Complete Guide to Start Tea Business in India

Last Updated on December 19, 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.

Tea Business Statistics in India

The Indian tea industry is poised for super growth in the coming years, driven by increasing domestic consumption and expanding export opportunities.

In 2024, the market is expected to generate approximately ₹17,000 crore in revenue, with projections reaching around ₹22,500 crore by 2030, indicating a compound annual growth rate (CAGR) of 4.9% from 2025 to 2030.

Black tea or Desi chai continues to dominate the Indian market due to its cultural acceptance. However, green tea is emerging as the fastest-growing segment, as a healthier beverage options among 30 to 50 years aged customers. (Source)

Despite these positive trends, the industry faces challenges from climate change. Extreme climate changes, have adversely affected tea production, which further leads to price fluctuation. In 2024, India’s tea production decline by approximately 100 million kilograms compared to the previous year.

How to Start a Tea Business in India

India is one of the largest tea-consuming nations, making it a perfect place to start a tea business. With the right steps and understanding, you can build a successful tea brand.

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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. Conduct Market Research

Begin by deciding your tea niche – Green Tea, Black Tea, Herbal Tea, or Flavored Tea. Research random local market trends , target audience, and competition. Understand customer likings and where the demand lies in your chosen niche. This will help you decide your product lineup.

7. Brand Name & Business Registration

Choose a brand name that reflects your tea’s quality and USP’s. Once finalized, register it for a trademark to protect your brand identity, Book a website domain for emails and web presence. Don’t forget to register your business following Indian business laws and requirements, ensuring everything is legally compliant.

8. Obtain Required Licenses and Certifications

To sell tea in India, get an FSSAI license for food safety. Also, register for GST for taxation purposes. If you plan to sell organic tea, obtain organic certifications too. These licenses build customer trust.

9. Source Quality Tea Leaves

Find reliable vendors or tea gardens that can provide fresh and high-quality tea leaves. Make sure, they offer quality supply and 2-3 months of credit in stock supply.

10. Develop Brand Identity

Work on creating a strong brand identity with a professional logo, unique branding design, and clear brand messaging. Your brand should standout in shelf from your compitition and reflect your tea’s quality, story, and values.

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11. Packaging Design

Don’t forget to invest in creative packaging design that not only protects the tea’s freshness but also motivate customers to buy your brand in respect to your compititors. Use quality materials and eye-catching designs that match your branding. Packaging plays a big role in retail success.

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12. Set Up Packaging Unit

Set up a packaging unit with a focus on quality control with educated staff and supervisors. This ensures your tea is packaged safely and maintains its aroma and freshness.

13. Develop Marketing and Advertising Strategies

Based on your distribution channels (retail, e-commerce, or B2B), create targeted marketing campaigns. Leverage social media platforms to connect with customers, build your brand, and run promotional offers. Starting a tea business requires planning, but with the right steps, you can tap into this growing market and thrive!

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What is the Tea packaging process in India?

Let’s discuss the tea packaging process in India:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

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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.

FAQ

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