tea business

7/30/2019 tea business

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INDIAN TEAMARKET POTENTIAL WORLDWIDE

DR.R.CHANDRAN


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If

If you are cold, tea will warm you,

If you are heated ,it will cool you,If you are depressed, it will cheer you.

If you are excited, it will calm you

William E Gladstone


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DISCOVER THE MAGIC OF

INDIAN TEA


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Origin of Tea

5000 yrs Ago-Emperor of China.

During 793 AD Tea widespread.

1610

The first consignment of teareached Holland from where the first

import came to England.

1833 East India Company monopoly

of the tea trade.

1839

Wild Tea was discovered in

Assam and the first shipment of Indian tea

was brought to London.

Today India & Sri Lanka export Million

of pound of Tea annually


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Composition of Tea

Tea is composed of many nutrients which areclaimed to have extremely strong health benefits.

Anti Oxidants

Caffeine

Minerals Fluoride, Magnesium, Potassium andZinc

Vitamins - A, B-1, B-2, B6, B12, C and E

Amino-Acids

Theo bromine

Theo plline


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Black Tea- normally what we drink, it has been

oxidized longer, tends to have more caffeine and astronger flavor

Green Tea- least amount of oxidation, can be found

in the local grocery store

Oolong Tea- the in-between tea, it is brewed strong

and bitter but leaves a sweet aftertaste


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Processing


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Transportation plant

to field

Preparing land for tea planting

Mechanical holling Planting


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Ready to harvest Plucking

Leaf weighment Loading leaf to factory


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Processing

Fermentation

Drying Grading


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Professional Tea Tasting

The tea tasting takes place around a tasting table which is laden

with bowls of dry tea leaves.

In the next stage an amount of tea leaves weighing about 2.8

grams is put into an kettle with a capacity of 150 ml. for

brewing. Boling water is poured onto the tea leaves and the

kettle is covered to allow brewing which takes about six

minutes.

The tea liqueur is poured into the tasting cups and the infused

leaves are taken out and displayed for inspection .

The expert tea tasters taste one tea sample after another

After tasting each tea the tasters spit the tea liqueur into

spittoons.


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Grading of Tea

The Two main factors which affect the grading oftea are:

.1 The size of the tea leaves: Whole, large tea leaves gain ahigher grading

2. The method of production of the tea: There are 2 methodsof manufacturing tea

The Grades Of Tea

There are five main grades for classifying tea and theseare:

1. Dust D

2. BOP

Broken Orange Pekoe3. OP - Orange Pekoe.

4. FOPFlowery Orange Pekoe

5. Fanning

Grading of Tea
http://images.google.co.in/imgres?imgurl=http://tea-gatherings.com/images/Copy%2520of%2520tea-grades.jpg&imgrefurl=http://tea-gatherings.com/Seasonal.aspx&h=234&w=212&sz=14&hl=en&start=39&usg=__yo2o3nO885sqb1XlbXNbemVqdGU=&tbnid=Oamm45HcakZl0M:&tbnh=109&tbnw=99&prev=/images%3Fq%3Dgrading%2Bof%2Bindian%2Btea%26start%3D20%26gbv%3D2%26ndsp%3D20%26hl%3Den%26sa%3DNhttp://images.google.co.in/imgres?imgurl=http://www.mysrilankaholidays.com/gallery/ceylon-tea-6.jpg&imgrefurl=http://www.mysrilankaholidays.com/ceylon-tea.html&h=350&w=500&sz=40&hl=en&start=17&usg=__Ey6uWgEefyHfurcOtdJ56V5tJ-k=&tbnid=dIjMnO590jSFXM:&tbnh=91&tbnw=130&prev=/images%3Fq%3Dgrading%2Bof%2Bindian%2Btea%26gbv%3D2%26hl%3Den%26sa%3DG


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TEA IN INDIA

Largest producerconsumer in the world

Second largest area in the world with5,21,500 hectares.

In south 1,16,000 hectares.

Major tea growing regions are located in:-

Assam 53%,WB 23.9%,TN 11.30%, Kerala, 8.44%, Karnataka 0.48 & Tripura 1.40%.

