Tata Tries Its Hand at Standalone Tea Retail

BENGALURU, India

Tata Global Beverages will open four pilot cafes that may well prove the future of large-scale tea retail is in the tea lands.

Starbucks rather quickly abandoned its large format Teavana tea cafes, and more recently announced it will close all 379 of its Teavana standalone shops. Meanwhile tea giants Unilever and Tata continue to invest in the segment. Unilever owns the T2 retail tea chain and recently purchased Tazo tea. In 2015, Hindustan Unilever opened the Taj Mahal Tea House in Mumbai.

Since 2012, a Tata Starbucks joint venture has opened more than 100 coffee shops across India. Starbucks predicts India will become one of its top five markets globally.

All the Tata Starbucks joint venture stores sell tea, often in significant amounts, a trend also evident in Starbucks in the Pacific Region, where tea sales in coffee shops increased 40 percent in the past year. While Starbucks has settled on a single storefront offering coffee and tea, Tata announced last week it will open 1,400-square-foot Tata Cha tea shops in Bengaluru (Bangalore) on main streets as well as a smaller store and two kiosks. The menu includes cold teas, milkshakes, dunkers, snacks and meals. Tea sells for 75 cents a cup (INRs 50, about double the cost of chai from a street vendor). Meals sell for $1.85 to $2 (INRs 120–180).

Tata Global Beverages opened its first Tata Cha café last week at 12th th Main Indiranagar street near the heart of Bengaluru (Bangalore) India. It is the first of four pilot shops to test the concept.

Sushant Dash, Tata Global Beverage’s regional president for India, told Business Line, “The plan is to open three kinds of formats—large -format cafés on highstreets, an abbreviated 700-square-foot format in highstreets and neighborhoods and kiosks in malls and IT parks.”

Eating out is on an upward trajectory, Dash said: “We want to be a part of this trend and through this pilot launch of Tata Cha want to test our model and feasibility. At the core of this venture is the motivation to enhance the appeal of tea and make it more vibrant for the newer consumer groups like the millennials. “

“The menu is crafted to revive lost Indian recipes that blend warmth with a dash of youthfulness. This includes signature tea-based hot and cold beverages, traditional snacks, dunkers and meals with a twist,” he said. Dunkers are biscuits, dried pastry, or hard cookies to dunk in tea.

In a release, Tata described a menu “with a wide variety of healthy teas like cucumber green tea and sugar-free tangy tamarind that can be paired with oil-free soya kababs to suit every mood. Dilliwali kanji and masala shikanji are some of the local favorites along with meetha paan and rasmalai milk shake, peach iced tea and chili guava ice slush are cold tea offerings. The hot tea range includes Sikkim teas, masala tea and Nimbuda black tea. The food menu includes regional recipes from butter chicken khichdi in the north to creamy veg stew in the south. Indigenous recipes such as chatpata matar kulcha from the north and forgotten delicacies like dal pakwaan also form a part of the menu.”

Tata Global Beverages, the world’s second-largest tea company by sales volume at $1.4 billion, is based in Bengaluru, an affluent and fast-growing city with a vibrant coffee culture. Tata noted that more than 90 percent of the people of India regularly drink tea, which is available for as little as 15–20 cents (INRs 15) on street corners and public transport. The $3.6 billion domestic tea market is growing by 3–4 percent annually, a sign of India’s expanding middle class.

Tata previously launched a chai retail concept in 2009 that failed. The small-format shops, essentially kiosks with limited food, closed within a year. The release noted that based on the outcome of the pilot, “Tata Global Beverages will decide on future course of action for the out-of-home beverage space.”

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