"Entrepreneurs are seeing many opportunities in the market for health drinks: no sugar, low sugar, vitamin-infused waters, carbonated, not carbonated, healthy teas, fermented teas, drinkable yogurt, cold brew coffees, smoothiesit seems that we are all craving tasty yet healthy replacements for soda. Dozens of new beverages have emerged in the marketplace to satisfy the latest health trends, serving consumers needs to feed mind, body, and spirit. We are in the midst of a generational shift that has created an industry with exponential growth. Take kombucha tea, for instance: This fermented tea, which is claimed to provide significant health benefits, is expected to be a $5 billion industry by 2025. Juan Giraldo, an Ecuador-born entrepreneur, has been capitalizing on these trends with his company, Waku. Waku produces and sells wellness teas made with 20 super herbs from the Andes Mountains. They compete directly with kombucha-style drinks, but, Juan claims, Waku tastes much better. Traditional kombucha is a lightly fermented beverage that boasts great health benefits derived from various probiotics. Wakus wellness teas are also delicious and nutritious, but the health benefits stem from the medicinal benefits of the herbs used in the ingredients. The drinks are not fermented and are excellent for ones digestive system. Juan has been an entrepreneur since he was 19 years old. His first company was an advertising firm that he sold to his business partner, and his next venture was an online fashion outlet, which went bankrupt within 18 months. After that, he became CEO of a small IT consulting firm before founding Waku. The idea for Waku arose when Juan and his friend, Nicolas Estrella, exchanged fond memories of the wellness tea they used to drink in their homeland of Ecuador. After both moved to Boston, they decided to produce their own version of this beverage and sell it in the Boston area. The initial production of the tea helped support the businesses of approximately six independent Andes farmers who grew the medicinal herbs and flowers used to produce the product. What exactly is Waku? It is a filtered water brew blend of 20 herbs and flowers. The name comes from the Quechua word wanku (together), which represents the combining of the ingredients as well as the team effort that goes into the production of the product. Juans first step was to travel to Ecuador to source the right ingredients in order to test his concept. Back in the United States, the Waku team began developing prototypes. At the same time he was developing Waku, Juan was also earning his MBA at Babson College. Thinking that millennials were his target market, he felt surrounded by his potential customers and used them as resources. Juan would buy rival tea products and conduct countless taste tests to compare his Waku recipes to the competition. By developing early prototypes and conducting taste tests, he was able to interact with potential customers and get valuable feedback. Juan quickly learned that his target customers were not millennials who were well educated and well traveled, but women between the ages of 40 and 60 who wanted to live a healthier lifestyle. The early growth of Waku created supply challenges. As the company grew from shipping one pallet of ingredients from Ecuador to ordering one full container (11 pallets) a month, Waku altered its strategy for paying its suppliers. Originally, Juan was expected to pay for all ingredients at the time of purchase, but that required a lot of cash up front. At the same time, Waku needed the ingredients from its suppliers to effectively meet forecasted demand. To find a solution, Juan traveled to Ecuador to work out a deal with the suppliers. After building trust with his suppliers, he proposed that they give Waku 180 days of credit to pay for ingredients. This would allow Waku the time to get the ingredients, produce the teas, sell the teas, and then pay its suppliers. As Juan explains, At first the suppliers were hesitant, but after I showed them Wakus plans for payment and how important the suppliers were to the brand, they agreed. With $200,000 in annual revenues, Juan believes the product has the potential to be a legitimate contender for market share as the business grows. Although Juan is certainly concerned with profits, that is not his only motive. His business offers beverages that he grew up with, and he truly believes in the brand because of how much it hits home. I want to provide opportunities for the people back in Ecuador. Producing top-quality ingredients is what we are known for in the rural parts of my country. Today, Waku has four full-time employees, an intern, and a strategic consultant. It also provides steady, reliable business to many farmers throughout rural Ecuador. As Waku continues to grow, many people in Ecuador will reap the benefits through an influx of capital and job creation. Although he has been an entrepreneur for a long time, Juan admits that he didnt know much about the healthy beverage sector and needed a lot of advice. I sent out emails to the top competitors in the industry, simply asking for advice. And many were more than willing to offer it! Juan recalled. His advice to other entrepreneurs? Dont be shy to ask for help. Mentors can have huge impacts on your performance. Reach out to the superstars in your industry. You will be amazed how many people will want to help a young entrepreneur who has the burning desire to succeed.

1. What differentiates Waku from other health be beverages on the market today?

2. Why was Juan able to approach his suppliers with the request he made regarding payment?

3. Does Waku have a responsibility to the region of the world in which it sources its ingredients and finds its inspiration?