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India’s tea market estimated to be worth approximately Rs 10,000 crore
Thursday, 26 February, 2015, 08 : 00 AM [IST]
Yashaswini K
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Today, India is one of the largest tea producers in the world, with over 70 per cent of the tea being domestically consumed. The Indian tea industry has grown to own many global tea brands, and has evolved to one of the most skilled tea industries in the world.

The market size of tea is estimated to be approximately Rs 10,000 crore, with a penetration of more than 90 per cent in the domestic market.

With an export of approximately 210 million kg of tea, India stands as the fourth-largest exporter of tea in the world, with China at the top. About 72 per cent of the country’s tea sector is organised.

The global consumption of tea jumped 60 per cent between 1993 and 2010, and significant growth is forecast, as more people become consumers of tea.

The total tea production in the world has exceeded four billion kg, with India producing about one billion kg of tea.

Between 2008 and 2013, black tea production in India increased at a compounded annual growth rate (CAGR) of 1.6 per cent, while consumption rose at a CAGR of 2.3 per cent.

Currently grown in 35 countries, the tea industry provides a source of employment and export earnings for the developing and underdeveloped nations.

It also has an ancient heritage, dating back 5,000 years, revealing a rich cultural history. In China, tea is not only a way of celebration, but also a religion.

In Japan, the tea ceremony (or Chado) is revered for its connection with Zen Buddhism. The preparation and serving of matcha tea, for example, is elevated to performance art with an emphasis on aesthetics and harmony.

The Russians drink strong, black tea from a Samovar. In Morocco, the nationals prefer mint tea. In England, taking afternoon or high tea is still a celebrated occasion.

Tea in India is mainly cultivated in the southern, eastern and north-eastern parts. A number of renowned teas, such as Assam, Darjeeling and Nilgiri, grow exclusively in India and are exported.

Tea is also grown in the Dauladhar region in Kangra. There was a time when tea from this part of Himachal Pradesh ranked among the best in the world.

Between 1886 and 1895, Kangra’s tea won gold and silver medals for quality in London and Amsterdam.

In 1883, the Gazetteer of the Kangra District noted that tea produced in the region was “probably superior to that produced in any other part of India”.

Yet, it slipped virtually into oblivion, caused by the devastating earthquake of April 4, 1905, which reduced the entire valley to rubble, crippling the industry.

Happily, the worst seems to be over for Kangra’s tea. In the past two decades, the acreage under tea has started increasing, production is up, the quality of tea is much better, earnings are higher, even the estates are now a sight to behold.

In 2006, Kangra also won recognition as a geographic indicator for tea. Today, Kangra tea has its own significant symbol - two leaves and a bud.

Flavour is the unique selling proposition of Kangra tea. The Chinese hybrid variety grown here produces a very pale liquor, the very reason Kangra does not produce any crushed, turned and curled (CTC) tea (the staple tea of India).

Assam continues to lead the nation’s five growing regions with an April-December harvest of 607 million kg, up by five per cent as compared to previous year.

West Bengal tea growers increased yield by 11 per cent to 290 million kg, according to the Tea Board.

The southern growing regions regions of Tamil Nadu, Kerala and Karnataka showed a 16 per cent increase for the period to 196 million kg.

The tea production grew by 6.5 per cent last year (to a record 1.2 million metric tonnes), and the domestic consumption reached 856 million kg in 2011 and 875 million kg in 2012.

The Tea Board estimated that consumption would top 880 million kg. The growth continues at two to three per cent annually, which would mean that India would have to begin importing tea to meet its domestic demand and maintain export targets.

Per capita consumption rose to 718g (1.58lb) in 2011, which was about triple the domestic consumption in the United States. It rose steadily from a per capita count of 654g (1.44lb) in 2001.

We can see the diversity in the consumption pattern in India, the way in which tea is consumed and embraced by both the rich and influential and commoners, with variations depending on regional and cultural affiliations.

