• Spice and Tea Synergy

    Vahdam Tea founder Bala Sarda is launching a new line of 25 Indian spices grown free of adulterants and pesticides and manufactured without artificial colors. Initially, Vahdam spices will be sold directly to consumers and later offered in grocery stores.

    Listen to the interview
    Bala Sarda talks to Aravinda Anantharaman about spicing up his tea line
    Vikas Khanna & Bala Sarda
    Chef Vikas Khanna and Vahdam Tea Founder Bala Sarda

    Bala Sarda’s Vahdam Tea turned eight this year. From launching Vahdam as a brand that connects tea drinkers with producers to a range of superfoods with turmeric, moringa, and matcha, Vahdam’s journey has been about an Indian brand offering consumers across the world what they want, direct from the source. The latest addition to the brand is a range of Indian spices, now offered not unlike their tea. We talk to Bala about the new launch and what it means for Brand Vahdam.

    Aravinda Anantharaman:  Thank you, Bala, for joining us here at Tea Biz. I know it’s a busy time for you. But first, congratulations on all the developments and in particular the launch of Vahdam Spices. How did that come about? And how does that fit into the larger Vahdam Brand?

    Bala Sarda: Thanks, Aravinda for having me on the show. Excited to be here. I think this is just to give you a sense of our vision and our dream with which we are trying to build the brand, right from the early days that I started this almost eight years back, in 2015. This month will actually turn eight. And from day one, I think one of the key things we identified, Aravinda, was this incredible opportunity, which India as a country offers. I think if you really look at a product like tea, as we all know, India is one of the largest producers and exporters of tea in the world. In fact, almost a quarter of the world’s production of tea happens in India. You look at tea-growing regions like Darjeeling, Assam, and the Nilgiris, these are GI indications, right? Just like Champagne and Cognac in France. I think we genuinely know that there’s a consensus among connoisseurs that India grows the finest tea in the world.

    We looked at a category like spices even early on, where, if you look at the stats, India is the largest producer and exporter of spices in the entire world. We have the largest variety of spices we make as a country. If you look at some of the more popular variants of spices, say turmeric, 80% of the world’s turmeric is actually made in India and the list goes on and on. Yoga, Ayurveda… there is so much India has to offer and I think, very early on, we realized that all these products are being exported from India at single-digit margins. There is no Indian brand or there is no brand at origin, which is, adding value and taking this product to consumers in global markets. There is no innovation in the category, Of course as we know right supply chain was extremely broken. There were multiple middlemen, right from a farmer in India to consumers sitting even across the world And that just told us that there is an opportunity for us as a brand to solve and make available a much better higher quality, fresher product to consumers.

    Lastly, and most importantly, tea is also, the largest employer of labor in India. You add spices to it, this is potentially the largest employer of organized labor in India. And India is the most populated country in the world now, according to some stats. I think this is a massive, massive industry we are talking about that has been, plagued with stagnancy right? The farmer’s costs have not gone up, and the prices of tea and spices have not gone up. Everybody wants to come out of this industry. Estate owners want to shut their estates down or sell them even though this is such an amazing business on the consumer-facing side of things. This is such an integral part of consumers’ life in all these markets. And I think the biggest reason for that again was that there was no value addition. And there was no homegrown brand, which was taking it taking it to the world.

    So, just like tea, where we said, hey, can we cut down the middleman, source direct, process it, bring innovation to the product, to our supply chain, and make available a much better product to consumers through the power of the internet? I think the crux of everything we do at Vahdam is the internet. I think it’s truly democratized global consumer brand building because today’s sitting out of India, a brand like Vahdam can you know, can sell to over 3.5 million consumers globally, which I think was unimaginable right before the internet came in. So of course, the bedrock of our distribution is the Internet.

    So when you combine all of this, the gap in the market, the opportunity to make available a better product plus obviously a strong differentiated brand story, that is obviously high trust with origin brands, you know all French wines, Scotch, chocolates, anything and everything that we’ve grown up, believing that origin products are more trusting And third is the internet is how we sort of built business in tea for the last eight years.

    That said, I think we were fortunate to have a tremendous response, And I think there were two, or three signals, which got us to get into spices. First of all, Aravinda, a lot of our teas have spices as an ingredient in them. In fact, a lot of our herbal teas that don’t have tea, it’s basically a concoction of different spices. In addition to that, we launched this very innovative range of turmeric teas back in the day in the US which is widely popular across markets.

    Very early on I think a lot of our consumers started emailing me and telling the team that while they love the quality of our spices and they consume tea, they do not have an alternate option, which is as good when they want to, use it for say, lattes, for their cooking, for curries so on and so forth. And that got us thinking that there is a tremendous opportunity even in the spices market for applications, which is non-tea, right? So that is something we’ve been receiving as customer feedback for the last three years, if not more.

    Second, if you look at the brand, Aravinda, the long-term vision of Vahdam is to take the best of India to the world, right? Going back to why we started, what we are doing with Vahdam was, can we take the best of India to the world under a proud, ethical, sustainable, homegrown label? After getting some stability in tea, if I can put it like that, we said, hey, what’s the second category we can get into and you know, probably create an impact near to what we are trying to do in tea? This is what has got to think of spices as a very, very natural progression, right?

    I’ll give you a small example. We did this brand study to understand what consumers think of us selling spices. A lot of those consumers thought Vahdam is already selling spices. So, that just tells you that the perception was always this is a brand, which is bringing the best of India to the world, and that again, you know, just reinforced our, our vision of, getting into spices.

    And lastly, and most importantly, I think, over the last three years, we have spent a lot of time like tea in building the supply chain. We work with a lot of direct farmers, and cooperatives. Unlike tea, I would say spices are slightly more disorganized. You will see a lot many smaller farmers versus, you know, like a Darjeeling is 87 estates. So I would call it organized versus, you know, somebody growing tulsi to see in Utter Pradesh, you know, there will be thousands and thousands of farmers doing that, right? So bringing them together, with the consistency, the quality… Of course, it’s a product, which is exclusively available outside India. So obviously there are several parameters around the use of pesticides, the product being organic, the product being pesticides and toxins free, right? So I think we spent a lot of time over the last three years or more. In fact, because of tea, we had started using it, but we got very, very serious about it in the last 24-36 months in the spices categories as well. And then we were sure that we have something that we can scale is when we decided to you know, finally get into spices around our 8th Founders Day.

    Kitchen Essentials
    Kitchen Essentials line

    Aravinda: You talked about the supply chain innovation, you talked about the product innovation. So what were the lessons you were able to bring from the journey you’ve had with tea into spices?

    Bala: I’ll start with product innovation. First-time entrepreneurs can be very naive and I’ll be very, very honest with that, right? Sometimes you think you have, you have created a product. And there is a demand for that. One of the things which I learned in my journey at Vahdam Teas, building the tea category which we still, I think it’s still very, very early days and we’re still building that, so, don’t get me wrong there, but I think was, how do you listen to your customers more, right? So here I think instead of believing what we can make available to customers, which is what we did with tea in the early days, here, everything was customer-driven.

    The signal for us to get into this category came from customers which we, then obviously took that signal, went very deep, probed our current customers, and did multiple studies in the market to first, understand: Should we do it? If we do it, what are the kind of products we need to do? What are the real challenges in this category? And then we identified trust as a big deficit. There was a big trust deficit, especially for products coming out of India. You would have a foreign label branding it is as packed in America. Obviously, the tea, the spices being Indian, which was still being accepted. But, again, like what I saw with tea early on as well, right, we saw that with spices. We, very early on, realized that, how do you build amazing trust with the customer and you know he is going to be super critical around, everything we do. And of course, having the Vahdam brand equity made a big difference in helping us do that.

    But from a product side of things, I’d like to give you a small example. We work with organic-certified farmers across India. Most of our spices are certified organic whichever can be and we will try to keep it that. Despite the fact that we also want to work with a lot of small farmers who on paper have absolutely toxin and pesticide-free products but which time we potentially certified organic because if you have one acre of land just the cost of certification is so high. So we also want to support them. We build trust by, you know, ensuring that all our spices are tested in European labs, which are considered to be the most, the highest standards in terms of testing parameters and just the sensitivity of that instruments around the product. So I think a lot of these things were, very, very critical to us getting to the product. And what’s our brand positioning, what’s our go-to-market? What do we communicate to our consumers? And I think that that’s the one learning, I think all of this, we did was actually based on all our learnings you got in the tea category and things we went wrong or fumbled rather several times in our journey, building the tea category, that would be number one.

    And on the supply chain piece, I think, Aravinda, I think, to be honest, I believe it’s a playbook we are trying to build, right? If you look at tea and spices, I think the only fundamental difference was that spices were a slightly more tougher and disorganized category, versus even tea. But I think the principles of our supply chain, which is, how we ensure we source direct from farmers. How do we cut out middlemen? How do we ensure that we sort of address the fragmented supply chain?  How do we ensure that there is enough no matter where you source it from?

