We are extremely bullish on Ready to Drink (RTD) teas: Karan Shah, Director, Amar Tea

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We are extremely bullish on Ready to Drink (RTD) teas: Karan Shah, Director, Amar Tea

By TPCI | November 28, 2019

Amar Tea started as a small scale wholesale business back in 1924. Today, it has risen to become a dominant player with around 40% market share of packaged tea in Maharashtra. With a wide range of high-quality tea, which has stood the test of time, Amar Tea Pvt Ltd (Society Tea) is busting the myths associated with Tea as a commodity, thereby widening its consumption among more diversified masses; far beyond the elderly ones.

Quality and trust are the cornerstones for Society Tea. Being so stringent about the quality, the tea firm went on to establish a dairy factory all together to ensure the procurement of right quality of dairy products, which are a pre-requisite for the tea industry. Apart from instant tea premixes and one-minute tea, Society Tea has also diversified into other arenas as Chutneys, Pickles and has also established a tea café named Tea Terminal.

Talking about the glorious past and also the future strategies to evolve in the business further, Karan Shah, Director, Amar Tea Pvt Ltd (Society Tea) converses with IndusFood and unveils his plans to explore strategic export targets exclusively through the 2020 show.

IndusFood: When and how were the founders inspired to ideate & set up the brand Society Tea? How has the journey been?
Karan Shah: My great-grandfather Hiravan Pranjivandas started as a tea wholesaler in 1924, in Masjid Bunder's Chai Galli. This street was Maharashtra's source of tea, with traders coming in from across the state to purchase tea to sell locally. Apart from being a large supplier for local customers, Pranjivandas also firmly engraved its roots in the international tea trade, trading with Middle Eastern countries on a very large scale. In 1933, with a view to sell to the Mumbai citizens as well, he started Hasmukhrai & Co, with its first shop in Kalbadevi.

By the late '80s, Hasmukhrai & Co had become the market leader in the tea industry in Mumbai. However, sensing that the customer would prefer convenience and would change traditional tea buying patterns, we launched tea in a packet form in 91, which was available across retailers in Mumbai and later Maharashtra, by the name of Society Tea.

Today, Society Tea is one of the top players in the tea category in Maharashtra and has become a dominant force, with around 40% market share of packaged tea in the state. The brand now aims to target a wider age group and move away from the idea that tea is confined to the middle-aged and older folks.

A quarter of a century ago, we were faced with a tricky decision. In advertising, colour is known to have a powerful psychological impact on people’s behavior and can often be the sole reason why someone purchases a product. Red creates a sense of urgency and encourages appetite and is thus frequently used by FMCG chains, while green promotes nature and peace. Dismissing market research, however, we painted Society Tea blue - A color used to provide a sense of security and stimulate productivity – Elements that are encompassed into the brand's core philosophy till date.

IndusFood: What transformational changes has the brand undergone in terms of products, innovation, facilities, revenue etc. since its inception?
KS: Quality and trust are the cornerstones of Society Tea. The brand has always been at the forefront in providing consumers with products that stand out in their features and quality. Having been in the industry since 1933, our quest for better quality has led us to create a range of high-quality tea, which has stood the test of time and the journey has been fulfilling.

At Society tea, we have expanded our product portfolio with a variety of products and are still adding to the bouquet. In terms of product, we have a range of green tea & herbal tea, which caters to the healthier lot. Iced teas are usually consumed by Gen Z, who also happen to be the decision makers for the category along with the regular CTC, leaf tea, dust tea etc.

We are also bullish about one-minute as a category. We have two products in this segment (One-minute tea & One-minute coffee) with six variants under the two categories and are working on more launches over next one year.

We are extremely quality conscious and were not satisfied with the quality of dairy whiteners available in the market, which is a key ingredient for One Minute Tea. So to keep a close check on the raw materials, we ventured into dairy and set up our own factory at Baroda. This state-of-the-art plant manufactures products under strict hygienic standards to meet the highest levels of quality and excellence.

