written by Khatabook | October 6, 2021

Learn How To Start A Tea Business In India

Tea or “Chai” is an everyday indulgence and habit in most Indian households. It is a sign of hospitality as it's served to guests; a daily part of morning and evening routines and is served during special occasions as well. It is not just an ordinary beverage, it is an emotion for many people - the first thing to sip in the morning or a great way to relax after a long day. But drinking tea and creating a business around it are two different things. To start a tea business in India, you need to gain insight into the market, the audience, and the product you want to market. 

How to Start A Tea Business in India?

Know The Product

  • Camellia Sinensis, a miraculous plant that produces over 1000 types, is the foundation of the whole tea industry. 

  • If you wish to work in the tea industry, learn all there is to know about the plant.
  • There is a wide variety of tea, including Green Tea, Yellow Tea, Black Tea, Oolong Tea, Puer Tea, and White Tea. 
  • The types of materials utilised in their production are what distinguishes them from one another. 
  • Visiting tea farms and speaking with the farmers is the greatest method to learn about this plant. 
  • Personal knowledge gained from hands-on research can transcend the proof found in books or even on the internet.

Industry Opportunity

  • India is the world's second-largest producer of tea, after China. 

  • Surprisingly, Indians make 70% of the consumers of the product.
  • An average person drinks two cups of tea daily. It can also exceed 4 to 5 cups for certain individuals.
  • It is a wonderful business endeavour for big areas and an excellent platform for investing in small towns and communities.
  • This is a good option for women who want to establish a company.

Tea shop business plan in India

These are the essential steps or planning that you need to set up an Indian tea shop or business.

Market Research to Gain Insight

  • First, choose the type of market into which you will enter before starting a firm.
  • You must thoroughly study and evaluate the market to understand the demands of potential clients.
  • Learn about the types of tea they prefer while visiting a stall or tea café
  • Understand what customers want in tea establishments.
  • Speak with competitors to have a better idea of what they're getting themselves into. 

This will provide a clear picture of the needs of a tea business in India.

Also Read: Top 10 Cities for doing business in India

Identifying Ways to Reach Customers and To Market Products

  • Tea is consumed in 90% of Indian households, but it does not necessarily mean that your target customers are tea drinkers.
  • Your audience, and hence your marketing, is reliant on your company's offerings. 
  • Various factors promote premium tea consumption in India, they include: 
  • The ease of manufacturing tea
  • Disposable income
  • Greater health consciousness
  • The capacity to explore
  • The desire to stay healthy. 
  • One must identify what consumers are looking for in their tea products. This will help one identify their target audience. Additionally, it will assist them in creating a marketing strategy to raise brand exposure and sales.

Creating a Timeline

  • The most important step in starting a new firm is to plan an appropriate business model. One must know:
  • The type and scale of business you want to start- wholesaler, retailer, tea shops or cafes etc.
  • The items to sell
  • Their expenses and tea business profit margin 
  • Investment amount
  • What products to get, 
  • Where to get them- from a wholesale market or not. 

A suitable tea business plan would be the key to a lucrative market.

Areas to Invest or Not

  • The requirements vary depending on whether you want to open a small tea shop or a café. For a small start-up like a tea stall, you don’t need a lot of money or expensive materials for a tea startup. 
  • The main idea of a stall is to stay as close to its origins as possible. 
  • A one-time investment of Rs 50,000 is adequate to get started. 
  • On the other hand, a more authentic institution, such as a tea bar or café, requires a larger investment. 
  • For urban areas, the figure may reach Rs 30 lakhs or more. 
  • To make the cafe or bar more attractive and authentic, you should invest in the furnishings, décor, machines, and other things.

Product Packaging

  • Packaging is a significant component of both distribution and marketing. Thus, it will play a critical part in a customer's buying decisions.
  • Packaging appeals to a person visually and will boost brand sales significantly. 
  • Today's manufacturers spend more than millions on food packaging each year. 
  • According to a poll, 52% of customers may repurchase an item if they enjoy the packaging. 90% prefer reusing the product's packaging such as an attractive tin can.

Padding the Profit 

  • A daily cup of tea costs Rs 1 for 30ml of milk, Rs 0.755 for 2.5 grams of powdered tea, Rs 0.50 for ten grams of sugar, and Rs 0.30 for four grams of Masala Tea. 
  • Even after adding additional charges, a cup of tea would cost around Rs 3.5-5. 
  • When operating a tea stand and selling a cup for Rs 10-20, you have a profit margin of about Rs 15 per cup. 
  • Focus on improving the margins till the products are well-known in the marketplace. 
  • Some ways to achieve this would be: 
  • Introduce a variety of tea kinds and variants in response to customer input.
  • Begin offering small nibbles and meals to accompany the tea. 
  • Choose innovative projects like moving trucks throughout the city or offering courier services.

Planning a Tea Business in India

Let's dispel any misconceptions you may have regarding how to make a tea business plan. A well-drafted business strategy for selling tea is crucial for a tea stall owner or franchise company owner. The business plan covers the organisation's history and all of the company's characteristics and activities, which will aid in getting money or business loans from financial organisations.