    All our spices are packed in our own facility. Like tea, we source, process, blend, and package 100% of our spices within our facility today. It’s BRC Certified A grade facility in the NCR region near the Delhi airport and ships it out to consumers.

    Investing in the supply chain early on can give you long-term results is again, something we knew very, very closely. So I think broadly no real learnings in the supply chain piece because that’s really what we had done. Probably right in tea and… you know just how do you scale that up and do it in slightly different categories is really the challenge we are addressed since the last 24 months.

    Aravinda: Why have Indian spices not been marketed as single-origin spices? Is it because it’s also a commoditized segment?

    Bala: Two reasons. I think one definitely I think it’s been very, very commoditized. The category, the product has been extremely commoditized over the years, even though it’s an amazing, such an important part of our lives. It adds flavors, spice, and so much life to your kitchen, to your food, and to everything you consume right. And a lot of things that don’t even come on that level of impact in your life still have been marketed better. I think it was just about somebody, you know, taking that step and trying to, at least market the product better. And, that’s really, the first understanding we had. That it’s a commoditized market but it’s very, very important to the consumer, which means that has the potential to sort of create a differentiated brand positioning in this category. And that’s what we really trying to do.

    And second, I think India grows the best spices in the world. I think that is absolutely no doubt. Again not because I run now, a category of spices through our brand, but I think if you compare it, I think there’s a general consensus among chefs all over the world, among food connoisseurs, and enthusiasts that the flavor, the aroma, the density of oils, just the quality of Indian spices is phenomenal. And when that is there, I think it makes sense to help market the origin. Why can’t a Lakadong turmeric not be as popular as the Darjeeling first flush or a Kerala cardamom or a Telicherry black pepper be as popular as a black tea from Assam? I think it’s it all comes down to making that high-quality product available, consistently branding, it positioning it and just ensuring that there is trust and trust is built by just doing the right thing several times over and over right for several years. That’s really what we vision to do with spices. And I think if we can do that, I believe, Indian origin spices can really stand, gather a lot of real estate even in foreign retailers and of course most important in the minds of our mainstream consumers in these markets.

    Aravinda: The Western market is an important focus market for you, isn’t it? When will you launch spices for India?

    Bala: I think on a lighter note. I think, like our strategy, the 24 hours a day has also been consistent and that is not changed. So I think it is just a matter of, to be very honest, I think it just been a matter of focus. Like tea, right? It was always about when we will do India rather than if we will do India. And I think just give him the bandwidth, the depth of the market, and the impact we can potentially create with the time and the resources we have as a team. We just realize that it is more efficient and more effective to sort of focus on some of these markets first. And that’s really what we did with teas. And that’s exactly, you know, what we are trying to do with spices as well. But that said, I think, you know, once we are able to get some understanding we are able to create some impact and foreign markets. Of course, we will end up coming and launching in the India market also, hopefully soon.

    Aravinda: Has the choice of people you’ve sought for brand endorsements and partnerships been about building trust? With spices, you have Vikas Khanna. What was the thought behind this partnership?

    Bala: This is our first – I don’t even use the word commercial because Vikas is genuinely and truly a fan of Vahdam. He was our consumer even with teas and when he got to know about spices, he was like, we have to do this together and we sort of collaborated, even though there is a commercial collaboration to a small level there. But before that, till today, I think every endorsement right from Oprah [Winfrey] to Ellen [Degeneres] to Mariah Carey, Nicole Scherzinger very recently, these are 100% organic or revenue share partnerships where these more people who were fans of the brand and that’s why like I said. And we’ve been very lucky and fortunate to have been able to get our products to them. And them appreciating the brand, the story, and everything we are doing. And so that in tea, all these partnerships you see are 100% organic and I can say that on the record because they are. With spices, as I said, we were very sure that it is a category that is foreign to tea, right? Vahdam is considered as a tea brand and we’re doing that transition. So I think to sort of put that message out, we wanted a slightly higher impact, in terms of knowing the kind of people we can reach and the noise we can create. And that’s number one.

    Number two, as I said, I think trust is very, very important, to the entire process, right? And a Michelin Star chef, a MasterChef judge is launching a brand of spices, which is native to his country, I think stays a lot somebody who’s been pretty much approached by any and every country and every spice company in the world, or at least from India.

    And then third is, I think no better way, you know, to take Indian spices to the world with the man who’s actually, who’s been at the forefront and the flag bearer of taking Indian cuisine, Indian aromas, you know, to a modern consumer and to the mainstream audience in markets like the America right? Like the US. I think absolutely, you know, no brainer for us to work with him and you know and we hope you sort of continue this partnership for a long-term basis.

    Q6: How will the spice segment expand? What’s in the pipeline?

    Bala Sarda: I’m in the firstly very, very excited to be doing this. I think it’s an incredibly large opportunity. We are very, very passionate about taking India under a proud, ethical homegrown label to the world. And, you know, I think, and taking it to consumers, with spices, we can also get much more from a consumer’s day because you spend so much more time cooking and eating your food. So, I think that’s, that’s really very, very exciting for us. And, driving us to sort of do this and try and make this successful but from our from a product perspective like I said, right? We’re coming out with almost 20 to 25 single-origin spices in the first phase, that’s really what we’re doing. So the best of Indian single-origin spices, right? From your turmeric to ginger to black pepper, clove any, or every spices you spice you can think of. Right from Himalayan rock salt. A chili powder from some several, several spice-growing regions in India. And in addition, to that, in the next phase, you will see a lot of spice mixes and seasonings coming from our portfolio, which is basically a pre-made concoction. I think it’s gonna be the same spices we’re selling a single origin but you know for people who like their spices in a certain ratio as a certain concoction you know our spice blends and our spice mixes right from a chai masala to a lot of these Indian taste to even some very modern American flavors, you know because ultimately the application needs to be for an American or a European and a mainstream consumer to actually use it in, in his or her daily life. So you will see a lot of that also, coming from us. And lastly, it’s very important to position the category in a certain way I think for far long, I think, the spices category has not been disrupted, and the spice box is still a very boring part of your kitchen. We want to sort of enlighten that. We want to make it colorful, we want to add a lot of color, brand, and storytelling to that. And you will see you know, assortments and gifts and all of that also coming from our portfolio, like what we did with tea,  to sort of just ensure that, consumers perceive this product in a much better way than they do today,

    The dream rather is to actually create this platform of high-quality Indian products. Create an entity, create a brand that is really trusted, which is consistent, which is, which is as per global brands. Taking India as a brand and making that more trusted ultimately is really, what makes us very, very passionate. Obviously, it’s a great feeling when you see an Indian brand selling in a Bloomingdales or a Whole Foods Canada or a Sprouts Farmer’s Market, which is packed in India, from India. And I think that’s really what drives us every day. So, I think, like tea, spices are an absolute Indian category, and we deserve a global player creating impact in this category, not only in the US, not only in Europe, but pretty much all countries globally. Because like I said, 80% of the world’s turmeric comes from India. Most of the world’s ashwagandha comes from India. And these are, these are life-changing spices. These are spices, which can help you live a better life, better lifestyle, your mental health… So, there are also a lot of strong wellness connotations attached to spices like tea. I think it’s just very exciting for us to take this, from India to the world. And we will do everything it takes to make this available to consumers and hopefully make it worth their while.

    Aravinda: There was tea, then there were superfoods, and now spices. Is Brand Vahdam a story that’s still being written?

    It is, Aravinda. I think we’re probably in the second chapter, and probably hopefully it’s a longer book than we would also imagine. I think one step one step at a time. And I think for us, two critical goals are – how do we ensure everything we are doing in tea and how do we go deeper in that while at the same time we make spices a success. From our product market fit perspective, this is really what we are focusing on this year. And hopefully, you’ll see more coming out from our umbrella over the next year or so.

