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How An Investment Banker Turned Entrepreneur Is Redefining India’s Iced Tea Industry

How An Investment Banker Turned Entrepreneur Is Redefining India’s Iced Tea Industry

Whether it is hot or cold, tea is the most consumed drink in the global, after water. And, it is thrilling to word that during phrases of tea exports, India stands fourth after Kenya (including neighbouring African international locations), China and Sri Lanka, with exports reaching $463.Ninety five Mn among April-October 2018.

However this fourth function isn't always for the lack of manufacturing. India is the second biggest producer of tea however around 80% of the tea produced in India is ate up domestically.

The records of India’s tea enterprise goes again to the colonial generation whilst the British introduced tea into the united states for the duration of the early 1800s. History states that through 1850s, India became one among the largest producers of tea. Moreover, now not simply in numbers, India is the home to some of the most prized teas inside the global.

While a majority of the Indian populace consumes its tea warm and milky, a segment that's fast-growing in popularity is the iced tea or RTD (ready-to-drink) classes, as it's miles popularly called, because of more healthy alternatives being made via folks who are slowly moving faraway from carbonated or sugary drinks.

According to an industry report, from 2012 to 2017, the RTD segment in India has determined a compound annual increase price (CAGR) of 38.Eighty five% with a income cost of $14.1 Mn in 2017, an growth of 14.Ninety six% over 2016. And, this region counts all products which have tea as a base. This region is monopolised by way of larger brands which include Nestle and Unilever in India. Slowly although, the situation is converting and prefer every different enterprise, even the RTD market has visible the boom of startups, ready to seize a percentage. Founded in 2017, Delhi-based Brewhouse is one such startup this is on a task to capture the iced tea market in India.

The Inception of Brewhouse

Launched in 2017, Brewhouse is the brainchild of Siddharth Jain, an ardent lover of tea and a management graduate from Indian Institute of Management (IIM) Calcutta.

It all began even as he became operating as an investment banker in Singapore and his passion took him to one of the finest tea shops within the international – The Wellbeing Group (TWG) – a Singapore-based luxurious tea logo, which offers a wide range of merchandise from scented tea candles, white tea, to tea accessories. This is whilst he realised the gaps in the Indian iced tea segment and the vast opportunity it had bottled up, ready to bubble.

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At that point Jain realised that even though the arena became packed with huge players which includes Nestea (by Nestle) and Lipton, the iced tea in the market turned into more synthetic in nature and obtained thru either a pay attention or a powder mix. The very concept of brewing iced tea from sparkling leaves became missing and that turned into the ‘seed’ to the concept at the back of Brewhouse.

Added to this, when he tried to get it synthetic, he found out that even the industrial units (which he approached), seemed to make the tea after intensive processing and that became no longer what he changed into seeking out — an over-processed industrial product.

In a bid to installation a manufacturing unit, Jain went on to elevate a small funding from angel investor Dheeraj Jain.

However, in keeping with Jain, this wasn’t sufficient to build a global-class product. This is when Brewhouse were given the backing of Singapore-based FMCG organization Food Empire Holdings which invested $2.6 Mn inside the enterprise.

Bottling Health & Flavour For India

Unlike other bottled fizzy beverages that are bad, Brewhouse’s bottled iced teas declare to be made from real brews. The iced teas comprise 6 to six.Five% sugar, that is forty five- to-50% lesser than different widely to be had bottled liquids. Brewhouse claims that their iced teas don’t have preservatives, making it a healthy choice for the increasingly fitness-conscious human beings in India. “We purpose to serve those who respect the real flavor of iced tea,” introduced Jain.

Brewhouse believes in keeping products as natural as possible. For starters, it makes use of a natural procedure of heating, cooling after which developing a vacuum that keeps the iced tea fresh for extra than 9 months.

In a bid to be surroundings-pleasant, Brewhouse reuses its glass bottles, after a preferred cleansing process. But some of these elements make the costing of the product high. While speaking approximately the approaches in which Brewhouse manages the pricing and profitability ratio, Jain brought, “With a team of more than eighty humans, our very own manufacturing and operation unit, we maintain a preferred gross marginal income. We keep the marketing budgets low.”

With a product line of four famous brews of flavoured iced teas, namely, traditional peach, traditional lemon, honey mint and citrus inexperienced, Brewhouse has offered over 1.2 Mn bottles to date throughout extra than 15 towns in India.

Concentrating On Online & Offline Sales

The startup started the distribution with HoReCa (Hotels, Restaurants and Catering), institutional chains like cinema multiplexes, hospitals with more than one retail distributor chains in primary cities consisting of Delhi, Mumbai and Bengaluru and via popular ecommerce chains including BigBasket, HealthKart, etc across India.

Brewhouse is now achieving the boundaries beyond tier 1 cities and a number of outlets in smaller towns along with Jaipur and Chandigarh. “People also can discover us in plenty of small-town airports like Raipur, Trichy, Srinagar and Lucknow,” brought Jain.

Unfazed By Competition

Though this segment sees competition from gamers consisting of Nestea and Lipton iced tea, new entrants inclusive of Myte, Eten Craft and new iced powder mixes from Rasna, Jain does no longer see this as a aggressive area. He brought, “In India, iced tea is a very small class. Only a handful of names exist. And with the emergence of latest brands and growing attention approximately iced tea fuelled through their entry, the category will most effective get more popular that is in the end useful for our increase.”

On the pricing the front, the 350ml bottle of Liptop iced tea fees as $zero.34 (INR 24), while, a Brewhouse iced tea is available at a cost of around $ 0.Eighty five (INR 60). Other players including Nestea offers powder insta-mix of 400 gm at $1.90 (INR134).

The Food & Beverage Segment & The Future For Brewhouse

According to reports, the food and beverage marketplace in India, which become predicted to be $30.12 Bn in 2015 is anticipated to attain $142 Bn by 2020, with a compounded annual boom rate (CAGR) of 36.34%. The zone in India is indeed one of the fastest growing ones, due to elements which include changing demographics, developing disposable income and urbanisation.

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One of the important thing factors is digitisation and the upward push of convenience financial system which has offered the world to human beings’s fingertips with hyperlocal shipping systems inclusive of Swiggy, Zomato, etc and on-line marketplaces inclusive of BigBasket, Amazon, Flipkart, etc. This speaks of the large opportunity for the brand new gamers inside the zone.

Currently, Brewhouse’s iced tea is considered as a premium product. But, moving forward, Jain plans to provide you with an opportunity packaging and extra natural methods to reduce down fees, reduce fees with an goal to make Brewhouse a mass product.

Jain brought, “We are working to bring in innovations into the iced tea phase and are  developing with carbonated iced teas and more recent flavours.”

It is widely known that tea is a popular fresh drink favored through people all over the world, no matter the place, season or climate. And, Jain brought, “We are here to prove that tea offers the proper feeling of refreshment, not simplest whilst it is hot, but additionally in its bloodless form.”

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