Fourth largest exporter in the world


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INDIAN TEA

SOURCING :

Sourcing of tea

Assam

53%

W.B23.9%

Tamil Nadu11.30%

Kerla8.44%


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SOURCING LOCATIONS


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FACTORS while sourcing

FACTORS

COST

CONSUMER

PSYCHOLOGY

SERVIVE

DEMANDQUALITY

TECHNOLOGY

COMPETITION


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MARKET ANALYSISWITH PORTERS 5 FORCES


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MARKET ANALYSIS

Inter firm Rivalry

Over Supply in International markets

Intense competition among exporting Countries

Low auction Prices Many Regional Players

Two major players control 50% of market

Bargaining Power of Suppliers

No bargaining power with Integrated players

Higher bargaining power with Non Integrated players


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Old age bushes 30% of tea area being above economicthreshold age limit

Bargaining Power Consumers India is the largest consumer of tea

Unorganized sector-64% Organized Sector-36%

Existence of nearly 300 brands

Unorganized tea market is priced lower compared toOrganized market

High Bargaining power


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Threat of Substitutes

Faces competition from other beverages like fruit juice andcold drinks

Traditional coffee drinking belt

Threat of New Entrants High Capital required

ROI expected is only after 5-7 years

Non availability of fresh cultivable area

Attractive retail market Threat of new entrant in suppliers is low but in case of

retailers is high


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India

Russia

U.K

U.A.E

Export 181 million Kg

New market focus

Pakistan Iran Egypt

Export target 200million kg.

India-28%China 26 %Brazil 9%

GLOBAL MARKET POTENTIAL


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MARKETING STRATEGIES

LOOK OUT DEMAND

INVITE BUYERS MEETS

FAIRS/EXHIBITIONS


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PROMOTIONAL STRATEGIES

Go for value addition

Branding and packing essential

Regulatory formalities and technicalrequirements

Tie-ups and collaborations

Update Market Demands

Advertising


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DISTRIBUTION CHANNEL

Three main distribution channels

Bulk market

Loose tea

Packaged tea


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DISTRIBUTION & SUPPLY CHAIN

Tea manufactured from

tea leaf by Tea Factory

In the form of loose teain bulk package

To domestic consumer

through

Retail outlet

To semi wholesaler or

Retailer for sales


In the form of

Loose tea

To merchant packers

for sales to

Domestic consumer

as packet tea

Directly to the primary

registered domestic

Buyers

(non auction route)

Directly to overseas

Buyers (direct export)

To registered consignee

or commission agent or

as stock transfer

Through public

tea auction

In consumer packsi.e. Packet Tea

To registered primary

buyers

Directly to overseas

Buyers as

Direct export


Through retail

outlet

To domestic consumers throughsecondary buyers


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OPPORTUNITIES

Growth in per capita consumption of tea. (growing at aCAGR of 1.8%)

Potential to capture market in low consumption areas like

Bihar, Uttar Pradesh and Orissa. Only 36% is branded.

Market potential in iced tea, flavored teas, green teas andorganic teas segment.

Growing awareness about the medicinal value of tea.


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CHALLENGES

Production growth to be limited in future

Increasing popularity of soft drinks

Competition from Sri Lanka, Kenya and China.

Unstable Government Regulations

Lack of land rejuvenation and re-plantation activities.


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STRATEGIES & TECHNIQUES

Increase branded products market so as to increasedomestic consumption and export as well.

Certification of the tea estates.

Set up tea cafes ( A lot more can happen over a cup oftea).

Capture the theme of medicinal value of tea.

Apply land rejuvenation and replanting activities so as to

increase productivity.


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Advertise Indias tea specialty in world market.

Open retail outlets of Indian tea in foreign markets.

Mechanize and automate operations so as to take advantageof large area and increase productivity.

Advertise value added products of tea such as iced tea,organic tea etc.

Better irrigation facilities made available to the growers.

Fixing the minimum wages so as to gain internationalacceptance.

Research and Development Investment needs to be steppedup.


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MACRO STRATEGIC APPROACHES

Explore Organized Market

Technology Up gradation in Product

development Enhance the productivity of farm labour force

Product Differentiation with brand name

Acquisitions & Distribution tie ups


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THANK YOU

tea business

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