    Download Vahdam Spice Booklet (PDF)
  • Sinna Dorais Bungalows Balance Comfort and Old World Charm

    Sinna Dorais Bungalows - Kadamane Tea Estate
    Sinna Dorais Bungalow. Photo by Preetam Koilpillai
    Narrated tour by Aravinda Anantharaman

    Sinna Dorai is how assistant managers were addressed on turn-of-the-century tea estates in south India: Dorai would have been the manager, and Sinna Dorai loosely translates to ‘small manager.’ At three estates owned by the Murugappa Group – in Sakleshpur (Karnataka), Valparai, and the Nilgiris (Tamil Nadu) – the Assistant Manager’s bungalow has been converted for tourism as the Sinna Dorai’s bungalow. The wives of the current managers manage them. One is at Kadamane Tea Estate, located high in the Western Ghats in Karnataka, India, about 250 kilometers west of Bengaluru. Kadamane was planted nearly a century ago; its bungalows are old, charming, and well-preserved. The interiors have been tastefully restored. The rooms are modern and comfortable but have retained that old-world charm, and that’s a delicate balance. The estate offers a glimpse into a way of life that is no longer relevant but reveals a vibrant, fascinating history worth recording and preserving. There’s no restaurant, just a kitchen and a dining room where you go for mealtimes like the Sinna Dorais, sharing hearty meals made with local produce and delicious bread. The vistas are boundless, and the forest streams are lovely to explore. It is a perfect stop, a great example of tea tourism done right because it’s indulgent without being excessive. – Aravinda Anantharaman

    • Caption: Tea time on the lawn at Sinna Dorais Bungalows
    Sinna Dorais Twin Cottages, Kadamane Tea Estate, Karnataka, India

    A Stay at Scenic Kadamane Tea Estate

    By Aravinda Anantharaman

    If you drive 250 kilometers west of Bangalore, you reach Sakleshpur, where the coffee country begins. And sitting here amongst the coffee estates is a tea garden called Kadamane. And that itself seemed reason enough to visit. I spent a weekend there recently, and it’s one of the nicest breaks I’ve had. I booked a room at the Sinna Dorai’s Bungalow. So Sinna Dorai is how assistant managers were addressed. Small manager. That’s what it translates to. Venky Muthiah, whose family has owned Kadamane for years, decided to convert the assistant manager’s bungalows and open them out to tourists. He’s done this with two other estates they own in Valparai and the Nilgiris.

    Kadamane was planted nearly a century ago; its bungalows are old and very charming and very well preserved. The interiors have been done very tastefully. The rooms are modern and comfortable but don’t lose that old-world charm. And I think that’s a fine balance they’ve managed to maintain. So there were three Sinna Dorais, so the bungalow itself was large. These really wide verandas go all around, and these are great spaces to lounge in because the views are fantastic. I learned that the Sinna Dorais needed to keep an eye on everything that was going on, whether the gates, the tea sections themselves, or the factories, so the bungalows were strategically located, and you get a 360-degree view of what was going on around you. There’s also a tennis court, probably something assistant managers enjoyed.

    There’s also a pool table, which I don’t think is from the time of the Sinna Dorais. I enjoyed a small library with its old Planter’s Chronicles collection and discovering a story that rivals the Jungle Book. It’s called the Bad Girl of Kadamane, and it features a Sinna Dorai named Angus Hutton, man-eating tigers, and a lost child. And, of course, bears.

    It’s a way of life that’s no longer relevant today because the world of tea is changing. But there is an incredibly rich and fascinating history that is worth recording and preserving.”

    – Aravinda Anantharaman

    It must be said as British that they had a sense of adventure whether facing man-eating tigers or the prospect of creating a large-scale plantation. Standing here, I imagine them arriving at these forested hillsides so far from their home, plotting roads, earmarking sections to cultivate tea, and building a little world. And as I look at the vast expanse and the twisting roads, I try to imagine what an assistant manager would have seen or imagined possible. Sure, it’s a way of life that’s no longer relevant today because the world of tea is changing. But there is an incredibly rich and fascinating history that is worth recording and preserving.

    The room I booked was not one of the planters’ rooms but a cottage just a little away from the main building. And this used to be a post office before. So slightly larger, a little private, and enjoyable. Kadamane spans 7,500 acres, but only 1,000 have been planted with tea. So you see slopes of tea but also generous stretches of the sholas. In the silence – I don’t know much about birds, but you can hear bird songs. I could recognize the jungle fowl. I recognized the incessant hammering of the woodpecker. I also listened to, oddly, the peacock. And once we heard a noise which we later learned was barking deer. We came out quickly and caught a glimpse of it, but then the lorry tramped down the road and sent the deer scurrying into the bushes.

    I also liked that there’s no restaurant, but there’s a kitchen and a dining room, and you go there at mealtimes, just like the Sinna Dorais used to, to eat hearty meals made with delicious local produce. And the idea of Sinna Dorais bungalow is to come here and do nothing, but they also have a few activities. We did a couple of them: one was tea time on the hill. So there’s a Jeep in which we drove up to this hill on the property, but it has amazing views. Piping hot tea had been packed. Crispy hot bajjis had been packed. There were a few deck chairs. So we just sat down, spent a little time, and enjoyed it… it was Tea Time with a View. But that other activity was my favorite because you took the 4×4 and drove into the forest on the property. There was a small clearing. We spent an hour enjoying a stream flowing nearby, surrounded by forest, watching a couple of Malabar giant squirrels gamboling on the tree. And it’s an experience I’ve never had before. And sitting there surrounded by forest, the name Kadamane, which translates to ‘forest home,’ seems so apt.

    The rest of the weekend went into reading a fat murder mystery I was carrying. Wi-Fi and mobile signals are iffy, so you get a digital detox. And because Kadamane is a working estate, we decided to walk down and take a peek at the tea factory. There was a large chimney puffing out smoke. Just like Willy Wonka’s factory, my son said. Inside, on large troughs, the day’s plucking was withering gently, and yesterday’s leaves were making their way into the CTC machines and then being sorted by grades. You get this aroma of fresh tea that you never get anywhere else but in the factory.

    Sinna Dorai’s bungalow is a great example of tea tourism done right because it’s indulgent without being excessive. It’s luxurious yet accessible and affordable. And just, quite simply, a great getaway. The only thing I wish guests would do more is to ask about the tea because but for tea, this would have been a missed experience.


    Link to share this post with your colleagues

    Signup and receive Tea Biz weekly in your inbox.

  • Q|A Sandip Thapa

    Sandip Thapa, the founder of CuppaTrade, an eMarketplace that enables bulk growers to sell online, says the newly launched B2B eMarketplace exploits new-age tech, including AI and VR, to offer the expanding segment of small tea growers access to a diverse and global base of tea buyers.  not interested in maintaining the status quo, “the old way of doing business needs an overhaul,” he says, adding, “We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.”

    Listen to the Interview

    Cuppa Trade Founder Sandip Thapa on fixing the old way of doing business in tea.

    A Fresh Perspective

    Sandip Thapa started his career as a tea taster and auctioneer. He later spearheaded India’s first tea eMarketplace – the Jorhat Tea Centre, working with the Tea Board of India.

    Sandip Thapa, Founder CuppaTrade

    CuppaTrade is a newly launched B2B platform offering the expanding segment of small tea growers access to a diverse and global base of tea buyers. The platform exploits the new-age tech including AI (artificial intelligence) and AR (augmented reality) to connect tea producers across the world directly to buyers worldwide. It facilitates the sale of authentic GI tea to buyers, reducing cycle-time, ensuring quality, providing better renumeration to sellers and making procurement cost-effective for buyers.

    In this conversation with South Asia Correspondent Aravinda Anantharaman, Thapa describes a sales cycle that takes far too long, lacks transparency and favors large buyers. Stakeholders shows little interest in innovation. “The need of the hour is a fresh perspective,” he says.

    Aravinda Anantharaman: Congratulations on launching CuppaTrade. Will you tell us a little about it?

    Sandip Thapa: Thank you. CuppaTrade is an online marketplace catering to the tea ecosystem. We are focusing on the small tea growers’ cooperatives, the bought leaf factories, and the small producers. And we are increasing their buyer base. We are working on their market expansion, and we are going to the secondary and the tertiary buyers. We are connecting the small producers with a very large number of small buyers across the country. This is the plan in phase one, and in phase two we intend to open up for cross-border transactions as well, wherein we focus on the exports.

    We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.

    Aravinda: Looking at the Indian auction system, where did you feel there are gaps that needed to be plugged?

    Sandip: The entire process should have evolved. It is almost 180 years old and by this time everyone knows how tea is to be treated. So, the quality assessment is set, the pre-sale and the post-sale processes are set. What are the responsibilities of the seller? What are the responsibilities of the buyers? These are set and on the basis of these conventions, you see a lot of comfort in private sales. Wherein, the seller is sending samples directly from the garden; the seller is taking the onus of taking care of the quality and the buyer is taking the responsibility of timely payment or whatever the understanding is, with regards to paying prompts or credit terms.

    What we should have done is, in the auction system, we should have gone many years ago directly to ex-garden sales.

    Technology has yet to play a pivotal role in the ecosystem. So if it’s a broking house or an auction organizer, they could have come up with an app or platform wherein directly from the garden, the tea invoices for sale, could be uploaded and by the time it’s come to the warehouse, your kuchcha or the provisional catalog would be ready. They could have reduced the cycle time. And this is very easy. These are very common sense interventions. Nobody’s doing it, so we might as well do it through CuppaTrade.  

    Now, we have knowledge in the palm of our hands. Why can’t trade be that quick? You have the learnings of the marketplaces like, Amazon and Flipkart. Unfortunately the tea industry has been bereft of these innovations. You have pockets of innovation, but they’re very tiny. You have progressive sellers and buyers, that’s why you’ve seen the plethora of D2C brands coming in directly trying to sell from the gardens.

    So for us, the number one concern is the pace of transaction.