Chutneys and Pickles have always been an age-old accompaniment to Indian cuisines, agnostic of which part of the country you go to or the language you speak. With this as a backdrop, we have launched a Chutney & pickles brand, Spice Secrets, which caters to this need, while recreating the magical taste of grandmother’s secret recipes for its new-age consumers.

Lastly, we have a launched a sprawling 2,200 sq ft café – Tea Terminal - because we believe it is the right time to have a great cup of tea.

IndusFood: How has the brand expanded in the international front? What are the key market areas where you currently export and find much demand from? Also, which could be the countries you wish to tap through IndusFood 2020?
KS: Society tea came into existence in 1991 and we set foot in international markets in 1995. UAE was the first market we explored and we have never looked back ever since. We enjoy a good hold over UAE with all existing SKUs & certain export-specific SKUs. Apart from UAE, we also have presence in US, European & African cities.

Our products are also available in certain Asian markets through indirect supply, which means we do not have established channels, but our products are available due to organic demand generated in these markets. Asian markets are a great opportunity for us and we would definitely love to explore them through IndusFood.

IndusFood: What has been the role of R&D in your growth & success? Is there any recent product innovation you wish to share with IndusFood? Are there any product launches scheduled in the near future?
KS: R&D plays a major role in growth of every industry irrespective of the sector and that’s true for us as well. Along with creating new products and adding features to old ones, investing in R&D connects various parts of a company's strategy and business plan, such as marketing and cost reduction.

R&D at Society Tea mainly focuses on:
• Launch of new products keeping in mind the changing times
• Improve the existing ones in terms of inputs/raw-material
• Cost reduction measures without cutting down on quality.

One such example is our latest launch, Cleanse, which comes from an extensive research & data that we have accumulated from our channel partners. Furthermore, in terms of upcoming launches, we are working on multiple products across categories. We are extremely bullish on Ready to Drink (RTD) as a category. Like I said earlier, RTD will be the next big thing as people are leaning more & more on convenience given their hectic lifestyles. We are looking at some innovative premixes, which we will focus on in the coming year. Another category we are exploring is CTC with herbs or herbal blends.

IndusFood: Can you mention any changes in the consumer behavior pattern in India and globally? Are there any new trends underway in the world of taste?
KS: A study conducted by the Tea Board of India revealed some interesting consumption patterns among Indian tea drinkers:
• About 80% tea drinkers in India consume it either with or before breakfast
• The eastern states of India especially West Bengal have a remarkably high-tea consumption when compared to North, West or South India
• Tea is regularly consumed in about 64% of homes in India and by 96% of the family members residing therein
• More than 80% Indians prefer their tea with added milk
• About 70% of Indians prefer buying tea from local grocery stores

While these have been true for India as a market, we have observed some drastic shifts picking up in the country. Two major trend for the coming year are rise in:

RTD Teas:
There was a time when RTD or Ready-To-Drink Teas suffered from a bad image, labelled as an unhealthy alternative to traditional tea. However, it has undergone a complete makeover. The market for RTD teas has grown at a healthy rate since 2011. While the most famous flavors in the market are mint and lemon, other blends include various spices, flowers and fruits.

Herbal blends:
While green tea now enjoys good awareness levels and is fast catching up, Herbal blends are on a rapid rise too. Teas infused with flavors of ginger, tulsi, mulethi, stinging nettle tea etc. are known to boost immunity, fight against cancerous cells and soothe throat troubles. Not just this, but a warm cup of tea will help you fight against cavities, which is great for your oral health.

IndusFood: How do see the placement of Indian tea in the global palate? What is the potential in terms of exports?
KS: India is one of the world’s largest consumers of tea, with about three-fourths of the country’s total produce consumed locally as per Tea Board of India. As of 2016, India was the second largest producer in the world with production of 1,267 million kg. The country is home to a wide variety of teas, including CTC tea, orthodox tea, green tea and organic tea.

IndusFood: Have you participated in IndusFood earlier? Please share your experience.
KS: This is our first time at Indus Food & we are hoping to build a productive & sustainable relationship.