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OUTLOOK. Still, mention chai and you mostly draw blank stares, even in the coffee-crazed communities of the West and Pacific Northwest, where the drink has its greatest following. But familiarity with it is growing. Chai companies are popping up in Vermont. There are chai chat rooms on the World Wide Web. And even LiveChai's Murray is appreciative of Howitt's role in boosting chai's popularity. "I feel that Oregon Chai is doing a great job of getting the word out," she says.

Oregon Chai lands ever-larger national accounts, like Nordstrom, Seattle's Best Coffee Inc. (SBC), Trader Joe's, and Whole Foods Market. While Howitt still fantasizes about the future--"There's so much we can do!" she says with a sigh, going on to tick off possibilities ranging from chai cheesecake to a national chain of chai houses--her advisers insist that she concentrate on building sales of the company's current product: the liquid concentrate. "We have a winner and need to focus on it right now. Rex taught me that," Howitt says. "It would be great to be a $100-million company," she muses. Her conservative business plan, however, projects a different goal: revenues this year of just $2.8 million.

Sources: Oregon Chai and Specialty Coffee Association of America

Feedback: What the Experts Say

Is there room for yet another specialty drink?
Opinions are mixed. While few dispute tea's rising popularity, purists like Frank Miller of Blue Willow Tea Co., in Seattle, look down on chai as faux tea. "I don't get excited about highly processed foods. What's so sensual about opening a bottle of concentrate?" But, notes Seattle's Best Coffee's director of quality assurance Dave Wickberg, citing the popularity of sweet novelty coffee drinks, "Chai has what people go for in coffee drinks." Proponents also cite chai's larger profit margin. (See "Chai Versus Latte: More Net Profit Cup for Cup.")

Is a single product enough to build the brand?
Experts disagree. "Oregon Chai should stick to its knitting," advises David BenDaniel, a professor of entrepreneurship at Cornell University's Johnson School. "Once the company dominates a niche, then it can gradually widen its beachhead by building contiguous products." On the other hand, to make a significant impact on the market, Oregon Chai "needs to develop a line of products fairly quickly," argues Gary A. Goldberg, director of culinary arts at the New School, in New York City. "When you have more than one product, you have more shelf space, and you increase your identity."

What about the big players?
"The chai market is embryonic but growing, and we're certainly keeping an eye on it," notes Peter Goggi, director of tea buying for the approximately $1.2-billion Lipton tea behemoth, which is now serving a chai product of its own at the Lipton Teahouse in Pasadena, Calif. Chai's Seattle neighbor Starbucks has been selling dry chai in a tea bag since early 1995. Starbucks even discussed buying Oregon Chai's concentrate recipe in September of that year. Howitt boasts, "We turned them down."

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