tea business
TRANSCRIPT
-
7/30/2019 tea business
1/33
INDIAN TEAMARKET POTENTIAL WORLDWIDE
DR.R.CHANDRAN
-
7/30/2019 tea business
2/33
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
-
7/30/2019 tea business
3/33
DISCOVER THE MAGIC OF
INDIAN TEA
-
7/30/2019 tea business
4/33
Origin of Tea
5000 yrs Ago-Emperor of China.
During 793 AD Tea widespread.
1610
The first consignment of teareached 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
-
7/30/2019 tea business
5/33
Composition of Tea
Tea is composed of many nutrients which areclaimed to have extremely strong health benefits.
Anti Oxidants
Caffeine
Minerals Fluoride, Magnesium, Potassium andZinc
Vitamins - A, B-1, B-2, B6, B12, C and E
Amino-Acids
Theo bromine
Theo plline
-
7/30/2019 tea business
6/33
Black Tea- normally what we drink, it has been
oxidized longer, tends to have more caffeine and astronger 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
-
7/30/2019 tea business
7/33
Processing
-
7/30/2019 tea business
8/33
Transportation plant
to field
Preparing land for tea planting
Mechanical holling Planting
-
7/30/2019 tea business
9/33
Ready to harvest Plucking
Leaf weighment Loading leaf to factory
-
7/30/2019 tea business
10/33
Processing
Fermentation
Drying Grading
-
7/30/2019 tea business
11/33
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.
-
7/30/2019 tea business
12/33
Grading of Tea
The Two main factors which affect the grading oftea are:
.1 The size of the tea leaves: Whole, large tea leaves gain ahigher grading
2. The method of production of the tea: There are 2 methodsof manufacturing tea
The Grades Of Tea
There are five main grades for classifying tea and theseare:
1. Dust D
2. BOP
Broken Orange Pekoe3. OP - Orange Pekoe.
4. FOPFlowery Orange Pekoe
5. Fanning
Grading of Tea
http://images.google.co.in/imgres?imgurl=http://tea-gatherings.com/images/Copy%2520of%2520tea-grades.jpg&imgrefurl=http://tea-gatherings.com/Seasonal.aspx&h=234&w=212&sz=14&hl=en&start=39&usg=__yo2o3nO885sqb1XlbXNbemVqdGU=&tbnid=Oamm45HcakZl0M:&tbnh=109&tbnw=99&prev=/images%3Fq%3Dgrading%2Bof%2Bindian%2Btea%26start%3D20%26gbv%3D2%26ndsp%3D20%26hl%3Den%26sa%3DNhttp://images.google.co.in/imgres?imgurl=http://www.mysrilankaholidays.com/gallery/ceylon-tea-6.jpg&imgrefurl=http://www.mysrilankaholidays.com/ceylon-tea.html&h=350&w=500&sz=40&hl=en&start=17&usg=__Ey6uWgEefyHfurcOtdJ56V5tJ-k=&tbnid=dIjMnO590jSFXM:&tbnh=91&tbnw=130&prev=/images%3Fq%3Dgrading%2Bof%2Bindian%2Btea%26gbv%3D2%26hl%3Den%26sa%3DG -
7/30/2019 tea business
13/33
TEA IN INDIA
Largest producerconsumer in the world
Second largest area in the world with5,21,500 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
-
7/30/2019 tea business
14/33
INDIAN TEA
SOURCING :
Sourcing of tea
Assam
53%
W.B23.9%
Tamil Nadu11.30%
Kerla8.44%
-
7/30/2019 tea business
15/33
SOURCING LOCATIONS
-
7/30/2019 tea business
16/33
-
7/30/2019 tea business
17/33
FACTORS while sourcing
FACTORS
COST
CONSUMER
PSYCHOLOGY
SERVIVE
DEMANDQUALITY
TECHNOLOGY
COMPETITION
-
7/30/2019 tea business
18/33
MARKET ANALYSISWITH PORTERS 5 FORCES
-
7/30/2019 tea business
19/33
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
-
7/30/2019 tea business
20/33
Old age bushes 30% of tea area being above economicthreshold 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 toOrganized market
High Bargaining power
-
7/30/2019 tea business
21/33
Threat of Substitutes
Faces competition from other beverages like fruit juice andcold 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
-
7/30/2019 tea business
22/33
India
Russia
U.K
U.A.E
Export 181 million Kg
New market focus
Pakistan Iran Egypt
Export target 200million kg.
India-28%China 26 %Brazil 9%
GLOBAL MARKET POTENTIAL
-
7/30/2019 tea business
23/33
-
7/30/2019 tea business
24/33
MARKETING STRATEGIES
LOOK OUT DEMAND
INVITE BUYERS MEETS
FAIRS/EXHIBITIONS
-
7/30/2019 tea business
25/33
PROMOTIONAL STRATEGIES
Go for value addition
Branding and packing essential
Regulatory formalities and technicalrequirements
Tie-ups and collaborations
Update Market Demands
Advertising
-
7/30/2019 tea business
26/33
DISTRIBUTION CHANNEL
Three main distribution channels
Bulk market
Loose tea
Packaged tea
-
7/30/2019 tea business
27/33
DISTRIBUTION & SUPPLY CHAIN
Tea manufactured from
tea leaf by Tea Factory
In the form of loose teain bulk package
To domestic consumer
through
Retail outlet
To semi wholesaler or
Retailer for sales
To domestic consumer
In the form of
Loose tea
To merchant packers
for sales to
Domestic consumer
as packet tea
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
In consumer packsi.e. Packet Tea
To registered primary
buyers
Directly to overseas
Buyers as
Direct export
To domestic consumer
Through retail
outlet
To domestic consumers throughsecondary buyers
-
7/30/2019 tea business
28/33
OPPORTUNITIES
Growth in per capita consumption of tea. (growing at aCAGR 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 andorganic teas segment.
Growing awareness about the medicinal value of tea.
-
7/30/2019 tea business
29/33
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.
-
7/30/2019 tea business
30/33
STRATEGIES & TECHNIQUES
Increase branded products market so as to increasedomestic consumption and export as well.
Certification of the tea estates.
Set up tea cafes ( A lot more can happen over a cup oftea).
Capture the theme of medicinal value of tea.
Apply land rejuvenation and replanting activities so as to
increase productivity.
-
7/30/2019 tea business
31/33
Advertise Indias tea specialty in world market.
Open retail outlets of Indian tea in foreign markets.
Mechanize and automate operations so as to take advantageof 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 internationalacceptance.
Research and Development Investment needs to be steppedup.
-
7/30/2019 tea business
32/33
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
-
7/30/2019 tea business
33/33
THANK YOU