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Tea Bag Segment Growing At 50 Percent Annually

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The Navhind Times |  GOA |  18-07-2016

Tea bag segment growing at 50 percent annually

Officials from Madhu Jayanti, a Kolkata based tea company recently visited Goa to launch TE-A-ME flavour station. In a brief interview Sunil Parikh, India sales head for TE-A-ME talks on range of issues. Tea is for the young drinkers and companies needs to enhance the experience of drinking tea, he says to Shoma Patnaik

Q: Tea is the traditional beverage of India and drunk everywhere but what is the future of it since gen next has a big thing going for coffee?
I would say that more than liking coffee generation next likes the ambience that coffee is drunk in. They love the smart outlets and ambience of chilling out with friends in cafes. The tea industry has to be smart about what present generation wants and present itself in a better way. We need to enhance the experience of drinking tea by giving huge variety to customers. Coffee is not a threat to tea and both beverages can co-exist is my opinion.
Q: What is the structure of the tea Industry in India and what are the
growth areas of the future?
The Indian tea market is plus Rs 30,000 crore annually in size. It includes loose tea served out of bins, the bulk packaged teas, the tea bags. It is a very fragmented market and the cost of reaching out to different geographies is difficult and very expensive for a company. The bulk packaged tea segment is growing at two-three per cent annually. But what is showing increase is the tea bag segment that is growing by 50 per cent each year.
Q: That is a big increase. What is the driving growth in this segment? Because as consumers are getting busier with their lives tea bag is their format of consumption. Bulk of the tea bag segment growth is led by green tea. India is a young country and the population is getting younger than what it was previously. The younger generation has either no kids or less number of kids. They are working couples who want a convenient cup of tea. And the thing is that tea-bags give the consistent taste for each cup. There is no guessing whether it is made properly or whether it is kadak or weak. That could be another reason for the popularity of tea bags.
Q: In what segment is your company in?
Madhu Jayanti is a Rs 500 crore turnover company. About 85 per cent of our sales is from exports. In India we are in different segments. We are very strong regionally with Lal Pan brand in Karnataka and Saraswati brand in Maharashtra. TE-A-ME is in the tea-bag segment. Over a period of time we will definitely look at leaf teas or packaged tea but always value-added products for young population. We are in the economy plus segment and very clearly proud to be a Made in India, home grown brand. We are rot an international brand or brand from an international showroom. We have taken our brand and gone international.
Q: How many tea estates does the company have?
We do not have tea estates. We source our tea from estates all over the world. Because that benefits us to buy a variety and grades of tea.
Kenya, Sri Lanka, S Africa, Zimbabwe are some of the countries where we buy from. We sell in retail shops, online portals, tea flavor stations. We are available in all format to be able to satisfy the needs of different kinds of customers. We are also present in Goa market where we retail from Magsons and other stores.
Q: How do you plan to popularize tea?
We do a lot of sampling to customers, either dry or wet sampling. The tea flavor station launched on Friday in Panaji is also another way to popularize tea. We have taken initiatives to break the myth that tea is a common drink.
Madhu Jayanti international Limited with experience of over seven decades In sourcing, blending and packaging teas, today has the largest tea bag manufacturing capacity in India and Is amongst the top exporter of value added teas from India. Incorporated in 1950, It caters to the uniquely different tea palettes of over 42 consuming countries. Sales are 11,000 tons of tea per year which adds up to 10 million cups a day. The company turnover is Rs 500 crore annually. Madhu Jayanti operates its business under two models viz. company-owned brands and private labeling With offerings in packaged tea (loose/packet) and tea bags. it blends using real ingredients such as real spices, real fruit and flower pieces, sometimes with 100% natural Flavours, Instead of using artificial extracts and flavors and this continues to differenti-ate the brand on me quality front. The manufacturing and blending is car-ried out through its five state-of-the-art units in, India, Russia. Markets wherein It has a significant presence include Russia with mainland Europe, Australia, Middle-East and very recently West African countries where It is experiencing double digit growth in an otherwise flat tea economy. In Me private labeling business it supplies to aver 100 domestic and international brands several of Which are multinational chains like Cafe Coffee Day, Fresh & Honest (Barista Lavazza), Metro Cash &Carry and now moving on to Aditya Birla,
Hyper City & Costa coffee.

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