the hindu businessline  |  JANUARY 27, 2017  |  By: Purvitha Chatarjee

INDIAN TEA START-UPS TASTING SUCCESS IN OVERSEAS MARKETS

The funds raised would be used for opening warehouses in the US, its largest market so far. For Vahdam Teas, which has been in the online retail space for three years now, the bulk of...

The funds raised would be used for opening warehouses in the US, its largest market so far. For Vahdam Teas, which has been in the online retail space for three years now, the bulk of revenues continue to come from the 76 overseas markets, instead of India. Ratan Tata-funded Teabox also looks at the US as its largest market having raised $8 million ( Rs. 50 crore) so far and believes it has made history in the tea industry by reaching out its loose premium teas to 100 countries. When it comes to loose premium teas, the young start-ups would rather place their bets on the overseas markets to make money instead of relying on the ‘chai’-drinking domestic market. At the same time stalwarts like Starbucks-owned Teavana and a host of international tea brands are making a beeline into the country in the hope of converting Indian CTC drinkers and trading to superior loose teas. “The premium loose tea category is still not matured in India while the US is an open market for us. India is largely a CTC market but there are players like Teavana who are exploring new markets today. For us, India will always contribute about 10 per cent of our revenues,’’ says Sarda.

While Seattle-based Teavana enters India through the Starbucks stores and hopes to double its tea sales, Indian tea start-ups are wary of tasting success in the domestic market anytime soon. “Today, almost 85 per cent of our revenues come from the overseas market and we do not see this ratio changing in the foreseeable future. Despite India being a tea-drinking nation, it can never be as big as the US market for loose premium teas. In fact we have even managed to convert some of the Teavana drinkers to Teabox in the US,’’ says Kaushal Dugar, Founder and CEO, Teabox. At the same time, these start-ups are willing to give a leg up to the mass Indian brands that want to dabble in the premium loose tea segment. “We expect mass brands from HUL and Tata Global Beverages to become our strategic partners in future if they wanted to enter the premium tea segment and we have held some discussions with some of them,’’ added Sarda. With Ratan Tata as an investor in Teabox, it may be a matter of time before Teabox gives inputs to Tata Global Beverages to upgrade its portfolio into the super premium end of the loose tea market. “Ratan Tata is already the owner of the largest tea company in India and we would be keen to have some of the corporates approach us as we make quality single estate tea blends and are even more premium than Teavana in the US,’’ added Dugar. .