Teabox, founded by Kaushal Dugar, is as much a supply chain company as it is a tea leaf brand. The company has built a robust sourcing process, by partnering with 150 tea growers in India and Nepal. On the consumer side, the company ships premium tea leaves to over 110 countries. Its India business is picking up too, and currently contributes to 10 per cent of total revenues.
In 2012, Kaushal Dugar cracked the code to bringing fine Indian tea to India and the rest of the world. His formula was to compress the process of sourcing, quality control and cold storage in less than 48 hours which protects the freshness of the finest tea against factors like heat, moisture and oxidation. By getting rid of intermediaries, Dugar was also looking to introduce the stodgy Indian tea industry to a new way of doing business.
Even as Dugar knew he was onto something, he experimented with business formats before finally establishing brand Teabox (operated by parent company Asian Teaxpress). The company runs an online platform that sells fine tea priced anywhere between Rs. 5,000 to over a lakh for a kilogramme. Three years hence, the company has shipped tea (to serve close to 40 million cups) to over 110 countries world over. What’s more, Ratan Tata has recognised the company’s promise and invested an undisclosed sum in 2016. “To be recognised by a veteran like Mr. Tata is a real achievement for us. His backing will inspire the tea industry to be accepting of newer ideas to revive business,” says Dugar. In 2015, Teabox received its Series-A of over US$ 6 million in a round led by JAFCO Asia.
Locking in freshness
Teabox holds the freshness of tea closest to its heart and essentially, the company plans its growth in such a manner that the tea’s freshness is never adversely impacted. “One of our most recent additions has been the nitrogen flush vacuum tea bag which preserves the freshness and quality of the tea,” says Dugar while adding that this process is patent pending.
To be recognised by a big player like Tata is a real achievement for us. His backing will inspire the tea industry to be accepting of newer ideas to revive business
For Dugar and his team, communicating the benefits, both in terms of taste and health, of fresh tea is an area of immense focus. “Tea is a commodity that must be treated like fresh produce, and when it is unacceptable to consume fruits and vegetables that are as old as nine months, how is tea any different?” questions Dugar. One of the ways of reaching out and allowing its target audience to sample the difference is by conducting tasting sessions, which the company conducts frequently.
That apart, Teabox has also ventured into offline collaborations at two of Hilton’s properties and opened a retail location called Cinnamon in Bengaluru. “We are exploring an option to feature at Singapore’s Changi airport in the very near future,” shares Dugar. In line with its more aggressive approach to visibility, the brand has revamped its look and feel and commissioned New York-based design studio, Pentagram, to helm this change.
Brewing India’s cuppa
Dugar notes that one of the most surprising things in the recent times has been an upswing in Teabox’s sales within India. For a company that faces stiff pricing challenges in a market that is used to drinking cheaper varieties of tea, nearly 10 per cent of Teabox’s revenue comes from here and in a year, Dugar sees that figure moving closer to 20 per cent. “With a growing disposable income and greater exposure through travel, Indians are willing to pay for a finer tea experience and that is a pleasant surprise,” remarks Dugar.
As the company continues to grow at nearly 3x, Dugar is happy with the progress it is making, especially when it comes to reforming some of the age old methods used by the tea industry that are detrimental to business. “We enjoy better margins and hopefully, other players will see how our technology helps us create better value addition for both the source and the customer,” concludes Dugar.
Insights from Teabox
Supply Chain Approach: At Teabox, freshness is everything as the company has created a backend that is capable of preserving the quality of fine tea in a process that compresses sourcing, quality control and storage in under 48 hours.
Distribution Approach: Teabox has been an online-first company that has grown its digital presence in an impressive manner to create a reach and distribution in 110 countries world over.
Design & Brand Approach: The company has commissioned a New York-based agency to deliver a global design feel to the brand. The company is also exploring a few retail locations to expand brand visibility