INDIAN TEA

MARKET POTENTIAL WORLDWIDE

DR.R.CHANDRAN

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

DISCOVER THE MAGIC OF INDIAN TEA

Origin of Tea

5000 yrs Ago-Emperor of China. During 793 AD Tea widespread. 1610 The first consignment of tea reached 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

Composition of Tea

Tea is composed of many nutrients which are claimed to have extremely strong health benefits. Anti Oxidants Caffeine Minerals Fluoride, Magnesium, Potassium and Zinc Vitamins - A, B-1, B-2, B6, B12, C and E Amino-Acids Theo bromine Theo plline

Black Tea- normally what we drink, it has been oxidized longer, tends to have more caffeine and a stronger 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

Processing

Transportation plant to field

Preparing land for tea planting

Mechanical holling

Planting

Ready to harvest

Plucking

Leaf weighment

Loading leaf to factory

Fermentation

Processing

Drying

Grading

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.

Grading of Tea

Grading of Tea

The Two main factors which affect the grading of tea are:
.1 The size of the tea leaves: Whole, large tea leaves gain a higher grading 2. The method of production of the tea: There are 2 methods of manufacturing tea

The Grades Of Tea

There are five main grades for classifying tea and these are: 1. Dust D 2. BOP Broken Orange Pekoe 3. OP - Orange Pekoe. 4. FOP Flowery Orange Pekoe 5. Fanning

TEA IN INDIA
Largest producer consumer in the world
Second largest area in the world with

5,21,500 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

INDIAN TEA
SOURCING :

Sourcing of tea

Assam 53%

W.B 23.9% Kerla 8.44%

Tamil Nadu 11.30%

SOURCING LOCATIONS

FACTORS while sourcing

COST

COMPETITION

CONSUMER PSYCHOLOGY

FACTORS
TECHNOLOGY SERVIVE

QUALITY

DEMAND

MARKET ANALYSIS
WITH PORTERS 5 FORCES

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

 Old age bushes 30% of tea area being above economic

threshold 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 to Organized market High Bargaining power

Threat of Substitutes Faces competition from other beverages like fruit juice and cold 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

GLOBAL MARKET POTENTIAL

Russia Export 181 million Kg

India

U.K

U.A.E New market focus Export target 200 million kg. India-28% China 26 % Brazil 9%

Pakistan

Iran

Egypt

MARKETING STRATEGIES

LOOK OUT DEMAND

FAIRS/EXHIBITIONS

INVITE BUYERS

MEETS

PROMOTIONAL STRATEGIES
Go for value addition
Branding and packing essential Regulatory formalities and technical

requirements Tie-ups and collaborations Update Market Demands Advertising

DISTRIBUTION CHANNEL
Three main distribution channels
Bulk market Loose tea Packaged tea

DISTRIBUTION & SUPPLY CHAIN

Tea manufactured from tea leaf by Tea Factory

In the form of loose tea in bulk package

In consumer packs i.e. Packet Tea

To domestic consumer through Retail outlet

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

To registered primary buyers

To semi wholesaler or Retailer for sales To domestic consumer In the form of Loose tea

Directly to overseas Buyers as Direct export

To merchant packers for sales to Domestic consumer as packet tea

To domestic consumer Through retail outlet

To domestic consumers through secondary buyers

OPPORTUNITIES
Growth in per capita consumption of tea. (growing at a

CAGR 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 and organic teas segment. Growing awareness about the medicinal value of tea.

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.

STRATEGIES & TECHNIQUES

Increase branded products market so as to increase

domestic consumption and export as well. Certification of the tea estates. Set up tea cafes ( A lot more can happen over a cup of tea). Capture the theme of medicinal value of tea. Apply land rejuvenation and replanting activities so as to increase productivity.

 Advertise Indias tea specialty in world market. Open retail outlets of Indian tea in foreign markets. Mechanize and automate operations so as to take advantage

of 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 international acceptance. Research and Development Investment needs to be stepped up.

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

THANK YOU