‘Opportunitea is calling. Tea Trails is looking for franchisees.’
That’s the slogan of Mumbai-based tea start-up Tea Trails Cafes as it tries to scale up its franchisee count from 8 to 500 within the next three years.
In the past few months, a slew of tea start-ups such as Chai Point, Chaayos and Tea Trails have raised funds to expedite their retail presence even as big FMCG companies struggle to make an impact through their tea cafes and lounges.
“FMCG players do not have the mindset for running premium tea cafes. It is not their cup of tea since most consider it as a branding exercise,’’ observes Uday Mathur, Founder Tea Trails.
He recently raised $1 million from angel investors for the expansion drive.
While coffee dominates the ₹2,200-crore café segment, tea is soon expected to overtake with retail start-ups rapidly expanding into the segment. “India is the second-largest tea drinking country with the ₹19,500-crore tea industry growing at a CAGR of 25 per cent.
“Tea is consumed 10 times more than coffee.
“Yet, at the moment, it is the 4,000-odd coffee cafes which dominate the segment. There is a huge opportunity for tea-based start ups,’’ added Mathur.
Failed foraysFMCG companies such as Tata Global Beverages tried tea retailing in the past with its Chai Unchai outlets which were subsequently shut down.
Regional tea companies such as Wagh Bakri and Girnar also ventured into the tea retail segment but have not been able to make a significant impact.
Now it is the turn of the nimble-footed tea start ups to try and give a leg up to the segment. Tiger Global-backed Chaayos recently raised $5 million with plans to expand from 10 to 50 outlets within a year.
The two-year-old start-up expects to beat the FMCG companies that have dabbled in this segment.
“We will take over from the big boys of FMCG for whom it is a branding opportunity to sell their beverage brands.
“It is not their bread and butter business unlike start ups like us who are fully focussed on the tea retail business,’’ says Nitin Saluja, Co-Founder Chaayos.