Startups

Brewing hope: How tea startups in the north-east are revolutionising the 170-year-old industry

Read more at www.financialexpress.com

As per the Tea Board of India, tea production has been severely impacted with an anticipated shortfall of 170 million kg and exports suffering to the tune of 30 million kg.

There’s no denying the fact that the tea industry in India is going through a rough patch. In the past decade, there have been several reports of tea gardens shutting down, owing primarily to losses from low yield, lack of proper management, among others. If that was not enough, the pandemic has made things worse. As per the Tea Board of India, tea production has been severely impacted with an anticipated shortfall of 170 million kg and exports suffering to the tune of 30 million kg.

It’s here that some startups from north-east India are making a difference. These businesses are revolutionising the over 170-year-old industry by leveraging the uniqueness of the region (in terms of raw materials and human resources) and are bringing the focus back on tea. “Most of the startups have sales volumes that are too small to impact a 1,400-million-kg industry meaningfully. But they are bringing the focus back on tea, and this might create additional demand, particularly for premium-quality tea,” says Prabhat Kamal Bezboruah, chairman, Tea Board of India.

Here, we bring to you tales of a few such tea startups that are brewing hope for the tea industry in India.

Dweller Teas // Imphal, Manipur
Offers unique blends made with fresh indigenous herbs, plants and fruits

Manipur-based herbal tea brand Dweller Teas offers unique natural blends made with fresh indigenous herbs, plants and fruits. All the ingredients are locally-sourced. Some flavoured tea options include Indian olive, sumac berry, lemongrass ginger and ginger green tea. One of the most popular products is Nong-mang-kha Ginger Green Tea, which has Nong-mang-kha (or Phlogacanthus thyrsiformis), a traditional medicinal plant known for its anti-viral properties in Manipur.

“People are now exploring other alternatives like traditional herbal remedies to boost their immunity. We are offering our customers unique indigenous fruits and herbs that are not easily available elsewhere,” says 31-year-old Elizabeth Yambem, who founded Dweller Teas in 2017. She moved away from her home state at a young age to study in Assam and then to the UK for her undergraduate studies. Her first job was in London as a finance analyst after which she worked in Singapore for some time.

“When we were kids and had cold or fever, we would be forced by the elders in the family to consume Nong-mang-kha to help us feel better. Just like the way my grandma used to boil Nong-mang-kha leaves to help fight cold, I am sure many mothers and grandmothers out there are using this traditional herb to help their children fight the seasonal cough and cold with its anti-viral and anti-bacterial properties,” she says. Yambem started Dweller Teas with an investment of `20 lakh from her savings and reinvested the profits and cash retained into upgrading infrastructure, increasing inventory and opening Dweller cafés. Currently, it has three cafés in Imphal and one in Shillong, Meghalaya, with plans to expand further. “Our product sales increased by over 110% year-on-year, mainly driven by word-of-mouth and opening of Dweller cafés,” she says, adding, “We are also seeing a growing demand for our products in other parts of the country, especially in the age bracket of 25-50 years, people who love exploring new flavours and are health-conscious.”

Dweller Teas also sells its products through its own e-commerce platform, which was launched during the pandemic. “One thing that would continue to be our number one priority is hygiene and safety,” says Yambem, adding that the health crisis has taught them a lot of things. “The lockdown has shown us our development areas and we are working at emerging stronger than before. We have already launched our e-commerce platform to ensure our customers have access to their favourite Dweller Teas products,” she adds.

Aromica Tea // Guwahati, Assam
Helps and supports marginalised growers who struggle to market their teas

Ever tried Bhut Jolokia tea? The fiery ghost pepper variety is one of the 32 tea blends offered by Guwahati-based Aromica Tea. All Aromica teas incorporate the health benefits of natural herbs and ingredients. “Bhut Jolokia tea is the first of its kind in the world and we have filed for a patent,” says 45-year-old Ranjit Baruah, founder-director of Aromica’s parent company, Tender Buds Teas & Crafts.

After a diploma from Guwahati’s Institute of Hotel Management and a short stint in the hotel industry, Baruah joined Williamson Magor, the largest tea company in India, in 1999 as a management trainee. It was here that he learnt the intricacies of tea production, tasting and blending, working across various tea gardens in Assam. He worked there for 20 years in various senior management capacities. “During my tenure in tea gardens, I came across many small tea growers, who grow beautiful teas in small batches in various corners of the state,” he says.