    Second is opening up of the market or the platform to add a very large number of buyers and sellers and to showcase small tea growers and producers because the kind of teas they are producing, although the volume is very small, has limited representation.

    Next you have to consider credit facility, with regards to receiving the material and making the payment, already set.

    It is a Tea Board run auction. The banks and fin-tech companies, could have easily opened up credit facility to the buyers or even to the sellers through the platform. That takes care of the working capital concern.

    CuppaTrade offers buyers four ways to complete a transaction.

    Finally, I feel it’s very restrictive in the sense that it’s not enough to have a tea board license if you are a buyer. Even if you have a license, you probably will not be able to operate out of any auction center if the committee doesn’t allow it.

    So the Buyers Committee is almost like a club. New buyers do get added in the auction system, but if you dig deeper, who are these new buyers? It’s the same old firms registering their new firm. So that is how the new buyers are coming in the platform. But it’s the same handful of 20, 30, 35 buyers. So these things should have evolved. Who should have anchored these? It could be the auction organizer, CTTA (Calcutta Tea Traders Association) or the GTAC, or STAC. It could be the Tea Board, it could be the brokers. But unfortunately, because the industry is so old, you have various interest groups and they run in their own direction. They have their own agenda, they have their own interests to fulfill, and that is how you see where the industry is at the moment.

    “The only segment that has made headway are the traders, packeteers, and merchant exporters. They buy low and sell high. That premium never returns to the small tea grower (STG) or producer (STP).”

    – Sandip Thapa

    Aravinda: In terms of price discovery and in setting prices, the auction offers the benchmark. How would CuppaTrade do that?

    Sandip: It’s very unfortunate because when you have a very limited set of buyers, price discovery will suffer. We respect the buyers version, because they also have their own interest to protect because they are looking for value. And with the commodity prices going up, it’s not just the tea price, you have other various costs which is going up, one has to control cost somewhere. Unfortunately, the producers are at a receiving end, where they don’t have much of a say.

    And you have to understand the buyers are mostly either traders or agents or packeteers in the auction system. So the procurement cost has to be low so that they make a larger margin. The platform has not been opened to the secondary or tertiary buyers, no one would want to go there and bring them onboard. Else, then what happens to the primary agents and buyers?

    We feel everyone can coexist. A small buyer can become a medium-large buyer. A large buyer can become a very large buyer because, when you look at the FMCG industry, everyone is going rural, everyone is going to tier-two, tier-three cities. Everyone is trying to get into just-in-time to fill the shelves, use technology so that inventory is just right and operational costs are down. Similar things could have happened, but when you have a very limited base, how would you expect a fair price discovery?

    Yes, you need discipline and you need to put systems in place. But why can’t teas be bought by international buyers at the same time? You have to have mechanisms in place. And it may not be suitable for all kinds of tea. That’s all right. But even on an experiment basis the platform should have been opened up. If it’s a very high quality tea, anyway it’s going to Europe, why can’t the importers be asked to be part of the platform. With a click, you would have expanded the market. And it would be all digital. You log in, explore the catalogue and you bid. How difficult can it be? And now we have working examples, it’s not that we are reinventing the wheel. It’s been many years that Amazon and Flipkart have been in our lives.

    If we don’t focus on an alternate, wherein we are speeding up the cycle time, we are reducing the inventory turn-around or providing easy credit in a transparent and open manner from the platform, then when?

    Even for that matter sampling. If you go to a buyer’s place, a fairly large or medium sized buyer, the amount of samples they get, it’s humanly not possible to taste all those teas. In many cases, they know what a garden or a particular mark is making. They know the flushes and they know the quality that would be coming out at any particular point in time. So it’s just the type samples they would see seriously at the start of the season or flush, and occasionally the usual sale samples, that’s about it. They do not have the bandwidth to see all samples, because they’re buying from auctions, they’re buying from private sale, they have 2, 3, 4 local brokers sitting outside the office with the samples pushing for sale.

    For certain category, you have to see the sample and then only purchase, definitely. Why not? But not for all categories. If you look at the BLF category or the variety that is mostly bought within a particular price range, that anyway is bought on the basis of touch and feel. No one would make the cups and taste. That category is increasing. So if you do something about it, digitize it or have a data set, that one can refer to, instead of just receiving sample, it would make things easier for both buyer and seller.

    Here also, CuppaTrade will be using a lot of tech like digital catalogue to make catalogues a bit more interesting and offer more than an Excel sheet; Augmented Reality so that buyers don’t have to go through physical samples. This will save them a lot of space and time. And with our quality assessment, it’s going to be very interesting. They will be able to buy teas on the go, even if they’re travelling or wherever they may be stationed. Once fully ready, we’ll showcase it and we’ll take feedback from the stakeholders. So far it’s been very, very encouraging.

    Aravinda: I would also think it addresses one of the concerns that producers have about how many samples they send. Small producers can’t afford to send so many samples in the hope that they get somebody to taste the tea and set a price for it.

    Sandip: Correct. So while we are building the AR module, we have already taken steps to get into focused sampling. The process begins right from registration. It’s very thorough. It’s a two step process, where initially, the buyer just uploads the basic details. Then the team sits with the buyer over a call and captures which grades do they buy, at what levels, what are their preferences and so on. And then we also push or showcase the teas that they’re not purchasing. And that is how we nudge them to try new varieties and steadily expand the market.

    You would be surprised and happy to know that while it’s been only about three months that we are active and live, we’ve handled teas from Arunachal, Nagaland, Himachal, Upper Assam and South India. And of all shapes and sizes. It could be a five kilo pack, it could be a two kilo pack, all are welcome; green tea, oolong, orthodox, tippy, non tippy, CTC, many varieties.

    When we discuss with buyers who mostly deal in CTC, Bolder Grades, Dust and so on and so forth, we ask them, if they would buy green tea as well, or would they be interested in Arunachal Orthodox or some other varieties? They usually say, “No, we do not deal in these teas.” Then we counter, “You haven’t dealt because you haven’t had a platform where you could be assured of a constant supply. Here is your chance, we are showcasing these variety and sending you a few samples.” We encourage them to test it out with their clients, and tell them that now they have a seasoned partner in CuppaTrade who can offer a smooth supply. So this is how we are expanding or helping the small producers expand the market.

    Aravinda: The traditional auction system, especially with the mix of commodity and CTC and Orthodox (ODX) has a very complicated grading system that is very intimidating for any new buyer. Unless they already have a sense of all these finer differences between grades.

    Sandip: It’s a very interesting point. We have a plethora of grades and most are not required. We had discussed this with Tea Board earlier. Everyone agrees that we need to reduce the numbers and have only the standard ones like you find in Sri Lanka. But here comes the problem, when you say, a particular grade, let’s say a BOP or a BP, it varies between garden to garden because of the sizing of the grains. And that happens because of quality of mesh in sifters, as it varies between manufacturers. You’d be happy to note that during our quality assessment, we are pointing out the mesh size for each invoice.

    This is a foundational work that we have started wherein we are providing as many data points as possible for the comfort of buyers. We are laying this foundation so that slowly, we may do away with the samples altogether. This may sound impossible now, but with technology, this is possible.

    We realized early, that after a point, when we have lakhs of buyers in the platform, it’ll not be possible for us to send out samples even if we do focused sampling.

    It’s a process. Sellers realize it. Buyers also realize that there are too many grades in the market. We need to reduce it. We are talking to Associations too, because it reduces cost for the seller as it helps in streamlining packaging, and is less confusing for buyers.

    Aravinda: With the small tea farmer and the bought leaf factory how do you ensure, because the volumes are so small how do you ensure there’s a sufficient supply of a particular tea, a particular grade, which has already found a buyer and who’d like a, the assurance of a steady, consistent supply

    Sandip: For stabilizing the supply chain for a buyer with a particular set of variety, we have a mechanism for requirement matching. We use AI to educate the platform that for a particular buyer, a certain category of tea is suitable. Thus, after a point, when we have enough data, the platform will give us and the buyer suitable recommendation basis her buying history. Then, we shall position the new marks accordingly. This way we are trying to bring some semblance and ensure that the buyers have the required supply.

    Aravinda: And I think there’s also the opportunity to take back market insights to producers, or to the factories, to the small tea growers, and say, okay, I have an estimate of how much tea of a certain grade, of a certain kind at a certain price band in demand and sort of establish those sort of conversations also

    Sandip: Yes, this is what the market is demanding and perhaps they could tweak manufacturing to stay relevant and take advantage of the prevailing market. We want to rely on data and market feedback for this. We are earnest in developing a robust database and analytics to improve all-round offerings.

    The other thing with small growers is that, they are defined by one segment, but within that segment itself, there’s such a huge range, isn’t it? There are those who are producing these uber specialty and extremely fine quality tea, and there are those who are still starting out and figuring out a way around making tea. So how do you then navigate this spectrum of small tea growers?

