Monday, February 13, 2012

Why can't tea lounges be as attractive business proposition as cafes?

Why can't tea lounges be as attractive business proposition as cafes?

TV Mahalingam, ET Bureau Feb 12, 2012, 02.56PM IST

If you were to ask a colleague out for a meeting or on a date, chances are you would suggest a meeting "over a cup of coffee". However, if the same person were to come home, you would offer "chai-paani", unless you are from Chennai where filter coffee is king. That variance in behaviour can sum up how India approaches tea and coffee. Tea is what Indians guzzle; coffee is more of an occasional luxury.

Given this, it's hardly surprising that tea is sold more in India. Indians consume over 9 lakh tonnes of tea per year, compared to 80,000 tonnes of coffee, says Amuleek Singh Bijral, founder of Bangalore-headquarteredChai Point, a two-year-old retail chain which serves tea across a dozen outlets.

However, with global coffee chains firming up plans for India, the question to ask is: does tea have an image problem, given its lack of preference by the younger crowd? "Coffee, today, is for special occasions. Tea is just plain old chai," says Harish Bijoor, CEO, Harish Bijoor Consults, a branding consultancy. "Tea has taken its position as India's most consumed beverage for granted and has become a fuddy-duddy drink," he adds.
The Problem With Chai

There are several reasons for this image. "At one level, tea is something you drink daily at home. At the same time, it's also a seen as a connoisseur drink," says the marketing head of a multinational foods company. Moreover, unlike coffee, there are very few tea lounges or bars that are devoted to a culture of tea.

"As of today, there are over 1,870 cafes in the country. In comparison, there are just 41 tea lounges or cha bars in India," says Bijoor, pointing out that the likes of Barista, Cafe Coffee Day have done a great job of popularising coffee consumption in India. Now, Starbucks is coming.

"There is a need to open tea bars and lounges in the country to attract the young crowd," says AN Singh, managing director and CEO of Goodricke Group, a tea company.

It's a space that has seen some action in the past few years - with mixed results. In 2008, Tata Tea opened the first outlet of Chai Unchai, a tea chain, in Bangalore with similar intentions. That venture ran aground after a few years.
Flavoured Chai

During the same year, India's third largest packaged teamaker, Wagh Bakri opened its tea lounge in suburban Mumbai. "The response we have received is fantastic," says Yogesh Shinde, general manager, marketing, Wagh Bakri. Late last year, the company opened another tea lounge in Delhi. "Among our customers, 90% are under 25 and most of them are repeat customers," he adds.

Goodricke too has invested in tea bars. "We have opened tea bars in Bhopal and Jaipur recently. More than 90% of our customers are below the age of 30," says Singh.

And then there are the entrepreneurs like Birjal. "We are not a mall phenomenon or a lounge concept. Our outlets are near transportation hubs, technology parks and government offices," says Harvard-educated Bijral, who plans to expand chain outside Bangalore. "We will have 50 Chai Point outlets by end-2012," he says.

Coffee vs Chai

So, why is that nearly a decade and a half after Cafe Coffee Day started its first outlet, there is not a single tea lounge of scale in the country? For one, the technology to make instant coffee exists, thanks to the prominent coffee culture in the West. Tea brewing, on the other hand, is an art.

Chai Point says it eschews the usage of artificial ingredients, tea-bag-dipping and pre-mix-machines-based tea servings, instead focusing more on training personnel to make the best brewed beverage possible.

Bijoor says complacency of tea companies in India is responsible for the current scenario. "When they had all the volumes coming to them [from household consumption], they did not have to try anything new," he says.

Meanwhile, Tea Board officials say a campaign it had launched two years ago to popularise ice tea ran aground after two years due to paucity of funds. The board has now firmed up plans to organise an "India Tea Road Show" in key domestic markets.

And what's at stake? "The value of the tea market in this country is estimated at Rs 19,000 crore now, and is expected to go up to Rs 33,000 crore by 2015. The opportunities are there for an entrepreneur," says Birjal. In this case, the cup is definitely half full.

(Sutanuka Ghosal and Biswarup Gooptu contributed to this story)


No comments:

Post a Comment