Her Cup of Tea

A few years ago Karla Diehl started a nightly ritual of serving tea to her family. At the time it never would have crossed her mind that the drink would someday play an important role in her future. Yet today tea is more than just a beverage she enjoys; it is her livelihood. In January she became Chief Operating Officer and Financial Manager at Partners Tea Co., a Nashville-based company specializing in fair trade and organic artisanal teas. For Diehl, whose background was in an altogether different field, it was an opportunity steeped in possibilities.

Prior to Partners, Diehl was President of Edison Automation, an industrial automation firm that she and her husband, Matthew, MBA’87, had co-founded in 1991. When Edison merged with another company in 2007, she decided to start a new chapter in her career and apply her business skills elsewhere. She had spent the better part of two decades at Edison, making a move to someplace other than an industrial, technology-driven company unlikely. Diehl, however, was open-minded about her search.

“I spent a lot of time talking to startup companies and small entrepreneurs who were trying to write business plans, something that I seem to do more of than the average bear,” she says. “You get a good insight into companies when you work with the founder. I met a lot of folks, and I liked a lot of them, but nothing seemed to be a good spot for me.”

Then last fall Diehl took a call from a friend, Lisa Froeb, whose husband, Luke, is the William C. and Margaret W. Oehmig Associate Professor in Entrepreneurship and Free Enterprise. Lisa suggested that she look into a local tea company called Partners Tea.

“I told Lisa that tea sounds lovely and it was all organic and fair trade—things I believe in—but that it was a real stretch to go from selling industrial components to tea,” Diehl says. “But she was persistent and told me more about the company and that a group of women were meeting to learn more. I begrudgingly went to that meeting and almost everyone there ended up investing in the company, including me.”

Partners Tea was founded in 2006 by Nashville native Sarah Scarborough, who incidentally, is engaged to Owen alumnus Jeff Gowdy, MBA’06. During her extensive travels after college, Scarborough became aware of fair trade principles and started developing her own tea business adhering to those guidelines. She relocated to New Zealand to study for a master’s degree and became Co-developer of Scarborough Fair, Australia’s and New Zealand’s largest fair trade tea, coffee and chocolate company. She launched Partners Tea when she returned.

“After that initial meeting I agreed to write a business plan for Sarah,” Diehl says. “People were ready to invest, but they needed to see the plan on paper. We put it together in eight or nine days. All I really did was take Sarah’s extensive knowledge and put it in a format that was acceptable to the business community.”

When Diehl and Scarborough went back to the women investors with the plan, another issue was raised: Who was actually going to run the back office of the company? The investors noted that while Scarborough knew all about the growing, blending and marketing of tea, she was missing some essential business expertise.

It was only natural then that Diehl would step in and fill that void. At Sarah’s invitation, she became COO and Financial Manager, assuming responsibility for accounting, shipping, receiving and inventory management.

“Sarah’s not at all enamored with operations, and I love it,” Diehl says. “I live for spreadsheets. I can’t plan a vacation without one. I can’t think without one. Excel is how I get through life, which frightens most of my friends.”

Partners Tea offers six blends and two pure teas—a Ceylon grown in Sri Lanka and an Assam, which is a malty black tea grown in northeastern India. The teas are shipped to a tea blender in California, who sends them to a co-packer in Pennsylvania, who then sends the finished product to Nashville where the custom-designed canisters are packed for delivery.

“The packing of teas for shipping is done by our group of investors at tea-packing parties at my house,” Diehl says. “It makes your investment ‘more real’ when you’re physically working with the product. We’ll pack hundreds and hundreds of canisters into cases and master cases several times during the year.”

Teas are available online at www.partnerstea.com, at select Whole Foods stores in the Southeast, at the Williams-Sonoma–owned chain West Elm during the holidays, and in cafes across the country. They recently added a sales representative in California and also picked up several new accounts thanks to their participation in industry trade shows earlier this year.

“We’re kind of a gift- and gourmet-type product because our price point is around $10–$12. It’s a great, lovely little package that’s perfect for a wide range of people—almost everyone drinks tea,” Diehl says.

Diehl is also very excited about the company’s membership in 1% for the Planet, a global movement of nearly 1,400 companies that donate 1 percent of their total sales to worthy causes. Partners Tea gives in support of increasing opportunities for women.

“Ours goes back to the tea estate in Sri Lanka where our Ceylon tea is grown,” she says. “Picking tea is primarily a woman’s job, and they’re pretty much on the lowest end of the totem pole in their society. We’re helping to improve their standard of living with our donation.”

Women helping women is an ongoing theme surrounding Partners Tea and its investors.

“There’s been research into what’s called ‘the girl effect,’” Diehl says. “This study shows that when women are educated and given opportunities, it raises the whole economic and social level of their community. When women earn income, they reinvest 90 percent of it back into their families.”

If women helping women is a primary theme, the Owen connection is certainly a close second. Of the 11 women involved in Partners Tea, six either are alumni or have close family members who are. Aside from Diehl, Luke Froeb and Jeff Gowdy, Owen connections to Partners Tea include Fleming Wilt, BS’91, EMBA’00; Cathy Brown, BA’86, MBA’90; and Michael Lindley, MBA’88.

Diehl credits her own business savvy to her Owen education. “Owen taught me to look at a business’ macroeconomics, and tea is a hot growth market right now,” she says. “Social entrepreneurism, fair trade, organic—all of these are growing trends and that means our company has great macroeconomics. It’s like having a great bone structure for your business.”

Making the transition from engineering and electronics to organic tea has been an interesting switch for Diehl. “What I’m most satisfied with at the end of the day is building something,” she says. “It’s satisfying to watch the market acceptance and the growth. The sales are showing me that it’s a good, fundamental business.”

Diehl also jokes that tea is certainly easier for people to relate to than her previous business. “I used to say that my husband and I had the No. 1 cocktail party buzz killer,” she says. “People would ask what I did, and I’d tell them I ran an industrial automation firm that works with communications in the utilities market. You could see their eyes glaze over.

“Tea is a lot easier to talk about.”