    We have already faced this kind of a dilemma because you have certain bought-leaf factories who are working very closely with smart growers and they’re putting in 70% to 80% fine leaf in manufacturing. But the moment the buyer hears it’s a bought leaf factory, the perception gets colored. It’s a constant education process with them. And we insist that they shouldn’t judge either by the mark or where it’s coming from. They should assess and pay only basis the quality.

    It’s a process because the perception of BLF is very strong. It’s a volume game for BLF producers with less regard to quality. But when you come across exceptions, you’ve got to fight for them.

    Here, we have an advantage because the buyer set is very large and it’s increasing every day. So I think from the traditional platform point of view, when they are selling through CuppaTrade, the biggest advantage is the market base. There is somebody who’s working hard towards positioning them, and we do get into a bit of confrontation with buyers, and urge them to stick to apple to apple comparison on quality because we know what we have, we know the producers, the team and advisors have gone to the factory, we click pictures, we make videos, and we know some of them are very disciplined producers and the result is in the cup. When you taste you know immediately that these have been manufactured with very finely plucked leaves and they’re different. Some of the invoices are even better than many agency gardens, I must say.

    It’s a constant positioning that we have to do. And that is how you set the mark, because it’s not just the seller who’s saying that her tea is good, but the platform too, which is supposed to be unbiased. And because we have a large buyer base, it becomes somewhat easier for us to represent those kind of teas.

    Aravinda: CuppaTrade is not just a trading platform, it’s also supports a community where conversations can happen, insights can flow from one to the other. And you facilitate, that direct dialogue.

    Sandip: We are not traditional brokers. We are not traders. We don’t want to keep a margin. We are very clear on that. Whatever benefit or the higher price that the seller gets, which the buyer is providing, it has to go directly to the seller. We have a service fee. We charge the sellers, we charge the buyers, but that’s about it. We are pure facilitators providing a platform where everyone is welcome to interact, negotiate in a secure, safe environment, while we take care of quality and payments.

    Aravinda: So what is the volume you need of buyers and sellers to make CuppaTrade viable and breakeven?

    Sandip: We’re going for all. We’re going for everybody. And it’s because India itself is a very, very large market. If you look at the figures, I think the timing of CuppaTrade is apt.

    If you look at the auction versus private sale data, auctions are usually around 45% annually. And there is a constant shift towards private sale. We anticipate that this shift will keep increasing. Within a couple of years it will be a stark 40-60 in favor of private sale. CuppaTrade operates in the private space and we don’t conduct auctions. It’s a marketplace, where buyers and sellers negotiate directly and finalize the price and quantity.

    As far as buyers are concerned, internally we have taken a target to have about over a lakh (100,000) of buyers across the country. At the moment, we are somewhere near 500 buyers, and we have not even stepped up because, it’s end season in North India. We are focusing on South Indian producers right now. By late February or early March, we shall go all-out and hasten the onboarding process. It’ll be pedal to the metal, so to say.

    We want to go to the hinterlands. We want to go to the destinations, hold buyer-seller meets, do the legwork, also to make the onboarding process as smooth and easy, help them understand our processes, our quality assessment, show the AR version of the sample, gauge their comfort level and tweak accordingly. Again, it’s a process and it’ll take some time and as you know the industry is averse to innovation and tech, we anticipate it’s going to be a long haul. But yes, for us, the figure is over a lakh of buyers on the platform.

    Aravinda: How difficult is it to conduct transactions on CuppaTrade? What are buyers and sellers required to do to join the platform?

    Sandip: It’s very easy. You go to the website CuppaTrade.com and click Marketplace. You identify whether you are a seller, buyer, or both. And the registration form opens up. Many requirements are not mandatory. It’s left to the seller and buyer. That is the first step of registration. Then the team calls and we get into the detailing bit. So it’s that easy and it’s completely free. We don’t pay to be members of Amazon or buy from Flipkart. So that’s the model.

    Aravinda: And it comes directly the product itself, eventually comes directly from the producer’s side, the seller’s side?

    Sandip: Yes, fresh and in the shortest possible time. We’re removing many layers of traders or intermediaries. In most cases, it’ll be between seller to destination buyer. For certain categories it could be the intermediaries who would be feeding the destination. We are not averse to, agents or traders being in the platform because we are focusing on the ecosystem. Where we bring advantage for both seller and buyer is better remuneration, a large variety in the shortest possible time on a one-stop shop platform with tech driven value-adds. There’ll be many segments of buyers who will be very interested in the platform.

    Link to share this post with your colleagues

    Signup and receive Tea Biz weekly in your inbox.

  • Tea Producers Urged to Share Insights on Human Rights

    THIRST has completed its initial Human Rights Impact Assessment in the global tea sector and is now seeking to understand the root causes. Founder and CEO Sabita Banerji says that, “the voices of producers are, in fact, quite rarely heard. They are often blamed for circumstances beyond their control. We just want to understand how it all works, where the levers for change may be, how the current situation might be driving some of the undeniable problems in the tea sector, and what could be done to address those problems.”

    Producers: Tell your side of the story. Fill out this form to receive a link to the Global Tea Producers Survey before January 31, 2023.

    Listen to the Interview

    Sabita Banerji on THIRST’s Human Rights Impact Assessment
    Since the inception of the tea industry criticism for low pay and poor living and working conditions for tea workers has been directed primarily at owners.  Historically, there were undeniably bad practices – many tea producers have since improved conditions on their estates and enjoy good relations with their workforce, complying with local laws and regulations.

    Tea Producers Get An Opportunity to Tell their Side of the Story

    Sabita Banerji was born and raised on tea plantations in Kerala and Assam. She has spent nearly 20 years working in ethical trade and international development, holding strategic posts at Oxfam and the Ethical Trading Initiative. Sabita was previously a member of the Board of Directors of Just Change, UK – a voluntary community tea trading initiative. 

    She co-founded THIRST, The International Roundtable for Sustainable Tea. THIRST launched its Human Rights Impact Assessment of the global tea sector last year. Planned as a three-year study, Phase 1 of the literature review has ended, and Phase 2 is set to begin.

    Aravinda Anantharaman: I am eager to hear how the study has progressed so far. First, do you want to debunk some preconceptions about this survey, especially as you have just launched the producer’s survey? Because human rights is a touchy subject and you have often emphasized that THIRST wants to work collaboratively with producers.

    Sabita Banerji: You’re right, human rights are a touchy subject. But perhaps if we just think about tea workers and farmers as people like ourselves, mothers, fathers, sisters, and brothers, people who just want to live a decent life, who want to have a house that is safe and waterproof in the monsoon and who can afford to educate their children to a decent standard, and who can maybe have some savings so that if a member of the family falls sick they can get medical attention for them. If we think of it that way, then there’s nothing touchy about that. These are things we all want for ourselves; we all want for anybody that we work with. And I’m sure everybody in the tea value chain wants that for tea workers and farmers if possible.

    Sabita Banerji

    However, we are working in a system established 200 years ago. And it was established with a certain structure, most of which persists today, and it was established at a time when there were very different moral standards regarding how workers should be treated. And so, we need to look at that, too. We live in an age of the UN Guiding Principles on Business and Human Rights. There will soon be legislation from the European Union on mandatory human rights and environmental due diligence. There are growing demands from customers, investors, and potential employers for companies to demonstrate that everybody working in their supply chain has a life that meets those decent standards. And so, I think that’s the way to look at this issue and not worry too much about the phrase “human rights.”

    The two preconceptions I’d like to debunk with this phase of the Human Rights Impact Assessment are the preconception that civil society is somehow out to attack the tea industry and wants to destroy it. The opposite is true. NGOs (non-government organization) and civil society organizations, as much as the tea industry itself, wants the industry to survive. We want it to thrive. We want everybody within a thriving industry to be treated fairly and have a decent life. So that’s the first preconception I want to debunk.

    The second one is that tea producers are solely responsible for the conditions in which tea workers and farmers live. They are part of a wider system. In fact, most of the profit of the margin from the sale of tea is concentrated at the packing and retail end of the value chain. So, we shouldn’t be looking solely at producers to try to solve these problems. We should be looking at the whole value chain and trying to discover what everybody within the value chain can do to make life better for tea workers and farmers.

    If we were to use the language of human rights, it’s their right to have a decent life. But it’s also beneficial to the industry. There is a business imperative for ensuring that workers are not so unhappy that they are desperate for their children to get out of tea production. And so, just in terms of retention, productivity, and reputation of the tea industry as whole or individual companies, it is important for tea workers to say we have a decent life and for tea farmers to have a decent income.

    Aravinda: Was there anything that came up from the literature review that you were surprised by? Also, where were the gaps in the available literature on the tea sector? 