Co-founders Dolly Sharma Baruah and Ranjit Baruah

Baruah finally resigned in 2018 and started his own company Aromica Tea with wife Dolly Sharma Baruah. The idea was to help and support marginalised growers who struggle to market their teas. It was incorporated as a private limited company in February last year. Currently, Aromica has around 250 growers in its fold. These include tea growers, as well as those who grow ginger, chilli, tulsi, mint, butterfly pea flower, rose, spiral flag, chamomile and other agricultural produce that is used in Aromica’s tea blends.

their teas are available in loose form, with no artificial colours or flavours. Most of the teas are organic. “Blue tea, bamboo shoot tea, Rudraksha tea, mint tea, moringa tulsi green tea, chamomile tea and some others have been widely appreciated by our customers,” says Baruah, who started Aromica in a two-room setup in Guwahati with an initial investment of Rs 15 lakh.

Currently, Aromica is bootstrapped from family and personal investment. “Our year one revenue was about `25 lakh and we have been able to sustain our growth steadily. At present, we are up by about 48% over the last financial year till October-end,” he says.As far as Covid-19 is concerned, Baruah says they utilised the time to analyse and create wellness tea blends and forge collaborations. “We also took it as an opportunity to create a strong online presence, onboarding ourselves on to multiple e-commerce platforms across the country,” he says.

Ruloi Tea // Mangaldoi, Assam
Delivers fresh Assam teas from small growers directly to consumers

A tea connoisseur, 25-year-old Bijit Sarma was born and brought up in the world’s largest tea-growing region: Assam. A mechanical engineer by profession, love for tea brought him back to his home state, where he started his tea venture in 2017. Ruloi, which sells its brand of teas called Ésah online, has more than 10,000 customers and has, till date, delivered over 10 million cups. “I did my BTech from Ambala. Being an Assam boy, every second person I met would ask me to get them organic Assam tea,” says founder-CEO Sarma. “Every time I would come home, I would take bountiful organic teas from small tea growers… I realised that there is a big gap between fresh tea and tea lovers,” he adds.

Ruloi has some authorised retail partners in India, as well as abroad. It claims to have 50% growth every month. Currently in the seed stage, it recently raised an investment of `60 lakh. With almost 40 tea variants (Chakrasila Orthodox Black Tea, Wekhaj Handmade Organic Classic Black Tea, Organic Blue Tea, etc) at the moment, it is developing around 60 more, which it plans to launch by next year.

The traditional method of marketing and distribution means that tea takes an average of 6-12 months to reach a consumer after fresh leaf tips have been picked. “This impacts the freshness and quality of tea leaves. Also, as the demand for tea bags is increasing at a higher rate than what the companies can keep up with, nylon or polymer-based materials are being used by most brands. Research suggests that this can be very harmful to health when dipped in hot water,” says Sarma. “Regular tea bags contain microplastic… they’re generally treated with epichlorohydrin (a carcinogenic compound that helps prevent the bag from breaking) and/or sealed with glue or polypropylene plastic. Nylon tea bags, too, are harmful to health,” he adds.

This is one of the reasons Sarma thought of starting a venture, which would deliver fresh Assam teas made by small tea growers directly to consumers. “Also, our R&D team has developed plastic-free organic cotton tea bags, which are handmade. Pure cotton is just cellulose, thus it doesn’t release any harmful radicals in your cup… this is the future of tea bags,” says Sarma.

Teaorb // Guwahati, Assam
Aids tea manufacturers, especially small ones, in fetching a remunerative price

Through its website, Teaorb provides a platform to all tea manufacturers—especially small ones who don’t have the resources to market their produce—to make their teas visible to a wider audience and fetch remunerative prices. “Teaorb is the only platform where the manufacturer is taken as a partner till the end point, which is the eventual consumer,” says co-founder Bahniman Kakati.

Today, over 30 million people are “enslaved worldwide, more than at any time in history,” he says. The primary reason for this ‘enslavement’ is poverty. Even in the most organised sector such as the tea industry, workers don’t get better wages, as teas don’t fetch remunerative prices in auctions. This makes tea pickers vulnerable to human traffickers who promise better wages, explains 39-year-old Kakati, who soft-launched Teaorb in 2016. “Therefore, using technology as an enabler, we have created an e-commerce marketplace for producers from India, allowing them to deliver their finest produce directly to consumers worldwide and fetch a better price,” he says.

