Strategy model for tea bar chain

Abstract

Indian tea consumption accounts for nearly 30% of the global output. The earliest records of tea drinking date back to the 12th century. Today, it is often the first beverage in the morning, and also the first offering to any guest. People even drink tea on the hottest days of summer. Unlike internationally served tea, Indian tea is mostly consumed with milk. There are many other quirks in Indian tea habits, which make consumption behaviour very different compared to rest of the world. Tea is consumed at home, or in small stalls. Still, it is not a favoured item on the menu of most beverage chains. Very few of the popular chai joints are in the premium or masstige level. People flock to little cafeterias, where they get tea in cheap plastic cups. However, there are few places where you can get many varieties of tea in an attractive ambience. It is not surprising that while there are a few solo shops or small chains like Chai Point and Infinite, none of these match the penetration and popularity of Coffee Bars. Some of the questions the project aims to answer are: Has drinking coffee become a sophisticated pursuit, and, hence, is it popular among youth and aspirers? What is the consumption behaviour of Indian tea-drinkers? Are the existing tea bars unable to target the right segment? What is a suitable model for a chain of Tea Bars? In India, tea is an essential item of domestic consumption and is the mostly consumed beverage. We can see from the consumption patterns that, per head consumption of coffee in the country stands at a paltry five grams per year whereas the statistics for tea are an impressive 650 gm per head per year in the country. In India, tea rules the homes, while coffee rules the streets. National chains specializing in hot beverages exist all over the country, but they serve coffee, not tea. The success of coffee chains in India, has spurred tea makers to launch similar cafes selling a variety of teas, with the added advantage of being considered healthy. At the national level, the modern phenomenon of tea bars is mostly confined to a few players in metros. These are still early days for the tea bars in India where only 40 to 50 of them exist in the country today, compared to around 1,800 coffee cafes. Though some players have begun to organize themselves, the market is still largely unorganized. Considering the large Indian population and the universal appeal of tea among Indians of all age groups in all parts of the country the opportunity is clearly enormous.