The India Tea market size reached 1.2 million Tons in 2022 and further growth is expected. The total exports of Indian Tea, during January-April 2022 was 65 million kg and was valued at US$ 215 million. India is among the top 5 Tea exporters in the world making about 10% of the total exports. There are numerous reasons for growth of Tea market and Tea Industry as a whole. The top trends in Indian Tea industry that helps in growth of Indian Tea market can be summarized by growth in demand for variety of Tea, availability through various channels like Tea cafes, online sales and local kirana stores to name a few trends.
The Tea industry has a whole system of supply chain, involved in the process of Tea production that starts from plucking leaves from Tea gardens, sending them to the factories for processing, sorting and packaging till last mile which is market.
The India Tea Market is vast and Tea business is thriving and mostly consolidated to Hilly regions of Assam, Darjeeling in West Bengal, Tripura, Sikkim, TamilNadu, Kerela, Coimbatore and Arunachal Pradesh. These states together full fill the demands of Tea loving Indians and this Tea is also exported.
The Tea distribution channel is highly evolved in the country, mainly due to massive consumption of the beverage. These include:
- Supermarkets and Hypermarkets
- Specialty Stores
- Convenience Stores
- Online Stores
- Others like Tea cafes, restaurant sales and corporate sales
- Local Kiran stores
Teas are distributed via different channels due to the significant consumption of tea in the country.
Key reason for Growth of Tea Market in India
If we try to understand the reasons for growth then Indian Tea market report analysis say due to high demand both within the country and outside for packaged premium tea as a beverage is the first factor.
The Tea market report says Tea is taken as beverage which has numerous health benefits plus there is growing demand for Tea Cafes, apart from retail sales the online demand for India Tea has witnessed good growth for The India Tea Business.
In addition, some tea varieties, for instance, Darjeeling tea, are grown only in India and are in high demand worldwide. In India, tea is traded and purchased through private selling and auctions.
The Indian urban population is getting health conscious and Tea offers those benefits for the rural population its stress buster since ages.
The Indian Tea Market has always found its customers to be loyal and that created a TEA CULTURE in India. This loyalty of Indian Tea Lovers has evolved over decades and now consumers demand for more variety of Tea being served thus helping the growth Indian Tea business.
The pandemic was the time when the Tea industry faced lot of problems in terms of payment to laborer’s as physical stores were shut down due to lock down. During this time the online sales increased dramatically. Several direct-to-consumer (D2C) tea brands sprouted during the pandemic, and their “online-only” business models saw impressive growth.
India’s rapid economic development and rising disposable income of the middle class are also accelerating the growth of Tea Industry and helping more innovations.
The Indian Tea market benefits by contribution that comes the distribution networks, which include supermarkets and neighborhood “Kirana stores” that aid in the Tea industry’ wise growth.
Types of Tea In India
- Assam Tea, Darjeeling Tea and Sikkim Tea are most popular then comes the tea from south Indian states Tamil Nadu and Kerela.
- Black Tea is the most popular variety exported from India, accounting for approximately 96% of total tea exports.
- Green tea, herbal tea is preferred for health reason and tea leaves.
- Regular tea and green tea account for roughly 80%, 16% and 3.5% of the total tea exports from India, respectively.
The Indian Tea Market Value
The market size of tea is estimated to be approximately Rs 10,000 crore, with a penetration of more than 90% in the domestic market. Tea exports from India is approximately 210 million kg of tea, India stands as the fourth-largest exporter of tea in the world.
Revenue in the Tea segment amounts to US$16.66bn in 2023. The Indian Tea market is expected to grow annually by 0.96% (CAGR 2023-2025).
India being the world’s second-largest tea producer holds a strong position in the global export market. Russia, Iran, the UAE, the US, the UK, Germany and China are some of the top countries that import tea from India. India exported US$ 61.48 million worth tea to these countries in the first quarter of FY 2022-23.
Govt. Initiatives to Boost The Tea Industry
For further growth of Tea industry, the govt. has set up the Tea Board on 1st April 1954 and this apex body looks after over all development of the Indian Tea industry.
The Tea Board of India is taking steps at every level to support the organized and unorganised growers to promote tea and to make India one of the leading producers and suppliers of quality tea in the global market by developing effective management strategies to facilitate competence and innovation in tea plantations. This also includes introducing innovative processing technology for producing good-quality teas
Augmentation of high-value tea exports; capacity-building for human resources at all levels in the tea industry and strengthening of research and development (R&D) efforts on all aspects of tea husbandry and technology.
Institutional support is provided to grassroots innovators and outstanding traditional knowledge-holders from the unorganized sector of the society who gives their know how on the Tea market, trends etc.
The Tea as an industry supports a whole lot of laborers both organized and unorganized, giving employment facility and supporting their families.
Tech Implementation to Revamp The India Tea Market will ease ways of doing business.
Introducing technology in Tea Industry will further the growth of Indian Tea Market.
Using Data Trends: Data remains top agenda for any business and analyzing that data is equally important. Taking clues from past trend in terms of climate, weather conditions, soil, labour wages and quality of Tea that is planted are few essentials for the Tea market in India to grow.
Importance of collecting raw data and further analysing that data for business intelligence and insights will help the growth of Tea industry as a whole which also have lot of complexity in terms of production and labour wages.
Technology in production: Raw Tea leaves is first collected, dried and then collected for rolling and other process involvement takes place. All this time most of the work was done manually with few machine involvement .With latest technology introduction like AI, ML and Blockchain technology the production processes can save time and resources.
Blockchain Technology for Tea Industry: Blockchain can provide with secure platform for payment collection, distribution, renewing contracts.
By using a block chain-based ledger, it will be possible to track the origin of each batch of tea leaves, as well as its journey from the source to the consumer.
Blockchain will bring in transparency in the Tea Trade beniffiting the Tea traders and Tea business as a whole.
Tea as a beverage has been and will remain on top of the mind for Indian consumers who love sipping tea on every occasion.
Lastly it makes us proud that during the Coronation ceremony of King Charles, Darjeeling Variety of Tea from Makaibari Tea Estate, was served to guest in London. This proves the quality of our Indian Tea which has high market value and demand.
(Image courtesy:www.blog.ipleaders.com)