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Tea's stimulating business, say new bars

Wednesday, 4 January 2012 - 8:00am IST | Place: Bangalore | Agency: dna

Tea lovers in India never had it so good. Urban tea bars, lounges, kiosks and quick service restaurants now offer numerous flavours.

Tea lovers in India never had it so good. Urban tea bars, lounges, kiosks and quick service restaurants (QSRs) now offer numerous flavours.

Chai suddenly is fashionable. Want to grab a quick glass of tea en route to office? Or, just want to chill with buddies? No problem. Whatever your need,  affordable, delectable flavours — green teas, white teas, herbal teas, black teas, oolongs, fruit teas, what have you — served in stylish ambience can quench your thirst.

New-age entrepreneurs seem to have started a silent revolution to pluck tea out of shabby roadside stalls marked by burnt utensils, stained tumblers, cracked cups, ugly mugs and put the brew on a pedestal.

So, if coffee connoisseurs savour cappuccino, espresso, latte, mocha, caramel frappe, tea aficionados can now sip and slurp chamomile, rooiboos, peony rosette, white tea, jasmine tea, tea lemonades and tea mojitos.

To be sure, there is an “undying demand for the simple ‘cutting’ chai, masala chai and adrak (ginger) chai across India”, says Ankur Agrawal, co-founder of Tisane

Beverages which runs Tea Halt brand of take-away tea kiosks in the National Capital Region (NCR).

Coffee may be popular, but India is a tea-drinking nation (840 million tonnes annually). Typically, a tea-lover gulps down several cups of the brew every day. This seems to encourage entrepreneurs to think big while making plans to grab market-share.

Some of them have even dipped into their own savings to set up outlets with initial investment of Rs5-15 lakh. Focus so far has been on serving tea in unique ways, from glass tumblers (like roadside stalls) to earthen kullars and paper-cups.

Agrawal and his partners — all IIT alumni — see potential for big business in tiny 80-square-feet tea kiosks.

Others such as Chirag Yadav believe there is scope for larger outlets as well. The salsa teacher and electronics engineer fructified his belief and love for tea by starting hangout spots aptly named Chaipatty (Hindi for tea leaves). His customers laze around for hours, a la Barista or Cafè Coffee Day.

Gaurav Saria started Infinitea in the National Capital Region and Bangalore leveraging his family business (the West Bengal-based tea exporter, the Saria Group). Well-acquainted with exotic flavours like chamomile, rooiboos (from South Africa, flavoured with chocolate and ginger) and jasmine green tea from China, and driven by conviction that India is ready for such teas, Saria invested in mega-sized bars. His 1500-square-feet bars serve numerous varieties of tea.

All these enterprises seek to attract tea-lovers cutting across class lines, just like kiosks and QSRs which price their brew modestly between Rs6 and Rs35. But, the big boys believe their prices in the Rs50-100 range won’t deter true tea connoisseurs.

With margins hovering around 15-20%, and profits flowing in within three to eight months of opening, the Brew Brigade is cheery after just a little over a year into tea retailing. Demand is surging by the day, from an average 200-400 people on weekdays to 800-1,000 on weekends, they aver.

To make most of the demand, they have already chalked out expansion plans.

Agrawal wants to add another nine branches to the current four Tea Halt kiosks by June, and then look at larger outlets.

“I am looking at seven cities, including Hyderabad, Pune and Jaipur, with each city getting three outlets each,” says Yadav who is keen to expand Chaipatty from a three-stall one-city tea chain. Down the line, he says, Chaipatty will go international.

The outlets are mostly individual-led businesses, but the tea-bar segment is geared to accept partnerships, franchisees, venture capital and private equity, he adds.

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