People have always loved drinking their favourite colas and mojitos, but over the last few years there is lots of changes in the beverages market with more natural and healthy alternative options available in the market. It was in early 2017, Siddharth Jain an M&A banker with BNP Paribas in Singapore for over six years launched his beverage venture. An avid tea lover from the very young, the inspiration came during one of Siddharth’s visit to Paris where he came across many tea rooms and cafes serving Indian brews tea. Excerpts from the interview:
How it all began?
The idea about starting tea room started last year when I went to Paris and saw that there was lots of tea room in the city. I saw that lots of these teas being served were Indian and I have been a big tea enthusiast from a very young age. That sort of ignited me that I would bring these tea to India so that people in India could consume good tea that India makes. I started looking at various models including tea rooms, chai cafes. But when I looked at these business models I saw that rentals are so high in India. Then I looked at tea machines that brew real good teas for school, colleges, MNCs etc. It was finally the bottled tea because the gap in the beverages segment was the most obvious one.
What is the sudden change?
People are heading to move away from carbonated drinks to healthy beverages but there are not too many healthier beverages option available in the Indian market and when you look to start an alternative of carbonated drink, iced tea is the most obvious alternative as it is the most natural sort of beverages option. And, that’s what has happened in the other global markets like the US and the Europe where the share for carbonated drinks are going down and the share of iced tea has really gone up so much so that iced tea is the third largest category in the world. Rather than thinking it as a threat or weakness, I saw it as an opportunity that if you do it well, the category right.
You could have started a tea café as well. Why a bottled tea?
I am sure tea cafes are doing good businesses and money. They are serving the right need as there was the need in the market. But I felt that it would be difficult for me to scale up. It’s also about what kind of business model excites you and I think it wasn’t something I was comfortable and I would like to do. I felt more comfortable with consumer packaged products and that’s what is exciting us on what we are doing tea.
What’s your view on the growing trend of iced tea business in India?
Iced tea has so far not done very well in India and hypothesis was that they are not doing well because they haven’t be done well in the market. Normally iced tea has been done in a very traditional way from tea sorbets or tea extracts wherein you add water, sugar and preservatives. The problem with that approach is that in the Indian context iced tea is still a niche segment. The consumer is essentially the health conscious, more evolved, premium consumer. When they look at tea they look at more healthier and natural ingredients. There were two things that people really want is natural, less calories. So, we have identified our consumer and what are they looking for. Our tea is first real brewed bottled tea in the country which means we don’t use extract. We use whole leaf tea, brew them on site and then we cool it down, add sugars and flavours and sell it.
What’s the shelf life of your product?
The shelf life is nine months. We use glass bottles for a long shelf life without using preservatives. It is taken to a very high temperature to sterilize the bottle and then we fill in the bottle at the high temperature, we immediately cap it and cool it down. So, by cooling it down rapidly it creates a vacuum.
Tell us about your presence in the market?
We started with HORECA with Burger Singh and it was an immediate success and expanded to other Burger Singh outlet. We quickly became one of the largest selling beverages brand at Burger Singh. We have also partnered with Barista, Belgian Waffles, Bercos, Khan Chacha, Pita Pit, Kebab Express, Binge Cafe, Desertfox to name a few. For first seven months we were only in restaurants and we didn’t do any retail. It was in Jan 2018 we started building retail presence. Now we are doing 2000 bunch of sales across the country and we are in lot of corporate offices, co-working places, 5 star hotels, modern trade chains like Spencer’s FoodHall, Big Bazar and Nature’s Basket.
How have you done the pricing?
We have priced 350 ml bottle at Rs 60.
Tell us about your expansion plans?
We have plans to expand across the country. We are looking at new products and flavours. We are very bullish about this category, new packaging format to bring the price down.