and distance, the size of Europe doesn’t daunt Ethelston. The biggest challenge he sees is finding the right partners for the brand.
“What we have learned, over the years, is we’re not a commodity,” he said. “We are a niche product, a niche brand. We need partners that understand what it takes to go out and build a brand.
“It’s about finding the long-term partners, who are really going to get their hands dirty and look after the brand like it’s theirs. That’s the bigger of the challenges. We would rather take our time and do it properly than blast everywhere.”