Complete Guide How to Start Packaged Tea Business in India

Last Updated on May 6, 2024 by DesignerPeople

For Indians, tea is not just a phrase or a beverage; it is an emotion: a typical Indian can’t start a day without tea, and it is a part of our everyday lives. Everyone has their beginnings when they get attached to “Chai”, and it is taken as the best solution by many people for their stress. As a design agency , we discussed in detail about tea business from history to present.

Coffee is also a beverage choice, but according to studies, the Indian population consumes 30 cups of tea for every cup of coffee. In addition, people also use tea during the evening, and most tea lovers even consume it during the day.

According to studies, an average adult in India consumes 2 cups of tea daily, and it may go more depending on the weather and mood. It is one primary reason the tea business is considered one of the most promised businesses. It is also the best business to start with minimum investment.

History of Tea in India

India is the second-largest tea producer in the world after China. Overall, 70 per cent of the Indian teas are consumed in India itself. Also, varieties like Assam and Darjeeling tea were grown exclusively in India. The tea industry grows like nothing, and more brands are introduced with the latest technologies.
It all started with the British, who discovered tea in India and cultivated and consumed it in extensive quantities between the early 1800s and 1947. In 1774, Warren Hastings approved some China seeds to George Bogle for planting, but nothing went more. Later in 1776, Sir Joseph Banks studied the scope, and with his recommendation, the tea cultivation undertook in India.

Also Read: UPSCALE YOUR BEVERAGES WITH AN EYE-CATCHING CAN LABEL DESIGN

Tea Business Statistics 2022 in India

The consumption of tea in India was around 1.2 billion kg in 2022, and the consumption of hot beverages also increased throughout the years. Out of the total tea production in India, the major centres are Assam and West Bengal. The state of Assam is also one of the highest tea-growing regions. Coming down to the south, Tamil Nadu is the highest tea producer, followed by Munnar and Wayanad.

The Indian tea market expects an increase of around 5.3% from 2023 to 2028. Even during the pandemic, the industry didn’t fall compared to other sector.
Even studies state that by 2025, brands will introduce tea segments in bars and restaurants. The average volume per person in the Tea segment is expected to increase by 0.9kg in 2023.

How to start Packaged tea business in India?

Now let’s discuss the primary factor that should consider before starting a tea business:

Before starting a tea business in India:

As tea production is one of the topmost segments, you need to look after many factors before setting a brand:

Understanding Camellia Sinensis:

If you are a hardcore tea lover and want to start a new venture, the success of your business depends on the magical plant called Camellia Sinensis. It is the central tea plant that produces more than 1000 varieties. If you want to succeed in the wholesale tea business, you need to understand the plant clearly. The best way of obtaining knowledge about this plant is by visiting tea estates and interacting with the farmers.

Recognise Your Focus Competency:

Being the 2nd largest tea producer globally, numerous brands are coming up daily. So you need to be unique and identify how your brand can stand out from the others. Understanding your target competitors and evaluating them helps get an idea of what’s already existing in the market and how it can stand out. It will also help you set up the prices competitively and counter adversary marketing campaigns with your initiatives.

Define your target audience:

Around 90% of the Indian population are tea lovers, so are they your target audience? No, your audiences are attracted to your brand’s offerings. Even the rising premium tea market in India is a piece of evidence that people have their preferences, and it’s essential to define your target audience so that you will brand design accordingly.

Working Capital & Budget Required:

You should consider the budget of working capital to run the business smoothly. It needs to be depending on the segment, operational cycle, the company’s goals and mission. Having a clear idea of the working capital helps to proportion things equally and executes strategies considering it. To develop a tea business, approximately 25-40 Lakh investment is required for raw material stocking, Packaging material, branding, Marketing, Packaging Machines, Rent and skilled/unskilled human resources etc.

Machinery &Labour: Production of tea is a long and extensive approach. Different types of machinery are used in the four stages of production withering, rolling, oxidation and drying. Also, tea development is a comprehensive labour crop that requires a good supply of economic and skilled labour, especially during tea leaves plucking.

How to set up packaged wholesale tea business plan:

Now let’s discuss how to establish a packaged tea business:

Register your business officially with the authorities:

The first and foremost step in setting up your packaged wholesale tea business is registering your business officially with the authorities. You can establish it by applying the MCA portal and other procedures. Apply for brand registration to select the brand and start with the production.

Legalise your tea business:

After the registration, it’s time to legalise your tea business and get the license number. Legalising your business helps in enjoying all the rights of the company.

Complete your GST Registration and Micro-Small and Medium Enterprises:

After legalising, it’s time to get your GST registration by going to the official portal or approaching expertise people, uploading documents on the portal, GST registration form submission, ARN number generation, and filing the MSME registration receipt.

MSME/ Small Scale Industry (SSI) registration:

You can easily register an MSME and SSI company with proper business address proof, the promoters’ identity, the business’s constitution, and any other additional documents.

