South Indian teas do not travel well. They also have a huge challenge of not “keeping well” for a length of time. Therefore, they need to be blended with Assams before they are branded and sold. By selling small SKUs directly from their own depots, they can reduce all distribution costs. Since they are selling stocks in cash, stocks are converted into liquid cash every day of the week. There is a great opportunity and space in the Indian tea business to develop companies like these.
The same model can be established in North East India. One just needs to have a “Keep it Simple” (KIS) business plan. It is as simple as it promises and goes something like this:
1.) Hire talented technical and agriculture graduates to manage the business.
2.) Keep liquid money, depending on the size of the business.
3.) Develop a business plan that will ensure every stakeholder in this venture is a shareholder.
Once profits come in, quality and efficiencies will improve. The tea leaves must then be converted into packets and branded. This is where the money is.
Of course, the most money in the value chain is made by the person who can convert his tea leaves into liquid tea. That is, restaurants or tea shops. But managing this aspect of business requires different skillsets. Hence, my advice to all small tea growers is to come together, form cooperatives and enterprises, convert their tea leaves into brands and sell directly to consumers. The next big opportunity will be either direct selling or co-selling with existing online retailers or both.
When the cash registers start ringing, the taste of tea will be liquid gold.
Sanjay Guha is a tea sommelier based in the U.K. For 40 years, he has sourced tea from tea plantations around the world to create boutique blends to match the palates of individual regions and marketplaces. Guha’s knowledge of tea extends from working on the ground in tea plantations around the world to working at a high level in marketing and sales in some of the world’s leading tea companies, including: Liptons, Parry Agro, Texuna International, the Maharajah Group (Sri Lanka) and the Duncan Macneill Group (The Assam Company). He now combines his knowledge of the science of tea planting, his expertise of tea demographics and his experience in management to consult with companies worldwide on business development, retail and brand management. To learn more, visit SanjayGuha.co