Outlets like Chai Point and Chaayos moving into the space dominated by coffee chains

25 April, 2018

 

India is a tea-drinking nation and for every cup of coffee, Indian drinks 30 cups of tea, according to research firm Mintel. In 2017, the country consumed 678,200 tonnes of packaged tea, making it the world’s largest market for the commodity.

Chai Point is one such tea point that is funding round is strengthening the brand’s multi-channel go-to-market strategy. Tea retailer Chai Point has raised Rs 132 crore in series C funding, it’s single-largest round so far. The investment, led by private equity fund Paragon Partners, also saw the participation of existing investors likeSaama Capital and DSG.

Chai Point started out in 2010 in Bengaluru and it sells about 300,000 cups of tea daily across its 100 outlets, besides making a large number of deliveries and installing its tea machines, boxC, in offices.

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In the last few years the tea cafe business has caught investors’ fancy s as more urban consumers, with higher disposable incomes, spend on branded cups of the hot beverage.

Startups apart, large beverage companies too have been eyeing the tea business.

In March this year, New-Delhi-headquarteredChaayos announced the appointment of Ajay Kaul, former India head of Jubilant Foodworks, as its chief adviser. Jubilant operates American pizza chain Domino’s in the country. Chaayos, backed by investment firm Tiger Global, also announced plans to add over 300 stores over the next five years, up from the current 50..

In 2015, Mumbai-headquartered consumer goods giant Hindustan Unilever, which sells popular tea brands Brooke Bond and Red Label, opened a high-end tea joint, Taj Mahal Tea House. Then, in 2017, the world’s second-largest tea company, Tata Global Beverages, announced the launch of Chai-Unchai, a tea cafe in Bengaluru.

Tea chains have done a lot of innovation and out-of-the-box thinking around tea and what is also helping their cause is the rapidly changing demographics where younger millennials are seeking such offerings.

And this new set of consumers is willing to spend more on eating out and apart from thatsocializing over tea is moving from street-corner joints to stores, much like it did with coffee. And investors can’t wait for their cuppa.

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