During any business tenure, financial institutes include private or public sector banks, microfinance institutions (MFIs), non-banking financial companies (NBFCs), or small finance banks (SFBs). A tea business plan should also include information on how to invest in the tea industry:

  • Budget for working capital
  • Statistics about labour, workers, and employees
  • Marketing
  • Tea company names 
  • Specifics of the promotional campaign (for franchise business)
  • Machines/equipment 
  • The number of raw materials required

Licenses and Permits Required to Make Tea in India

  • Firm Registration: You can establish a small to medium tea stall business as a sole proprietorship or partnership.
  • You must register your company as a proprietorship if you are establishing this business as a one-person company.
  • You must register as a limited liability partnership (LLP) or a private limited company (Pvt. Ltd.) with the Registrar of Companies to operate as a partnership/company.
  • GST Registration: A Goods and Service Tax (GST) number is necessary to operate a Tea Shop; thus, you must register for GST registration.
  • MSME/SSI Registration: Micro, Small & Medium Enterprises (MSME)/Small scale industries (SSI) registration allows you to participate in government programs and get subsidies for your firm.
  • Trademark: By registering your tea brand name as a trademark, you may protect your brand name.
  • The Food Safety and Standard Authority of India (FSSAI) classifies tea stalls as food processing businesses; therefore, you'll need to get an FSSAI license.
  • Fire license: Because your tea stall will be dealing with fire apparatus, you must obtain a fire license for your safety.

How to start a tea business from home?

Individuals can choose to start a tea business from home. They could market their products using different social media platforms or create an online store for their tea business. You can team up with tea manufacturers and obtain the raw materials required for the tea business. 

Whether you are a seasoned web designer or a novice, there are many options for creating a visually appealing and user-friendly website. Consider employing an internet platform to assist with website design, online store setup, and promotion. You can immediately begin adding material to your website once it is up and running. For example, you can write useful tea-themed blog entries to grow your audience and promote brand recognition. When you are ready to sell the tea products, make sure the product pages have excellent images and concise, helpful descriptions.

Benefits of Starting a Tea Business at Home

  • Unlimited Work Hours: Customers may browse the store and place orders anywhere, anytime across the globe. This provides owners/sellers with immediate access to a larger client base and improves the number of orders they receive.
  • Lower Infrastructure and other costs: Business owners won't have to pay rent for a physical shop, acquire furniture, or hire workers if they open an online business. This saves a lot of money and allows them to invest the earnings in improving their product, brand, and marketing methods.
  • Greater flexibility: Owners may run their company from anywhere and on their schedule.

Basics to Learn and Consider Before Starting a Tea Business in India

  • Understanding Camellia Sinensis: Anyone working in the tea industry in India should be familiar with this plant. It produces various teas, including Yellow Tea, Green Tea, Oolong Tea, Black Tea, Puer Tea, and White Tea.
  • Define Your Brand: In any tea business in India, defining your brand's Unique Selling Proposition or USP is essential. Curating premium mixes and flavours will boost your market potential while also boosting your profit margins.
  • Define your Target Audience: Your target audience may be the whole country, but developing a unique marketing strategy will enable you to appeal to multitudes effortlessly.
  • Product Packaging: For most firms in India, the "what you see is what you purchase" strategy works well. Consumers are greatly influenced by appealing packaging.
  • Tea Storage and Procurement: Indian customs officers are still unfamiliar with many types of tea. Hence, the tea must be handled properly with given instructions till delivery to guarantee that they're not infested with insects.

Tea Startups In India

Since 70% of the global tea consumers are Indians, we Indians give tough competition when drinking – and loving – our daily chai. With such a large built-in consumer base, India has several tea startups that are on their way to be successful.

  • Teabox: The Teabox brand was created in 2012 by Kaushal Dugar, a Siliguri-based entrepreneur. TeaBox, in general, allows individuals to purchase tea and tea-related goods online.
  • Chaayos: The tea startup Chaayos is located in Delhi/NCR and it was founded in 2012 by two IITians, Nitin Saluja and Raghav Varma, who graduated from the Indian Institute of Technology in Delhi. Chaayos operated over 16 tea stores in Delhi and Mumbai in 2019.
  • Chai Point: Amulik Singh Bijral created the Chai Point brand in Bangalore in 2010. Eight Road Venture, DSG Investors, and Saama Capital are among the investors in this tea business. Chai Point has expanded its operations beyond Bangalore to Delhi and Pune.
  • Chai Garam: Founded by Meghna Narayana, Chai Garam is one of the oldest tea enterprises globally. Chai Garam is a tea café chain aimed at working people. They produce and sell tea in a little shop.
  • Teapot: Teapot was first introduced in January 2013. Tea and food are provided through teapots in teapot-like rooms. The coffeehouse culture in Western countries inspired this venture, which was created with Indian tastes in mind.

Also Read: 15 Best Online Business Ideas to Start with Less Money 2021

Conclusion 

Tea is one of the world's oldest beverages, and opening a tea store in a physical location may be a lucrative business opportunity. Tea business is easy to start and a great opportunity for women entrepreneurs looking for small business ideas. India is the second-highest producer of tea crops after China. Therefore, given the popularity of tea, a tea business is almost certain to be a profitable venture. Tea business is not only popular in metro cities but also a profitable venture in small towns. 

FAQs

1. Name some popular tea manufacturers in India?

One of India's most renowned tea manufacturers is Tata Global Beverages, with tea brands such as Tata Tea, Tetley, JEMCA, Good Earth Teas, Vitax, and Joekels.

2. What is the first step to start a tea business?

To start a tea business, you must first know and learn about the herb Camellia Sinensis, from which we get different varieties of tea such as green tea, oolong tea, yellow tea, etc. 

3. What is the advantage of starting a tea business?

Tea is a low investment business, and with a country like India, which makes 70% of the world’s tea consumers, companies will have a built-in customer base. The probability of making a good and profitable tea business is high.

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