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Reading the Future of the Food Industry in Zhena’s Gypsy Tea

August 13, 2015 by William Gast

Often the greatest triumphs emerge out of tragedy. That was certainly the case when Zhena Muzyka discovered that her son Sage was born with a severe birth defect. Medical costs alone threatened to overwhelm them both.

Drawing on her ancestral roots among the Ukrainian gypsy population, Zhena realized that tea leaves could change her fate. She launched Zhena’s Gypsy Tea, which would become a distinctive brand for organic, fair-trade, flavored and herbal teas that came with a commitment to sustainability and ethical sourcing.

237 Percent Growth

Based in Commerce, CA, Zhena’s has been crafting small batches of artisanal teas for over a decade now. Starting out with a single cart on a street corner, Zhena’s matured into a multi-million dollar company depending on an extensive network of global partnerships.  However, at a growth rate of 237%, their mounting responsibilities rapidly outpaced the capacity of their IT infrastructure. On one side, the FDA pressed for greater transparency and import/export customs became more resource-intensive. From the other end, Zhena’s active customer base grew more eager to learn about the origins of each unique tea.

It became clear that it was time for Zhena to change her fate once again.

A Strain on ERP

Paula Muesse, COO and CFO of Zhena’s, outlined how she recognized that market change had outpaced their software’s ability to handle enterprise resource planning (ERP).

“When I came to Zhena’s Gypsy Tea, we were using Quickbooks and Excel to manage our accounting and trying to manage ERP functions…. We had inventory in multiple warehouses around the world and as a result had to use multiple SKUs to identify the same stock based on location.”

What Zhena Needed

The entire record-keeping system was unnecessarily convoluted and paper-based. In addition, their stance as an organic tea producer translated into more audits and additional layers of oversight. They identified four areas they needed their new software to handle:

  1. Real-time analytics to make better split-second decisions.
  2. A more predictable cost structure.
  3. Flexibility to scale up as fast as demand, with more new teas and shorter lead times.
  4. Computing power of a datacenter to manage everything they needed to do.

Profitability on Thin Margins

Zhena’s felt that SAP Business ByDesign provided all of the functionality they needed to navigate the scope of their new responsibilities. The software was able to handle the complexity of their supply chain and to digitize their material processing so every step along the way became clear and traceable. Reporting functions put all the essential tea ingredient metrics, like yield losses and variances, in front of them to streamline audits and make better decisions. Margins are so razor thin in the food industry that this data makes all the difference in the profitability of the enterprise.

Connectivity in the Cloud

Most of all, Muesse stressed that cloud connectivity allowed her to become much more productive on her hectic schedule: “I love telling people that I’ve put purchase orders in from 35,000 feet.” The second
of the cloud’s main benefits was that despite the scope of their business, Zhena’s remains a relatively small company that couldn’t tie up resources in an extensive IT department and the costs associated with maintaining servers. The cloud gave them the reach of enterprise software without the fixed costs of a data center.

Navigator’s Fine Tuning

Zhena’s was one of the early adopters of SAP Business ByDesign and brought in Navigator two years later to explore the full potential of the platform. Navigator was able to automate ordering processes, integrate the company website with SAP on the back end and fine tune management best practices to address Zhena’s evolving challenges.

Beyond these operational considerations, the involvement with SAP Business ByDesign gave Zhena’s credibility with investors as a company prepared to handle more growth. For customers, this brought greater visibility into ingredient sourcing, proving that Zhena’s still stands by their mission statement to “protect the planet while enhancing your health and happiness.”

Recipe for Success

Zhena’s Gypsy Tea demonstrates how to be successful in the highly competitive food industry. They used futuristic cloud-based ERP and logistics technology to connect modern tea drinkers with the ancient art of wellness through quality tea. They have done it with transparency and commitment to protecting the rights of tea growers around the world. In this case, it appears that simple tea leaves really can see the future.

This story originally appeared on SAP Community Network.

Photo: Shutterstock

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