How To Start a Tea Business In India? [A Complete Guide]

. 12 min read
How To Start a Tea Business In India? [A Complete Guide]

Table of Contents:

1. How Much Does It Cost To Start A Tea Business?

2. How To Start A Tea Business In India?

3. Tea Business Plan In India

4. Things To Keep In Mind Before Starting A Tea Business In India

1. How Much Does It Cost To Start A Tea Business?

For Indians, tea is not just a term or a beverage; it is a feeling: an expression recognised in our everyday lives as "Chai". When in our lives did we get hooked to this elixir? The solution to this question may never be known to us. All we know for sure is—we need chai regularly no matter how it became such an important part of our lives. So, the real question now is, are you hunting for a market venture that will prove to you to be profitable? This could be the best place to spend your time, money, and effort—A Chai Company.

2. How To Start A Tea Business In India?

Before taking this step, here is all you need to know

1- Knowing the Herb of Sorcery

The whole tea company relies on Camellia Sinensis, a magical plant that grows over 1000 varieties of tea. The factory needs to be learned by someone who aspires to step foot in the business. Different forms of tea are all harvested from it, including Yellow Tea, Green Tea, Black Tea, Puer Tea, Oolong & White Tea. What makes them all different from each other is the type of products used in their manufacturing. The best way to acquire an awareness of this plant is to visit tea estates and speak with the farmers. The type of evidence you find in books or even on the internet can be surpassed by personal knowledge.

2- Opportunity for Industry

India happens to be the world's second-largest tea manufacturer, next to China. Surprisingly, we Indians consume 70 percent of the output as well. A typical person drinks 2 cups of tea a day on a day-to-day basis. It goes up to 4 to 5 cups for some adults, too. For metropolitan areas, it is not only a fantastic business enterprise but also small towns and cities are also a great platform for you to invest in. This can be tried even by women looking for start-up firms.

3- Identify Your Approach to Audience & Marketing

90% of India's homes drink tea, but does that make anyone your target audience? Incorrect. Your audience and thus the marketing relies on the products of your company. The ease of producing tea, disposable income, increased health consciousness, ability to explore, and aspiration to remain fit are various factors that drive premium tea consumption in India. One needs to find what resonates best with their teas for TDT, which will prompt you to determine the audience and a marketing campaign to increase awareness and sales of the brand.

4- The Timetable

Planning an accurate business model is the most critical move before launching any new business company. The sort of company you want to set up: a stand or a proper tea room, the goods you are going to sell, their costs, your profit margins, your investment number, your investment money, what products you are going to purchase, where you are going to buy them: directly from a wholesale market, you need to know beforehand. The secret to a profitable market would be a proper business model.

5- The Criteria

The specifications depend on the type of start-up you want to establish: a small tea stall or a cafe. You don't need too much of an investment for a small start-up like a tea stall, or you need costly material to put up your stall, so the entire point of a stall is to keep as linked as possible to your 'desi' roots. To get you started, an investment of INR 50,000 is enough. On the other hand, you need more of an investment for a more genuine establishment like a tea bar or cafe. The number will go as big as 30 lakhs for metropolitan cities. To make the cafe or bar more aesthetic and genuine, you need to invest in the interiors, the decor, the machinery, other materials.

6- Packaging Goods

A key aspect of both distribution and marketing-the packaging of the goods will play a significant role in shaping customer choices. Packaging touches the 5 senses of a human being specifically and will add greatly to the sales of the brand. It comes as no surprise that today's manufacturers expend over $150 billion annually worldwide on food packaging. 52 percent of buyers look at repurchasing their goods whether they like the packaging, according to a survey, and 90 percent favour re-using the packaging of the product.

7- Margins on Gains

The investment and the expense of a cup of tea per day are as follows: Rs 1 per 30ml of milk; 2.5 grams of powdered tea- Rs 0.755; 10-gram of sugar- Rs 0.50; Masala Tea 4 grams- Rs 0.30. A cup of tea will cost you about 3.5-5 INR, even after adding added costs to this. You have a profit margin of around Rs15 when you own a stall and sell a cup for 10-20 INR. You should concentrate on improvising them until the goods are well known in the market. Introduce multiple types and variations of tea according to the consumer base's feedback.

Start serving snacks and light food to go with the tea. You should also think of creative projects, such as transporting trucks around the city or delivering courier facilities, until you have accumulated enough money. You can start a tea shop company in India and get invested in it now that you know everything that you need. You have an incredibly lucrative niche: the tea business, something that doesn't need much investment and expertise. Just get started, and who knows, maybe you'll even be the next Prime Minister.

Also Read: Tea Brands in India

3. Tea Business Plan In India

If you are confused about how to draft a business plan for a tea company, let us clear your doubts. For a tea stall owner or franchise business owner, a well-drafted business strategy for selling tea is also important. The business strategy outlines the history of the organisation and all the business specifics and associated operations that will further assist in obtaining funds or business loans from financial institutions.

