Tea bars up the ante to lure coffee lovers

Bindu D Menon Mumbai | Updated on January 19, 2018 Published on February 05, 2016

Even big players are placing their bet on tea retailing

Tea cafes and lounges are brewing a storm in the tea cup. Even though tea has been the beverage of the nation, lack of organised tea retailing chains has prevented it from achieving the status that coffee chains have managed.

However, a few companies in the business are changing the perception by introducing the concept of tea bars or tea lounges. They are also looking at introducing merchandise and even selling customised blends online.

Wagh Bakri, a packaged-tea company, which started its tea lounge a few years ago as a forward integration for the company, is now looking to hive off its retail format as a separate entity, besides scouting for opportunities to sell a range of merchandise.

The company, which has seven tea lounges, plans to add 50 more, mainly in tier-I and II cities.

“As we grow the brand and scale up the business, we may look at retail as a separate entity. We are also looking at a range of merchandise and may formalise the same in three-four months,” said Parag Desai, Executive Director, Wagh Bakri Tea Group.

Interestingly, even big players are placing their bet on the tea retailing business.

Recently, Tata Starbucks said it is firming up plans to introduce a tea retail chain, Teavana, in India later this year.

Others like Delhi-based Chaayos said besides selling customised teas at its tea bars, the company is also selling its blends on e-commerce platforms.

Changing scenario

“The proportion of tea versus coffee drinkers is 30:1 in India. It is the beverage of choice for most Indians. However, there was no place which could provide an experience; besides people were not willing to pay. But now the scenario is changing, and youngsters are willing to experiment and experience various blends,” said Raghav Verma, co-founder, Chaayos. The company has 20 outlets.

He points that there are 2,500-3,000 coffee chains in India compared to 100 odd tea bars.

It will be soon be entering new cities such as Pune and Bengaluru. It has also raised funding to the tune of $5 million from investors such as Tiger Global.

According to a Technopak Advisors report, the per capita consumption of tea is 711 gm in India. In the estimated $6.6-billion non-alcoholic beverages market, tea commands the lion’s share at $2.3 billion.

Uday Mathur, co-founder of Tea Trail, says there is a shift in the way tea is being consumed globally.

“Even in places such as New York and San Francisco, there are exclusive tea bars. Even though India is culturally a tea-drinking nation, tea has not been branded and sold the way coffee has been. However, many players are entering the arena as they see potential for growth.”

Almost all players in the category point that there is a huge scope to expand the niche.

However, both real estate and manpower training are a challenge.

Published on February 05, 2016
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