Tea is consumed every day, in all types of varieties, including CTC, orthodox and Oolong. CTC is highly consumed, with the concept of anti-oxidants emerging as the true superheroes of today’s world.

We see a shift in the consumption pattern, from the everyday chai (which kick-starts the day with the essential caffeine [and is sometimes made with added spices such as basil, cardamom and pepper, which is called masala chai or chai tea in the United States]) to black tea.

The English prefer orthodox black tea variants, such as Orange pekoe tea (a graded leaf which is taken with milk added separately).

Lately, green tea has become relatively widespread, where black tea was traditionally consumed. It is the normal tea, which has not been oxidised much to retain the anti-oxidants.

Vikram Grover, vice-president and marketing head, Tata Global Beverages, which owns the tea brand Tetley, said, “The green tea category has been growing at around 60 per cent year-on-year, compared with black tea that is growing at around two per cent.”

Green tea is now a brand in itself. It has established a segment of tea drinkers, who are more health-conscious, and also those who lead a lifestyle where a routine diet cannot be followed.

With nutritionists touting it as the elixir, the market for green tea has been growing phenomenally, and has become quite a fad. It is slowly but steadily becoming famous in the US market, where a switch from coffee is seen.

A survey of American tea consumers found that the increased consumption of tea in the United States was attributable to the use of single-serve tea capsules.

This growing craze for green tea has also made space for white tea, the least processed tea, which has the highest antioxidant levels. Japan, Korea and China are its largest consumers.

It is a status symbol for a certain class of the English to drink only special varieties of white tea, like Silver Needle.

White tea has been sold by many supplement manufacturers as a fat-burner and a prescription drug for years, due to this plant’s ability to speed up the metabolism rate.

In addition to its fat-burning qualities, white tea may also help prevent cancer. Flavonoids, a class of antioxidants, inhibit the growth of cancer cells and prevent the development of new ones. It comes in varieties such as Silver Needle and White Peony, depending on the quality.

Rooibos tea, native to South Africa, is reprocessed roasted tea, which can be had hot or iced. Other varieties include artisan or flowering teas, called blooming teas, which are beautiful to look at as they actually bloom as they steep, and have a flavour or scent with the design.

People are now looking for more than just a tea with a flavour or aroma. The opportunity is ripe for the tea entrants focussed on developing new varieties.

The Tea Board of India is taking steps at every level to support the organised 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; 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.

The government of India is also taking initiatives by providing institutional support to grassroots innovators and outstanding traditional knowledge-holders from the unorganised sector of the society.

Yuvan Longlife has entered a joint venture with the National Innovation Foundation (NIF), an autonomous body of the government of India’s Department of Science and Technology.

It is focussed on development production and marketing of nutraceutical ingredients and consumer products, and based on a decade of research by NIF, has launched six variants of health teas, addressing such lifestyle conditions as stress, ageing, obesity, diabetes, inflammation and hypertension.

These teas were inaugurated by India’s president Pranab Mukherjee in New Delhi, and were among the 41 innovations of NIF.

The tea market has seen strong growth right across the globe, but the way tea is produced and consumed has changed radically compared to the 20th century. Tea is now traded on the futures market, and is truly a commodity product.

Other initiatives like Tea 2030 (by some of the key players in the tea sector, including the Ethical Tea Partnership; Fairtrade International; Finlays; IDH [The Sustainable Trade Initiative]; Rainforest Alliance; S&D Coffee & Tea; Tata Global Beverages; Twinings, Unilever and Yorkshire Tea) explore the future of the brew in a collaborative project are being taken by working jointly to identify the key challenges, forecasting the issues that need to be addressed and combining their knowledge and expertise to deliver new solutions that would overcome the issues facing the sector, creating a shared vision for what the global tea industry can do together to ensure it has a prosperous and sustainable future.

(The author is head, operations and marketing, Yuvan Longlife Pvt Ltd)
 
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