    Sabita: The two biggest areas where we found gaps in the information were, first, information from East and Southeast Asia. There is much literature out, you know, and a disproportionate amount of literature about Assam and less so, but still quite a lot from Kenya and Malawi. But very little in other areas. And even in other East African countries like Tanzania, many of the resources we found were quite dated. But from countries from East Asia, Southeast Asia, Indonesia, Vietnam, etc., which are very big, major tea-growing countries, there needs to be more literature on what life is like for workers, tea workers, and farmers there. So that’s a gap that we hope will be filled. I have to say that since we were looking at available English resources, there are likely other resources out there, although we have tried to trace those and have not found any more information as far as we know. If anyone reading this knows of resources, reports, and documentation of situations for tea workers and farmers in those areas, I’d be very pleased to hear from them.

    The second area where we found that there needed to be more information was about smallholder tea farmers. Because as you know, there is a huge surge in small tea farmers establishing themselves. And in fact, more than 60% of tea globally is now grown by small-scale tea farmers. I just read the news today that APJ (Apeejay Tea Group, the third largest tea company in India) is pulling out of the tea sector in India. Recently, Warren Teas also pulled out of its tea estates in Assam. It looks like the plantation sector is weakening, and the small tea growers’ sector is growing. And therefore, it’s important that we start to document and research, you know, what is happening to the workers and the farmers and their families? Because if there were problems in estates, and I think this is something that estate managers and owners have been telling us for years that yes, they may not have the ideal perfect conditions, but workers have some protection workers on tea estates. In contrast, small-scale farmers are dispersed across huge areas, there is no organization between them, it’s very hard to monitor. It would be very hard for retailers and brands to monitor what is happening within those farms, whether the human rights of everybody within those farms are being met. And so, this is an area where we need to see more documentation of those issues.

    Aravinda: Where were the gaps in the available literature on the tea sector? 

    Sabita: The two biggest areas where we found gaps in the information were, first, information from East and Southeast Asia. There is much literature out, you know, and a disproportionate amount of literature about Assam and less so, but still quite a lot from Kenya and Malawi. But very little in other areas. And even in other East African countries like Tanzania, many of the resources we found were quite dated. But from countries from East Asia, Southeast Asia, Indonesia, Vietnam, etc., which are very big, major tea-growing countries, there needs to be more literature on what life is like for workers, tea workers, and farmers there. So that’s a gap that we hope will be filled. I have to say that, you know, we were looking at available English resources. So it may be that there are other resources out there, although we have tried to trace those and have not found any more information as far as we know. So, if anyone listening to this knows of resources, reports, and documentation of situations for tea workers and farmers in those areas, I’d be very pleased to hear from them.

    The second area where we found that there needed to be more information was about smallholder tea farmers. Because as you know, I’ve been that there is a huge surge in small tea farmers. And in fact, more than 50% of tea globally is now grown by small-scale tea farmers. And I just read the news today that APJ is pulling out of the tea sector in India. Recently, Warren Teas also pulled out of their tea estates in Assam, and the plantation sector is weakening. And the small tea growers’ sector is growing. And therefore, it’s important that we start to document and research, you know, what is happening to the workers and the farmers and their families? Because if there were problems in estates, and I think this is something that estate managers and owners have been telling us for years that yes, they may not have the ideal perfect conditions, but they have some protection workers on tea estates. And but small-scale farmers, they are, you know, dispersed across huge areas, there is no organization between them, it’s very hard to monitor, it would be very hard for retailers and brands to monitor what is happening within those farms, whether the human rights of everybody within those farms are being met. And so, this is an area where we need to see more documentation of those issues.

    Aravinda: The second phase of survey and interviews is a key phrase, isn’t it, of surveys with producers and interviews with industry stakeholders, particularly workers. What is the expectation of this phase? 

    Sabita: The second phase is really key. This is the analysis phase. The first phase was assessment, where we documented both how the industry works, what standards are in place, the human rights in principle and in practice. The second phase is analysis, which is the phase we’re in now. The third phase will be action planning, where we bring together international multi stakeholder players to discuss what should be done. And the fourth phase will be accountability, where we try to support the tea industry to monitor those action plans and how effective they are, whether they need adjustment, etc.

    So, this is a key phase, this analysis phase. This phase will consist of three things, a producer’s survey, key informant interviews with a wide range of people throughout the tea sector and technical experts in things like international trade, gender, the tea industry as a whole. And the third element will be looking at alternative approaches, you know, what have different players been trying around the world to improve working conditions for workers or how tea is traded, and so starting to put out some potential solutions. But the most important one of those three, I think, is this producer survey. Because producers’ voices are in fact quite rarely heard. People worry that the voice of workers is not heard. And that is a legitimate worry. But there have been this huge number of reports, many NGOs and trade unions and academics, interviewing workers, finding out their position and their point of view and their lived experience. And obviously, brands and retailers are usually happy to speak out. But for producers, it’s harder because firstly, they are often directly blamed for the condition of workers on their estates. And secondly, they are just part of a wider value chain or wider supply chain. They have little control over the prices that are paid for the tea that their workers produce. And they are also under pressure with increasing costs and increasing climate impacts. Which makes it really difficult to run these estates, as perhaps we’ve seen from some of these companies pulling out and a lot of estates closing, leaving workers in a really vulnerable position. So we need to hear the voice of tea producers. We need tea producers to be able to say what pressures they’re under and what would help them to try and address some of these problems. And they need to be able to do this in confidence, anonymously so that there is no commercial risk to them in speaking out in case some of their answers may seem critical of their customers.

    And you know, the principle that THIRST works on is that we’re not about blaming any player within the within the tea value chain. We’re not blaming producers for how they treat their workers. We’re not blaming brands and retailers for how they do their purchasing practices. But we just want to understand, we want to understand how it all works, where the levers for change may be, how the current situation might be driving some of the problems that are undeniably there in the tea sector, and what could be done by those players to address those problems.

    Aravinda: And, as you said, there’s little available literature on small tea growers. Given the changing models, how will you approach Phase 2 given the differences in how large estates, small tea growers, bought-leaf factories, etc., operate?

    Sabita: Yes, you’re right. The tea sector is very complex, at that production level, at every level, but the focus of this survey, we had to be very clear about whom we were targeting. And the issues for small-scale farmers, bought-leaf factories, and tea estates are very different, so it wouldn’t work to try to cover them all in one survey. So, we are targeting this survey at large tea estates; we intend to do surveys on factory workers and small-scale tea producers at some time int he future. But currently, we’re using the Indian government’s definition of a larger estate of five hectares or more and employing over 15 people to emphasize that this survey is not exclusively for India; it’s for any country where tea is being produced. So, all tea producers who meet those criteria are invited and encouraged to participate in the survey.

    Aravinda: What are the challenges you foresee?

    Sabita: The main challenge is getting producers to participate in the survey. Because over the years and centuries, much trust has been lost between the different players within the tea sector. And it will take time and careful work to tear down those barriers or dissolve them between the players. So, I want to reassure the producer that this survey will be done anonymously. And you can confidently answer the questions so that the responses will not be revealed to anybody. But what we’re going to do is we’re going to aggregate the results. So, a certain percentage of respondents confirmed that in the last year, this is how much of their made tea was sold below the cost of production. We’re not naming any producers. We’re not naming any buyers, brands, or retailers. We’re just going to focus on the generic responses that tea producers give us. But we also have space within the survey for producers to give us more detail if they want to. Again, those responses will be treated completely anonymously. And you know, if there’s anything within it that would identify the state or all their customers, we will not publish that. But it will be extremely valuable to have that information to feed that knowledge and understanding into the next phase where we’re developing. We’re working with the industry to develop an action plan. We invite producers themselves to be part of those multi-stakeholder discussions to be part of the discussion about what role they can play in improving the life and work of the workers, but also what they need from the other players within the value chain to enable them to do that.

    Aravinda: How different will THIRST’s on-the-ground research be from, say, audits by certification bodies? 

    Sabita: The Global Tea Producers Survey is a very, very different thing from an audit or certification standard. Audits and certification checks are just checking up on the producer. Whereas this is asking the producer to say what their challenges are, what their opportunities are, and what their situation is. So the data from this survey will complement what you get from audits. But it is a very different kind of study.

    Aravinda: Is there anything you’d like to put out there to producers on why they should participate in the survey, what is expected of them, and how the information will be used? 

    Sabita: All tea producers, managers, and owners of tea estates in whatever country they’re in should seriously consider taking part in this survey. This is not just a brief few questions; it will require an hour of your time and allow you to put your side of the story forward. THIRST is not about blaming any party for the situation of tea workers and farmers. But the voice of producers has yet to be heard. This is your opportunity. Often producers say that what is reported about them needs to be more accurate. This is your opportunity to give accurate information about managing a tea estate, paying workers a decent wage, and providing decent benefits. So please, please do take up this opportunity. Don’t be afraid, don’t be defensive. Because this is not an attack, this is offering you the opportunity to speak out.