The financial institutes include private or public sector banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), or Small Finance Banks (SFBs) during any business tenure period. Your Tea Business Plan should also provide information on investment in-

  1. Working Capital
  2. Budget
  3. Labour/worker/employee statistics
  4. Marketing
  5. Promotional campaign specifics (for franchise business)
  6. Equipment/machinery used
  7. The number of raw materials used

4. Things To Keep In Mind Before Starting A Tea Business In India

Tea is believed to be one of the oldest beverages in the world. Before you get caught up between random opinions, discussions, accountants, lawyers, or similar field entrepreneurs jot down the basics. Learn these things before curating a tea business plan in India:

  • Understanding Camellia Sinensis- Any person entering the tea business in India needs to learn about this plant. Various teas like- Green Tea, Yellow Tea, Oolong Tea, Puer Tea, Black & White Tea are harvested from it.
  • Recognize Your Focus Competency- Defining your brands USP is primary in any tea business in India. Curating premium blends and flavours will increase your potential in the market along with good profit margins.
  • Define your Target Audience- Your audience might be most of India but curating a special marketing approach will help you cater to the masses easily.
  • Product Packing- "Jo dikhta hai woi bikta hai" or what you see is what you buy approach works best in India for most businesses. Attractive packaging influences consumers decisions.
  • Storage & Procurement of Teas- The customs officials in India are still not well versed in various forms of tea. This leaves them suspect for the procurement process. It's important that their handling is done carefully to ensure that they're not infested with insects until delivery.

Also Read:

1) What are the Best Ways to Think of Ideas for a Startup?
2) Should Agricultural Income be Taxed in India?
3) Best Home Business Ideas
4) Best Green Tea Brands in India

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Q. Is tea business profitable in India?

Ans- Yes, The tea business in India is definitely a profitable business in India. It also depends on the types of teas you're producing or selling in the market. The profit margin can vary on your distributor and your market value.

Q. How can I start a tea trading business in India?

Ans- Answering the peak pointers on how to start a tea business in India, follow these specific methods to success:

  • Curate a proper business plan
  • Find target customers
  • Conduct market research
  • Register your business officially with the authorities
  • Legalise your Tea Business
  • Complete your GST Registration and Micro-Small and Medium Enterprise (MSME)/ Small Scale Industry (SSI) registration.
  • Obtain a Trading License
  • Get an FSSAI(Food Safety And Standard Authority Of India) License.

Q. How much does it cost to start a tea business?

Ans- To get you started for a tea business in India, an investment of INR 50,000 is enough. On the other hand, you need more of an investment for a more genuine establishment like a tea bar or cafe. The number will go as big as 30 lakhs for metropolitan cities.

Q. How much a tea seller earns in India?

Ans- A good and reputed tea stall or shop can smoothly earn a profit of anywhere between Rs. 40,000 to Rs. 1,00,000 in India per month.

Q. Can I make my own tea and sell it?

Ans- It'll be difficult to curate your tea brand due to immense competition in the market. But you can always contact local or domestic drop shippers to get access to tea sourcing products. You can also get in touch with a private label supplier to generate a unique UPC code for product packaging and selling on eCommerce platforms like Amazon.

Q. Does Tea need FDA approval?

Ans- Yes, absolutely. There are specific and various labelling and packaging requirements for the tea business in India. If your brand is organic you will also need USDA certification and seal to sell in the market.

Q. What is the rarest tea?

Ans- Da Hong Pao- A Chinese Tea variant tea that is harvested via ancient 'mother trees' or the oldest forest trees is the rarest tea in the world. It has a heavily oxidised and a mellow smokey flavour to it.

Q. Why is green tea so expensive?

Ans- The delicate processing method, production, and quality are what makes any green tea so expensive from the average or mainstream ones.

Q- How should one procure and store tea?

Ans- To guarantee the success of your tea company, there is a serious amount of backend work and logistical support required. While finding the right teas from the right estates is important, it can be all the more challenging to procure them and get them delivered to sale in India. E.g., green teas have a 110 percent duty imposed on them. The customs officials in India are still not well versed in the various forms of tea. This leaves them suspect and all the more complicated for the procurement process. It is important that their handling is handled carefully to ensure that they are not infested with insects until the teas have been delivered here. Many teas, particularly mint, tend to get infected quickly.

Q- How should I market my tea brand?

Ans- The quality of the goods you serve is one way that people get to know about your brand. You also continue to get the respect you deserve even after this. Do not start with major prizes for this. First, intend to build a stable client base, and send out leaflets and ads to let individuals know the sort of services you offer. You should also offer clients discounts.

Tea Business In India

Q- What is the most important thing to consider before stepping into the tea business?

Ans- Passion drives endurance and gives you the ability to practice and work to become more professional in what you do. More essential than anything else, it allows you the opportunity to concentrate. If you're serious about developing your ability and acquiring the emotional justification to hold your head up through the downs, then because winning is enjoyable, you have a shot at enjoying your career.

Q- What are the permissions and licenses needed for starting a tea business?

Ans- There are also permits and licenses to be received from the respective authorities to authorise the business such as-

  1. Finalising a name for tea business
  2. Company registration
  3. GST registration
  4. MSME/SSI registration
  5. Obtaining a trade license
  6. Getting the Food Safety and Standard Authority of India (FSSAI) license.