01 Jun 2023 Red Espresso’s amazing journey to super SA success story
Red Espresso’s founders recognised the potential of the health and wellness market before it became a worldwide phenomenon. Today, the family-owned business is considered a global pioneer in healthy café culture. And more good things seem to be brewing…
In 2005 Pete and Monique Ethelston were on honeymoon in Nepal when they received the e-mail that would change their lives.
Long-time friend and business partner Carl Pretorius wrote how — jittery after his sixth cuppa joe but still keen for something more — he’d torn apart a rooibos tea bag and put the leaves through his home espresso machine. The results weren’t half bad.
Over the next few months, using high-quality rooibos and tinkering with the exact grind, Pretorius was able to produce something that mimicked a real espresso — right down to the frothy “crema” on top — but without the caffeine.
“Let’s take this to market,” he wrote to the Ethelstons.
Pretorius started out as a partner in the business (he’s since exited), but he knew that Pete, who’d had a successful career as an SAP consultant for major fast-moving consumer goods (FMCG) brands, and Monique, with all her experience in beverage marketing, were the people to take it forward.
Monique’s brother Nic Reid has also been involved from the start, and to this day Red Espresso remains a privately-owned family business.
“We have had a lot of interest from potential buyers,” says Pete, who admits that the family members “always sit down and chat … Mainly just to reassure ourselves that we’re doing the right thing for the whole business by keeping it private.”
He adds: “We’re lucky that the next generation is also involved now, so we have a built-in succession plan.”
It was these values that struck Vida e Caffè CEO Darren Levy in his first dealings with Red Espresso in 2018. “We started selling rooibos cappuccinos before we had a relationship with Red Espresso, and they contacted us to say that there were potential trademark issues,” says Levy. “From that moment on we’ve worked closely together.”
Today, Red Espresso supplies all 280 Vida branches with the ingredients for their trademarked Red Cappuccinos — and it has teamed up with the café brand to create custom health drinks such as rooibos lemonade and vanilla oat milk red cappuccinos. It also produces instant cappuccino and instant chai powder for Vida’s “at home” retail range.
“We are delighted to support a local brand that shares our values,” says Levy. “We work great together and we’re always looking for ways to grow each other’s businesses.”
But back to 2005. In the early days, the Ethelstons’ biggest challenge was getting people to actually try their product. At the time, health and wellness was still very much a fringe market — and rooibos was the furthest thing from cool. They couldn’t even dream of approaching major retailers with their left-field product.
It’s a superfood that’s indulgent … I’m still waiting for the downsideCarolina Tristao, Brazilian coffee guru who now markets Red Espresso in the US
The only way to convince people that they needed Red Cappuccinos in their lives was to get them to actually try them. So they started knocking on café and restaurant doors — with some success.
The marketing strategy “has always been about putting taste first”, says Monique. “We’ve now managed to break into the mass retail market … But every product still starts with quality ingredients and superior taste.”
The Ethelstons realised early on that high-altitude, hand-harvested rooibos just tasted better, and they were willing to pay a premium for it.
Once they’d settled on their preferred suppliers they sat down with the farmers and agreed on a pricing structure based on fair-trade principles. They also spent more than R1m on intellectual property rights, taking out worldwide trademarks on names including Red Espresso and Red Cappuccino, and worldwide patents on their grind.
Fair Trade: Red Espresso’s Seeds of Hope subsistence farming project aims to uplift communities in the high Cederberg. Pete Ethelston is pictured second from left, his wife Monique is on the far right. Picture: Supplied
Even once they had made it onto the menu of a few independent cafés and restaurants, they still had to convince people to order their products. But Pete knew they were onto something big: “Coffee doesn’t agree with me, so for years I didn’t go to cafés,” he says. “Now I could drink a cappuccino that tasted really great and was actually good for me.”
In addition to being naturally caffeine-free, Red Espresso contains aspalathin, a powerful antioxidant (found only in rooibos) that fights free radicals caused by the sun, pollution and stress, and helps to prevent premature ageing, heart disease and cancer. And because it’s naturally sugar- and caffeine-free it’s suitable for the whole family.
Carolina Tristao, the Brazilian coffee guru who now markets Red Espresso in the US, says: “It’s a superfood that’s indulgent …I’m still waiting for the downside.”
Red Espresso’s big break came in November 2005, when Woolworths added Red Cappuccinos to its café menu. It was the beginning of a “special relationship”, says Monique — one that increased Red Espresso’s brand recognition and helped it segue into retail.
By 2008, Red Espresso had been voted best new product by the Speciality Coffee Association of America. As a result of this, it received offers from retailers, including US behemoth Whole Foods.
The Ethelstons, however, remained firm in their conviction to build the brand “one drink at a time”. Back then, they sold only ground espresso powder. And they felt that, without consumer education, it would have been lost in the Sargasso Sea of retail.
The global shift towards health and wellness — expected to be a $7-trillion industry by 2025 — made things a lot easier. “We used to have a hard time convincing people to try our product,” says Monique. “But we now find consumers and cafés very open to the idea of a naturally caffeine-free coffee alternative.”
This isn’t the only area in which the Ethelstons have been proved right. Their decision to build a green factory in 2014 has reaped rewards too. The impact of the 2015-2017 Western Cape drought was mitigated by the rainwater system they’d installed. And now, as load-shedding bites, they’re (relatively) comfortable, with 75% of their electricity needs supplied by rooftop solar…….
Financial Mail: Read the full story here
Viva Red Espresso! New Product of 2006!
Back in 2006, when your editor was then editor of SA Food Review, a panel of food experts adjudged Red Espresso winner of the magazine’s annual New Product Competition. Here’s what I wrote back then….
“Red Espresso has been painting the country’s coffee shops red – and it’s the winner of Food Review’s ‘New Product of 2006’. We made our New Product Competition awards at a recent cocktail function in Cape Town.
“THERE was some fierce competition in the ‘finals’ judging of the Symrise/Food Review New Product Competition, the last round of the event that pitted the ten finalists against each other. Placing equal focus on technical innovation, marketing rationale and, ultimately, taste, our judges’ top scores were awarded to Red Espresso, the new rooibos tea product that has been specially milled for use in espresso machines and which provides a caffeine-free, great-tasting, healthy alternative to coffee but has the same style, sophistication and versatility.
“Café sophisticates love it and so did our panel of judges, who deemed this a great idea, beautifully branded and marketed, that puts a chic new spin on an old stalwart and takes rooibos tea to a whole new level, even creating a new category in the hot beverages sector. It also ties into two strong consumer trends: café culture and health.”