    If you agree to take part you’ll be emailed a link. The survey is on Survey Monkey, which we’ve researched and have found to be the most secure. This spring we will aggregate the data we receive and we’ll put that together in a report to try to reflect the challenges that producers around the world are facing and what the situation is really like for them. And then, that report will be combined with our findings from the key informant interviews, and we hope that some of you will agree to take part in those interviews. And it will also be combined with the results of the alternative approaches that we hope to document. So when combined with the Phase One report, we looked at the problem. We look at how the tea industry works, and we will look at human rights in principle and human rights in practice. In Phase Two, we will have looked at the producers’ perspective. The key informant interviews will give insights into what could be driving some of these problems. And then also these alternative approaches, which will show us some of the potential solutions that there might be. And we’ll bring all that together for Phase Three when we invite tea stakeholders from around the world to come together to discuss what they, working together or individually or in groups, could do to address these problems. And thereby not only making lives better for tea workers and farmers worldwide but also strengthening the tea supply chain and improving the tea industry’s reputation.

    See What is THIRST, the International Roundtable for Sustainable Tea

    If you manage or own a tea estate anywhere in the world, THIRST would like to offer you the opportunity to give your side of the story by taking part in the confidential Global Tea Producers Survey.

    — Sabita Banerji

    We understand that issues like price discovery and purchasing practices can be commercially sensitive, and the survey provides for anonymity and confidentiality. We also believe the survey will help tea buyers to better understand the pressures that suppliers are under. Pressures which can impact on workers, creating potential reputational risk to both their brands, and to the industry as a whole. Results will be aggregated and neither producers nor buyers will be publicly named. 

    Consumers, investors and employees around the world are increasingly demanding higher social and environmental standards for those who produce goods and services. To meet that demand in the tea sector, everyone involved needs to explore how they might be unintentionally suppressing workers’ pay and conditions, including tea producers, governments, trade unions, tea buyers, brokers, packers, traders, brands, retailers and tea consumers.

    By working together, THIRST believes that a new kind of tea industry is possible – a tea industry fit for the 21st century, a kinder, fairer industry in which everyone thrives. But we can only get there if we listen to all voices, and understand all perspectives – including those of tea producers.

    Anyone who’d like to participate in the survey should go to THIRST’s website: www.THIRST.international Scroll down to see a link to the producer survey to register. And we very much look forward to hearing what producers worldwide would like to share about the realities they are facing.

    To register and complete the survey, please fill out this form before 31st January 2023.

    Link to share this post with your colleagues

    Signup and receive Tea Biz weekly in your inbox.

  • Estate-Direct Tea Retail at Scale

    Rudra Chatterjee, the dynamic managing director of Luxmi Tea, has expanded and diversified the venerable 30-million-kilo bulk tea producer into direct-to-consumer retail. Luxmi, which operates 25 estates in India and Africa, has shortened the supply chain to deliver fresher tea and now sources herbal infusions and inclusions for blends locally. Chatterjee discusses with South Asia Correspondent Aravinda Anantharaman his vision for rebranding the company as Luxmi Estates.

    Listen to the Interview

    Rudra Chatterjee on the rebranding of Luxmi Tea
    Bungalow at Makaibari Tea Estate, India

    Fresh Start: Luxmi Seeks to Shorten the Supply Chain

    When I last spoke with Rudra Chatterjee, Managing Director of the 110-year-old Luxmi Tea, he discussed a pivot to selling the brand’s offerings direct, as COVID brought more consumers online. Two years later, Luxmi Estates has launched as a significant business vertical. The retail brand offers a range of teas with a subscription program. In this interview, Rudra provides an update on future plans and explains his reasons for rebranding.

    See: Will the Pivot Online be the Catalyst the Farm-to-Cup Movement Needs?

    Aravinda Anantharaman: It’s been a while since we last spoke. Luxmi Tea has undergone a rebranding. Do talk to us about it.

    Rudra Chatterjee: I sense that there are two, or three aspects to it. There are some right-at-the-top marketing aspects to it, but below that, I think there are some layers to it. I always joke that this company was born in some sort of revolution.

    So we want to do something new, whether planting new bushes in Africa or in – although it wasn’t part of Luxmi then – Makaibari going organic. So it has a lot of DNA for trying new things. There are a few aspects to it. Number one is more than any other product, that tea is best fresh. But the supply chain isn’t designed to make it as fresh as possible. I think that’s something that we would like to start and we would like many other companies to follow: to make the tea as fresh and have it, using technology, to the customer as soon as possible.

    The second aspect, which is I think even more worthwhile, is tea estates have become monocultural spaces but it’s important to grow other herbs. For good or bad, tea is considered a healthy, hot beverage. And so if even a company for a hundred years as tea growers, we have decided to say that, you know, there are amazing places that grow turmeric right next to Addabarie tea estate. And that is a high curcumin level. Frankly, we are not inventing any herb. All the herbs that we are using are the ones that people for hundreds of years know are good for you. So whether it’s turmeric, whether it’s ashwagandha, whether it’s tulsi, whether it is masala chai, lavender, all of these are well-known herbs. But my goal is to source as much as it locally, whether from our own estate or by using farmers near our estate. So African rose from Rwanda, turmeric from Addabarie, we are using Himsagar mangoes, and Gondhoraj Lebu… all these things which are part of our culture. And so nothing that is just pure flavor, these are herbs.

    And along with that, we’ve obviously started our website, and one of the focuses is on the estate. And that’s why we call it Luxmi Estates. We are Luxmi Tea Company, that’s the official name of the company, but the brand is Luxmi Estates because I want to say that these teas are from estates. These teas haven’t been bought by someone and packed and sold.

    The second aspect is using the hand to say our Lakshmi (Hindu goddess of wealth) is the plucker, and it’s her hand. When I think about the issues in the plantation sector of the tea industry, I think a lot of it is solvable. I’ve said that in an interview with you before if we can sell the tea if I can say that part of the revenue – and that part should keep going up – will go to getting a good impact on the farm. We’ve spent more than ten crore on education within the tea estates (a crore is 10 million rupees, approximately $125,000 in US dollars). We do not have the budget to keep going higher unless we find another source of revenue. So I think all of it comes together, the monocultural aspect, the freshness of the tea, and the lives of workers. I’m quite confident that we will succeed. The reason is, who doesn’t want a better product, fresher, at a fair price? You’ll see the prices are good, and the tea is nicely packaged. And we are not trying to reinvent what is good for you. You know what is good for you. You know turmeric is good for you; you know tulsi is good for you. We will find the best source of it; that is what we are good at – going to the farm and creating the best source, making sure it’s vacuum packed, and it’s shipped to you very quickly. And that’s one reason why we – because we are starting in the winter – we started with the herbal teas. We will add some of the regular teas also, but we wanted to start the regular teas during the first flush and the herbal teas now because this is the time for this kind of herb. So that’s my long overview of what we are trying to do.

    Aravinda: When we last spoke, it was also about how you were excited by the conversations you were having with the consumers via social media and the interaction that you were having. And that has really sort of driven a whole shift, isn’t it, in how you’re looking at retail, how you’re looking at direct-to-consumer and all of that?

    Rudra: Absolutely. The most important thing is the difference between selling to an invisible hand. You see the prices on the screen, but you hardly know who’s buying, and you don’t know how many steps it will go before the consumer comes. And I had said, I think at that time, even if we can sell 1% of our teas to consumers, we know and hear their opinion and what they like and what they don’t like. It’s great to hear from customers who love that Rugabano* is bright and that it steeps at three minutes, instead of four minutes. And that carries on to this conversation about turmeric and whether green tea will go with it.

    I’m open to experimentation. Only I am enough of a purist not to add raspberry flavor or something through the tea because I like the tea as it is. But if it is something that goes with green tea, one plus one is greater than two as it adds something and makes it easily accessible to the customer, and I know that the money is going back to the farm. It is not being taken away from the farm. This is good for the industry. Whether it’s ginger that is produced in Assam, the oranges and lemongrass of Makaibari, or Addabarie for ginger, there’s never the damage that monocultural crops extend to the tea estate. So it’s very good to have many other things along with tea and create other income streams, whether from flowers, honey, or herbs for workers. Like we did, we are doing homestays in the tea estate.

    This needs an imaginative solution. It is not a competitive solution. And it’s something that I would welcome everybody to. Because it’s something that we should all do — I’m not saying there should be one big brand — but there should be several big brands. But all of them should be fresh from the farm to the consumer.

    Aravinda: How big is retail a part of what Luxmi does now, and what are you expecting to see? And also the addition of the herbal teas themselves. Where did that come from? Was it the whole fallout of covid when the demand for such a kind of tea increased? Or was it that you had access to all these herbs and spices and all of that, and it just made sense to venture into that space? So what was the thinking behind that? 

    Rudra: A couple of things. One is even much before Covid; growing up on a tea farm, I’m very keen on different kinds of food. So I get like honey from one estate, I get ginger and turmeric, I get red rice, I get peppercorn. So I’ve never thought that tea estates only produced tea. One is the commercial aspect of it, but there are many others. Certainly, during Covid, one thing that changed was I spent all the time in the estate, not in the city, a little bit in Mirzapur, but mostly in the tea estates. In some ways, it was a far more open interaction with everyone there.

