Iced tea consumption is rising around the globe. The current market value of the iced tea market was estimated at $6.47 billion in 2023. If you’ve been a tea consumer for a long time, it’s now a perfect time to sell your own packaged iced tea. You already know how to brew a great cuppa and are in a prime position to expand your hobby into a successful business. 

However, before you set up a stand on your street corner, you’ll need to take a few proactive steps to ensure that your business is legally compliant, properly funded, and primed for growth. 

The Legal Side

The idea of selling your homemade brews sounds simple enough. At its core, your business plan is based on scaling up the operation you’re already running at home. However, transitioning from personal consumption to selling tea for profit requires plenty of careful planning and paperwork filing. 

Before you even consider taking cash for your packaged iced tea cuppa, take care of the following steps to start your tea business correctly: 

  • Identity: Choose a brand name and a business structure. You’ll likely start business life as a sole proprietorship but should leave room to transform into an LLC as your business grows. 
  • Business Plan: Set aside a few evenings to detail your business plan. This will help you secure funding and will ensure that you don’t overlook any important obstacles related to finances, marketing, or production. 
  • Permits: Your city or country has strict zoning laws about how property can be used. Gather the correct zoning permits before you start production to avoid headaches in the future. During this time, you should also seek approval from the appropriate food processing licensing body in your state. 

Depending on your state and business structure, you may need to take additional steps when setting up your cold-brew business. For example, if you want to hire employees, you’ll need to register with the IRS to receive an EIN. If you’re still confused about how to start your tea business legally, consider reaching out to the Small Business Administration or speak with a solicitor who specializes in the service industry.  

Crafting Your Brews

To minimize the risk of the FDA shutting your operations down, consider investing in a dedicated space to brew your tea. While some states have cottage food laws that protect food production at home, it’s unlikely that your tea business will qualify. Instead, you’ll need a controlled preparation environment that will pass FDA requirements and support your business as demand grows. 

Investing in an ingredient storage shed makes the transition that much easier. Purpose-built sheds are dark, clean, and temperature-controlled. A controlled storage space environment minimizes the risk of contamination and helps you evaluate existing stock, too. This means you don’t have to worry about ingredients spoiling before you brew them. 

Use air-tight, plastic-sealed containers for any sugar, and utilize a small metal soda rack for the completed products. This will help you keep a well-organized inventory, meaning you’ll never run out of supplies or go over budget when replenishing missing stock. 

It is also essential when brewing your iced tea to brew it using hot water and sterilized equipment and package it appropriately to avoid bacterial growth. Proper storage of the final brewed product is also essential, whether you are canning the tea or pouring it into a dispenser or carafe to serve at a farmer’s market. Having a strong working knowledge of proper tea brewing techniques is essential to practice good quality control and be in compliance with food service guidelines. 

Funding Your Business

Taking care of the legal side of cold brew tea manufacturing can get expensive quickly. You’ll also need funds for equipment, packaging materials, and marketing. This means your iced tea business can require thousands of dollars of investment just to get off the ground, especially depending on what kinds of packaging that you need.

Fortunately, you don’t necessarily need to raise the funds yourself. There are plenty of small business loans available to help you get your business off the ground in the gig economy.

Babette Donaldson, founder of the International Tea Sippers Society, explains that generating multiple streams of income is in your best interest as a new business owner. Rather than handing in your two weeks’ notice, consider starting your iced tea business as a side hustle rather than your full-time gig. This will give you time to respond to challenges without having to worry about paying your bills at the end of the month. 

You don’t necessarily have to turn your side hustle into a full-time gig, either. In fact, many people now use their side hustle to generate extra cash in retirement. This is ideal if you’re approaching retirement age and have a passion for other profitable hobbies like gardening, cooking, or crafting. Iced tea brewing can be a single feather in your cap, rather than your sole source of income in later life. 

If, however, you do want to launch a full-time venture, consider reaching out to the Small Business Development organization in your state. These centers can help you raise capital and give you expert guidance to help you achieve your business goals. They’ll also be able to help you apply for bank loans by walking you through the best practices to maximize your chance of securing funding. 

Conclusion

Selling iced tea is a great way to make money from your hobby and earn some serious side income. However, before you start selling, you’ll need to apply for the requisite permits. Get the ball rolling by contacting a small business advisor who understands your state’s laws and can help you avoid expensive missteps during the early stages of production.