Typhoo Tea scouting for franchisee partners to set up ‘experiential cafes’

Typhoo Tea, the branded tea business of the Kolkata-based Apeejay Surrendra Group, is scouting for franchisee partners to set up ‘experiential tea cafes’ in metro cities such as Mumbai, Delhi and Bengaluru. Based on the success, the model can be replicated in other cities.

The move will help increase brand recall (of ‘Typhoo’) and according to Subrata Mukherji, Business Head, Typhoo India, there will also be greater consumer awareness about different flavours such as herbs and green tea, and so on that are offered by the company.

“We plan (to have) cafes (which act) more as experience centres….(and) are looking for right franchisee partners. The focus is on promoting and creating awareness about various flavours,” Mukerji told BusinessLine .

When it comes to hot beverages, coffee has been a more attractive option and is growing at a faster rate, he said. The same has neither happened for tea nor are there too many exclusive tea cafes.

Growing market

The basic tea industry, which include black tea, is going through a tough patch and price realisation has not kept pace with increase in cost of production. But, the branded or speciality tea has not been affected.

Typhoo offers flavoured tea, green tea and herbal tea in the organic category in tea bag format through the eponymous brand. It also markets some black tea (bags). Market for tea bags is estimated to be close to ₹700-800 crore and has been growing at around 10-15 per cent. Of this, some ₹400-500 crore is the mass market for black tea, which goes into offices and so on.

The ₹30 crore-odd Typhoo holds around one per cent of the branded black tea market or ₹4-5 crore. The remaining is driven primarily by green tea and new premium categories such as herbal,organic tea and fruit infusions.

“We are more into the premium category. We do not pursue the black tea segment because it is highly price driven and margins are under pressure,” he said.

The company is expecting an over three-fold jump in sales of around ₹100 crore in the next two years, backed by more product launches in existing categories and increased geographical distribution. Organic tea and herbal tea have been growing at a faster pace.

Geographically, it is present is 7-8 cities (mostly Tier-I) while new ones being explored include Ahmedabad, Surat, Rajkot, Nagpur, Aurangabad Jalandhar, Ludhiana, Indore and Bhopal.