    Secondly, I think it’s clear, while, you know, people were coming and staying in Makaibari, I could see consumers of Makaibari staying in Makaibari and telling me things that, Why aren’t you doing, you know, mango with this and why aren’t you doing… And we started selling it in Taj, and then we started selling it at the Bagdogra Airport.

    From that sample set of few people, it was clear that this is certainly something that customers appreciate. You asked about the percentage of the business; I don’t think I don’t want this to be that all the teas that Luxmi makes should get into our own packages. Not at all. We will continue selling through traditional channels, and we will sell at auctions. We are very, as I said, very grateful for the business. And our prices have also been fine. You might have seen the Assam prices, the Rwanda, and Gisovu. Rugabano is number one and number two in all of Africa. Whether it is Makaibari or the Moran estates, all these are making very, very good teas. But it’s important to think of this as a sustainable solution for the long term. I don’t see why we will not go straight to the consumers with some of the teas. People will mostly continue buying tea from supermarkets, but some might care about something different and something they really care about, and they might want to subscribe to the tea. If they really like strong Upper Assam, they might subscribe to it from us.

    So that’s the thought. It’s still evolving, by the way. I can’t say that I’ve figured this out. It’s evolving, and I’m open to customer input and review. The challenge is whether I can ensure we are not weak in the product’s packaging or delivery. Because sometimes it’s so rustic when you do something from the farm. The package doesn’t open properly; it’s dripping or something. I don’t want that. I want people to say, okay, this is a world-class company making a world-class product, but with all the pluses of coming straight from the farm.

    Aravinda: What has been the response of the people on your estates – the factory and the fields?

    Rudra: Fantastic. I mentioned to you last time that tea planters love talking to people, as you know, you’ve spoken to many of them. So this has given us a whole new set of conversations. And people compete about customer reviews and what they like and, and if there is one review on one website, you’ll see a tea estate manager like taking a photograph of it and WhatsApping it to everybody saying, this is the comment from this customer.

    It’s actually great. Also, the more you put sunlight on work conditions in the tea estate, the more change you will get. And it is important that consumers understand there’s a cost to doing it. The money does not come from anyone other than customers. When you’re making the product, every penny we spend on everything comes from the customers who buy our tea, So we would like to make some special tea for really discerning customers, and hopefully, that’ll pay for some better facilities and infrastructure other than introducing the customer to a great product.

    Aravinda: So when you look at the Indian industry scenario itself today, given the kind of changes you’ve brought into Luxmi, whether it’s in product innovation, whether it’s in going direct to consumer and in tourism itself, what would you like to see as far as changes in the industry itself go? What do you think it needs in terms of solutions?

    Rudra: As a business student, businesses do well when forced to the world and innovate. And tea industry is in such a position today. We have been pushed into the world the way we worked over the last 50 years is clearly not working. Crops are coming down. Climate change is adding costs. There have been incredibly hot days this summer, and then we are having a lot of rain towards the end of the season.

    Now tea was an industry that loved routine. Wake up at 5.30 in the morning, go out in the estate, get the plucking rounds in seven days, pack the tea and forget about it, and go back next week. That’s not going to work anymore. You have to keep the discipline of the routine, but you have to add the willingness to change whatever you were doing every now and then. But that’s how, that’s how most of the industry is. That’s how most other industries are. There needs to be some radical changes. For example, I do think that the government and industry should work together and replant forests in some of the tea states, we cannot have this incredibly monocultural environment. And with lot of the forests having gone, the pests have increased, the climate has changed. So I think, there has to be an incentive to do that, from the government. But there can be some earning out of the forests, whether it is from timber or from honey or from fruit or whatever it is.

    And, we’ll have to innovate. Like one of the things I always say is we need more women in the industry, living in the tea estates and just rethinking how this business is done. It has been done the same way since maybe the late 1800s and 1900s. There have been some changes. CTC has come, and some others, but the changes have been few and far between. It is important to realize that the industry can provide jobs if it succeeds. And it is important for everybody to want the industry’s success, not just say that we don’t care about the industry’s success. We just want the entitlements out of the industry. That does not work, and that cannot work. I think it’s a big concern when you see many big companies that have been fantastic in their history and how they haven’t been able to continue. These were well-run companies with well-run management, but the 21st-century challenges are new.

    Aravinda: I hear a lot of planters say that we’ll do everything you’re asking of us, but it has to be financially sustainable

    Rudra: It’s our job to make it financially sustainable. But it’s also our job to think as management, not just ask someone to solve the problems. Every management has a responsibility to keep the business successful, and it cannot be outsourced to anybody.

    Aravinda: In your opinion, how has the Indian consumer changed? How has consumption changed, and how has the branding of tea within the Indian market itself? What have you seen change? 

    Rudra: I think tea is the best product in the world to sell online. Five reasons.

    Number one is it’s a habitual product, so that you can subscribe to it. It’s a food product, so you can’t return it. It’s high value to weight product. It is a product you can gift, and it’s a product that doesn’t matter what your religion is or how old you are; it’s a good-for-you product. It’s a healthy product.

    Maybe coffee also is an equally good product but, our advantage is that tea has many more varieties. So in terms of being able to have many SKUs, small MOQs is an advantage that tea has over coffee online.

    The fresher the product, the better it is. So, not only online, but online straight from the farm.

    And also, by the way, it’s the most consumed product in the world when it comes to, you know, the daily consumption of any one product more than salt or anything. So all of that together, it is a product that will make a lot of sense online. But now the thing is, it may evolve significantly. Maybe the last mile may not be online or some other aspects, but I think producers thinking about it are doing the right thing. Many of us will succeed, and many of us won’t. But I think the journey, the trajectory of this business, is to take this business from being treated like a commodity to a very personalized product.

    See Luxmi Tea Now Available Online

    Luxmi Tea is the official name of the company but the brand is Luxmi Estates because I want to say that these teas are from estates. These teas haven’t been bought by someone and packed and sold.

    — Rudra Chatterjee

    Aravinda: Right. And in the context of Indian tea, what do you think brand India tea needs right now?

    Rudra: Number one: Why isn’t Indian tea available outside India? When I travel abroad, I rarely see packages with Indian tea on them. You see Italian olive oil and Swiss chocolates.

    Now you also see cheeses from around the world, but why don’t you see Indian tea? I think the key aspect is that certainly the supply chain to which Indian tea was sold.

    The tea’s been sold for a long time. Just like everything else changes, this will also change, and we just have to figure out how it will be. It’s not going to be necessarily the same.

    The positive side is there’s this notion that I used to hear that young people don’t drink tea. That’s not true. I don’t know why that gained any credence. I think young people are reducing the consumption of alcohol and sugar drinks, and they’re reducing the consumption of plastic bottles and all of that. Tea is agnostic between hot and cold. Like I tried this 24-hour steep silver tips imperial from Darjeeling, the best tea I’ve had in a long time. And it’s completely different from the tea I usually have, but if it’s great Darjeeling tea, it’ll taste great if you let it bloom and evolve in the right way.

    Aravinda: In the context of the larger industry, how do you view the domestic market, and how do you think we can make those connections between the Indian consumers and the Indian tea producers stronger and more effective?

    Rudra: I think it has to be through various ways. And there’s not one Indian consumer; there’s not one Indian producer. There are going to be different kinds of Indian consumers and different kinds of Indian producers. There’s one thing that is generally true about the Indian consumer; they will go after authenticity and good value. They will go after freshness, which we need to drive at.

    In terms of Indian producers, good tea is appreciated. Every year we can see that. The price difference between the best and the rest of the best and the top decile versus the bottom decile is a V-shaped curve. So that is saying something. And we have to hear what the customer’s saying and then decide what resources do we have to take action to meet the customer’s requirement. There are all kinds of customers for all kinds of producers, so we just have to keep the right connection.

    *The Rugabano Tea Factory is located in the Karongi district in Western Province, Rwanda.

    Luxmi Estate

    A Heritage of Taking the Path Less Traveled

    In 1912, when the tea industry was predominantly British, PC Chatterjee founded Luxmi Tea as an Indian movement for self-reliance.

    Tea making was characteristically British at the time — sola toupees, burra sahebs, and sundowners. Luxmi was born out of PC Chatterjee’s quest to make Indian tea a tool in the Satyagraha movement and to break the British monopoly.

    With a tract of land in Tripura to his name, he began cultivating tea independently, without management agencies or advisors from London. Little did he know the extraordinary legacy he would create and set into motion with Luxmi.

    Other members of the Indian freedom movement — Assamese and Bengali students who rebelled against British rule, joined his company, then called Indian Tea and Provisions. What started as an expression of freedom from the British Raj has now come to stand for the freedom of spirit.

    — Luxmi Tea Company

    Link to share this post with your colleagues

    Signup and receive Tea Biz weekly in your inbox.

    Rudra Chatterjee
    Never miss an episode