Obtain a trading license:

After the registration, it’s time to obtain a trading license to get the right to all the manufacturing activities.

Get an FSSAI (Food Safety and Standard Authority of India) License:

FSSAI license is an essential requirement for every tea business company in India to manufacture, pack, retail, trade, wholesale, and distribute and supply of tea. Your FSSAI registration also needs to match the nature and size of the tea business.

Branding & Marketing:

The next and final step is the branding and marketing:

Tea Brand Design:

Having a solid tea brand design helps your customers perceive your company, products and services. Understanding your target market or audience is essential in engaging their attention. An engaging tea brand design makes your brand get the correct position in the market and helps in coming out with something new.

Tea packaging Design:

Consumers are more concerned about purchasing and clearly understand the current scenario. So, your tea packaging design can be the customer’s initial point of contact with your product, and a professionally designed tea packaging will entirely change the face of your brand. You can convey your value proposition or brand through effective packaging design. Brands offer top quality, economical and distinct options to stand out.

Tea Brand Digital Marketing:

Though the tea industry is among one of the top segments, there are still marketing challenges faced by top brands. Only a few methods can get your brand into a global audience, and digital marketing is the top one. Digital marketing helps improvise strengths, enhance opportunities and recognise threats to the tea business.

What is the Tea packaging process in India?

Let’s discuss the tea packaging process in India:

Growing & Withering:

The first stage is the growing and harvesting period in making tea. The growing environment and harvesting methods influence a significant role in the final product. Therefore, while doing the initial step, you need to get the best output. For example, planting tea in the rocky landscape can change the nature of the leaves. The main difference between the tea segmentation is also categorised according to the above conditions.

Bruising:

The step aims to seize up cell walls in the leaf and ease into the next step, known as oxidation. After withering, the leaves are rolled, warped, or even crushed. The leaves need to be purely and evenly bruised to make a good batch of a team and maintain consistency. If there are black leaves, they are processed through multiple bruising and oxidation.

Oxidizing:

After bruising, leaves are left to oxidise and turn brown. These are then set out and left to wither. You should meticulously monitor the leaves during this stage process. Again, heat and moisture are carefully controlled and make sure the tray is rotating evenly. The particular browning process is the central differentiation between different types of tea.

Fixing:

In this fixing process, whatever green is left is preserved. The particular method leads to flavour distinction. Even the variations in heating the leaves lead to some differences between the regional styles. For example, steamed leaves taste entirely different from roasted ones.

Drying:

In the last step, teas are dried to remove all moisture and make a shelf-stable leaf. The particular heating method also leads to a dramatic change in the flavours of the tea. The technique is mainly observed in charcoal roasting, which communicates a uniquely rich quality to the flavour.

Packaging:

The blended tea leaves are placed into a caper which caters for a machine that attentively measures and distributes the proper amount of tea into the packet. After filling and sealing, the package goes for a final check, which all are taken place automatically.
Tea packaging bags are fed into distinctively designed machines that can fill thousands of teabags in a square, round, pyramid, etc. Once the bags are filled with teas, they are packed into cartons for distribution.
Now the tea bags reach the destination where the products are delivered to customers. Through wholesalers or salesman, the tea companies sell their products to supermarkets and other retailers. Your tea reaches the shop shelves between 20 to 30 weeks after being plucked on the tea estate.

Tea Business Profit Margin

The average tea business generates an annual profit margin of around 10-15%. Factors that impact this figure include the price of tea sold, spending on advertising and promotion, and other costs associated with running a business. However, profit margins for tea businesses can vary significantly based on a number of factors, such as the price point and product mix. However, if you’re looking for an estimate of how much profit you could expect from your tea business, consider consulting with a professional financial advisor or doing some online research.

Conclusion

If you are an actual or passionate tea lover and planning to start a new business in India, you are right. People’s fondness for tea will never end, and they are keen on new flavours. The tea business is a highly demanding segment and has a good demand in the Indian region.
If you have any doubts about starting packaged tea business in India, we will help you. With more than 18+ years of proven tea branding and packaging experience, DesignerPeople has a good experience in the tea segment, and we can convert your dream into a successful brand.

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Author: Anush Malik

Being a strategist’s head and a long term visionary personality aims to achieve excellence in branding, packaging and digital marketing field. My 15 years of design experience and masters degree ais my strength which keeps me motivated and keep me going positively. I have participated in extensive branding design conquests in India, USA, Australia and New Zealand with winning zeal. My objective is to encourage start-ups and hence involves actively in the articles which will act as a productive intake of knowledge for them. Do connect me personally via my LinkedIn and I love to share my expertise with you.Posted in Bottle Label Design, Label DesignTagged best wine bottle label design, best wine label design, Bottle label design, creative wine label design, die cut wine label design, wine bottle label design, wine bottle label design ideas, wine bottle packaging design, wine illustration design, wine label design, wine label design company