Co-founders Bahniman Kakati (left) and Jayanta Kakati

Tea is close to Kakati’s heart, as he was born in a tea estate in upper Assam. He would often taste some of the finest and freshest teas obtained by his father and now business partner Jayanta Kakati. “I started working at a very young age as an independent adviser for Dorling Kindersley in Guwahati and freelanced in the IT and travel sectors,” says Kakati.

Teaorb also has a consulting wing to provide scientific guidance to producers on tea cultivation, manufacturing processes, marketing, and matters related to Food Safety Standards Act 2006 and Tea Board of India’s directives on Plant Protection Code. It has over 1,100 customers in five countries (India, US, South Africa, Greece and Saudi Arabia) and is planning to engage people with its social media campaigns related to fair trade, protection of tea pickers and better price for good-quality teas.

Interview: Prabhat Bezboruah Chairman, Tea Board of India

‘The Board needs domain specialists, funds… and courage’

In an exclusive interview, Tea Board of India chairman Prabhat Kamal Bezboruah speaks to Kunal Doley about the impact of Covid-19 on the industry, the need for a liberalised open market and why the present auction system needs to be done away with. Edited excerpts:

How has Covid-19 and lockdown impacted India’s tea industry?
Our production has been severely impacted with an anticipated shortfall of 170 million kg. Exports have suffered to the tune of 30 million kg. Hence, domestic availability should have been less by 140 million kg. Out-of-home consumption has come down significantly due to the lockdown, but in-home consumption of tea has probably gone up, although hard data is awaited. Due to the huge spot shortage, wholesale prices of bulk tea increased by up to 100% for a short period. Producers feel that auction prices are being artificially depressed by various factors and forces, in view of their being seemingly immune to the huge shortfall in production.

Tea Board of India chairman Prabhat Kamal Bezboruah

The tea industry in India had been showing cracks for some time now. Will the health crisis further take it on a downward spiral?
The corona crisis may not be the catalyst for a downward spiral. In fact, surprisingly, it helped shore up revenues in the first half of this financial year. The acute correction occurring, as we speak, seems contrived and may be the result of oligopsonistic strategies adopted by some buyers of bulk tea, and I hope market forces will once again come into play to establish true price levels.

What has the Board been doing to regulate the market as a whole?
Unfortunately, very little. Although its mandate clearly spells out its responsibilities regarding the tea industry, the Board has inexplicably abdicated from the same except in areas of regulation through discretionary action. Despite efforts made by the CEOs from time to time, it does not seem that the Board will be up to playing its true role of a facilitator any time soon.

Can’t you, as the chairman, help?
The Tea Board needs domain specialists to handle tea promotion and exports. It needs funds to support R&D. It needs courage to overrule objections by sections of stakeholders in matters like auction reforms and channelling all teas through the auctions. When the government decided to appoint a non-bureaucrat as chairman, the Tea Act was amended by the Parliament, and all the chairman’s sweeping powers were vested in the deputy chairman who is a bureaucrat. As non-executive chairman, my role is that of a margadarshak.

Earlier, you said the Board should disassociate with the auction system and have a liberalised open market. Can you elaborate?
I had suggested that public auction monopoly created by the Board be dismantled and licensed players be allowed to operate their own auction with their own rules. The best system will draw more business and spawn competition. Private treaty sales should be restricted since liberalisation of auction organiser and broker licenses would create different models of tea sale, which would all be transparent and serve the purpose of price discovery better than opaque private channels or rigid public auction systems like those prevailing today, where every attempt at improving price discovery is met by resistance from vested interests.

Going forward, how can we ensure a win-win situation for the tea industry in the country?
Create demand for tea, improve quality of harvest, improve post-harvest technology and practices, restrict supply of substandard teas, ensure all teas are compliant with national health and residue standards, ensure a level-playing field for all players, make primary markets for bulk tea more efficient, and spend adequately on research.

Tea quotient

As of 2019, India is the second-largest tea producer in the world

India produced 1,390.08 million kg of tea in 2019 compared to 1,338.63 million kg in 2018

The country stands fourth in terms of tea exports after Kenya, China and Sri Lanka

India exported 252.15 million kg tea in 2019

Around 80% of the total tea produced in the country is consumed domestically

India’s domestic consumption of tea was around 1,109 million kg in 2019 compared to 1,084 million kg in 2018

Source: Tea Board of India

(Kunal Doley is a freelancer)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Read more at www.financialexpress.com

Show More

Related Articles

Back to top button