BUSINESS PROPOSAL

STARTUP IN TEA BEVERAGE INDUSTRY

IN DENMARK

SUBMITTED BY:

SHIVANI KASHYAP

18DM201
INTRODUCTION:

Tea is not only popular in India, Ireland and china but worldwide. The global tea market stood
worth $46,392 million in 2016 and is projected to reach $67,751 million in 2023 with the annual
growth rate of 5.5% from 2017 to 2023. Tea is present in 4 main countries- India, Sri Lanka,
China and Kenya. The main reason of its popularity is the health benefits it provides. Major
population consuming tea develops it as a habit.

And according to the statistic below, value of global tea market stood at $49.96 billion and is
forecasted to reach $73.13 billion by 2024.

Value of global tea market from 2017 to 2024

The growth in tea market is majorly driven by the health benefits and the growing awareness
related to carbonated drinks. There are many types of tea in the market- Green tea, Black tea,
Oolong tea, Dark tea etc. According to the data, revenue in the tea segment amounts to US
$38M in 2019.

As we can see in the above dataset, the tea consumption in Denmark is less as compared to
India. So seeing the growing preferences of the citizens of Denmark, tea is a favorable beverage
as it contains health benefits too.

MARKET OVERVIEW:

As the health and wellness trend continues to sweep through Denmark, consumers start to
search for products with a strong health profile in order to sustain a healthy lifestyle. The
growing number of working professional in Denmark is one of reasons of this trend. As the
number of working professionals increase, and there is shortage of time to devote to fitness.

As a result pf this, tea with its health benefits has started to become popular among the
working class of Denmark. According to organic Denmark, Denmark has one the most prolific
consumers of organic products in the world. Organic food products accounted for 10% of the
total retail food sales in 2016. Tea is one of such organic products with high growth rate seen in
last few years.
The demand for tea to expected to increase In the coming years as the fitness and wellness
trend does not show signs of slowing down. There are 4 major players in tea industry of
Denmark- Merrild Kaffe, Unilever Danmark, Haugen-Gruppen Denmark and The Fredsteds. As
the growing awareness of tea, it will be easier to place the product in the market.

Private label tea continued to lose retail volume value share throughout the review period,
including in 2017, as the competition intensified. As in other hot drinks categories, many Danish
consumers are no longer just looking for the most budget-friendly products, but are
increasingly demanding premium quality tea.

BUSINESS PLAN:

Taking advantage of this trend, my business plan is to sell tea which will be imported from
India. Reason of importing it from India is that, tea from India especially Darjeeling tea is
considered to have various medicinal properties. Darjeeling tea is tea that is grown in west
Bengal, india and is widely known and exported throughout the world. the tea has a musky
spiciness and floral aroma.

The main drivers of the product will be the medicinal properties of tea from Darjeeling and the
high demand of healthy and organic food products. The basis of promoting tea in Denmark will
be using the medicinal properties of Darjeeling tea which is worldwide famous. The aim is to
use online and offline both channels for distributing the product. In India, tea industry is highly
unorganized but the demand is very high as it is one the most popular drinks.
Offline distribution will include opening cafes and online distribution will be through already
established channels. There can be take away facility also in the cafes in order to target busy
working professionals.

Major competitors:

 Merrild Kaffe,
 Unilever Danmark,
 Haugen-Gruppen Denmark
 The Fredsteds

There will be advisory team which will also comprise F&B space. From the point of view of
marketing following are some analysis:

4 P’S:

 Product: The basic product (Darjeeling tea) will be positioned in the minds of the
prospective customers as a replacement of carbonated drinks.
 Price: the pricing strategy that will be used in introduction of the product will be
skimming strategy i.e., high prices initially and then eventually decreasing it to gain
market share.
 Place: The initial place of distribution would be the capital of Denmark, Copenhagen.
The reason behind this is that the majority of the working professionals are in the urban
area of the capital.
 Promotion: The promotion will be on mainly through social media as it is the place
where working professionals these days spend their significant amount of time.
SWOT ANALYSIS:

Strength:

 The favorable climate and terrain of Indian sub continent makes it suitable for producing
tea. The kind of climate India gets is favorable for tea. So it is easy to import tea leaves
from India.
 The cost of importing tea leaves from India will not be high. So there will be possibility
of high profit margins.

Weaknesses:

 Trading across borders takes time three to four days. Three in case of importing. There
are various licences to be obtained before importing and setting up a business in
Denmark.
 The execution in India is highly unorganized. So optimal utilization of production is
difficult to achieve.
Opportunity:

 The world bank ranks Denmark as the easiest place in Europe to do business. The people
in Denmark are quick to adopt new and innovative products which is a merit of starting
the business in Denmark.
 The current of switching to healthy drinks compared to carbonated drinks might help in
making the product successful.

Threats:

 There are already 4 major competitors in the market. So the company will have to work
to position itself differently.
 There might be awareness of health and fitness but the awareness of Indian tea will
need to be promoted.
REFERENCES:

 https://fred.stlouisfed.org/series/LFWA64TTDKQ647S
 https://www.mea.gov.in/press-
releases.htm?dtl/30923/visit+of+the+prime+minister+of+denmark+to+india+for+vibran
t+gujarat+summit+2019+january+1819++2019
 https://www.statista.com/statistics/326384/global-tea-beverage-market-size/