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Food and Beverages 2018-07-03

How Chai is Making a Comeback in the Business

The Tea Market is Expected to Grow 20-23% Annually by 2020.

By Feature Writer
How Chai is Making a Comeback in the Business

Tea is considered as the ideal companion for many occasions in India. It’s the perfect way to enjoy a rainy day, the comforting cup on a winter morning and even a soothing drink on a hot summer afternoon. 

In India, tea is much more than a drink to begin your day with. It has become an integral part of the culture and life of every Indian. In fact, if you take a walk around any local Indian road, you will definitely find chaiwallahs (tea sellers) steaming up a hot Masala Chai for their customers. Indians consume about 837,000 tonnes of tea every year, making it the country’s most popular and beloved beverage.

The Changing Trend

Chai has always been an integral part of Indian culture since British era. Tea as an industry is largely unorganized and is worth more than Rs.18000 Cr. However Tea Café as an organized segment was non-existent till few years ago. Big players in the industry identified the demand-supply gap in this segment and sensed an opportunity to build a chain of tea cafes. This segment is though at a nascent stage, has been seeing a rapid growth in the last couple of years and high level of customer engagements.

This trend is driven by the millennial & is based on the changing life styles and health benefits associated with teas. Tea based cold beverages, Tea infused food items, Tea based desserts introduced by Tea Trails are slowly becoming trends and await changes in the market for certain period of time to find demand. Turmeric Tea, for its immense health benefits, is on trending curve since near past.

The tea cafe business has caught investors’ fancy in the last few years as more urban consumers, with higher disposable incomes, spend on branded cups of the hot beverage.

A Platform for Entrepreneurship

Initially, customers would walk up to us, just to say ‘thank you’. That simple appreciation with a satisfactory smile is what I have cherished,” says Amuleek Singh, Founder, Chai Point, which is by far the biggest player in the market with almost 100 stores across the country.

Tea and the inception of the business might have happened by default, but during the course of their journey they embraced the brand with joy.

Chai Garam, another player in the game reinvents and contemporizes the concept of spending the quality time over a cup of Chai amalgamating freshly brewed made and handmade chai using garden-fresh ingredients. Budget tea is their specialty and in addition they also offer a range of juices, milkshakes, sodas, ice teas and snacks. It is one of the coolest places to spend some quality time away from the hustle of daily life with loved ones in the awe of freshest ingredients.

“We are targeting to open 500 outlets in next 5 years. We seek to partner with enterprising, motivated individuals and provide them with an opportunity to become entrepreneurs and grow with us. We are totally committed to make each outlet a success,” shares Bhrigu Dutt, Director, Chai Garam.

 “Entrepreneurs always dream, so did we — and with the intent to create the biggest F&B brand of India, we started Chai Break,” says the Founder, Anirudh.

They believe that a business is healthy only if it turns a profit from the start. “We have been profitable since inception in all our outlets. This was made possible through two simple things — picking a strategic location which can garner the attention of our target group, and at the same time, combating overheads like not having very high rents,” says Anirudh.

Tea Trails has more than a dozen varieties of India’s favourite Chai in its menu alongwith more than 80 varieties of finest teas from tea gardens across the world. While Chai, a well desired beverage for Indians & attracts masses, the Tea – the without milk varieties, have been finding place among the millennials for its health benefits over the last few years.

“We plan to expand its network from its current 30 outlets to more than 250 outlets by 2020”, says Sanjeev.

Meet the Challenges

While Chai, a well desired beverage for Indians & attracts masses, the Tea – the without milk varieties, have been finding place among the millennials for its health benefits over the last few years.

With These customers are growing rapidly in numbers year on year, Sanjeev says, “Indian customers at large need a lot of education on teas & its health benefits. Tea trails have been educating its customers on these aspects thru different PoS materials and workshops.”

Amuleek felt with coffee bars crowding the market, tea was losing its sheen. With Chai Point, we hoped to bridge that gap”, he added.

A challenge, however, that plagues the entire F&B space are the high turnover rate of manpower. “The manpower in the industry switches jobs very fast. We tried reducing it by incentivizing them on sales and by paying them a salary on the first of every month,” Anirudh reveals.

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