Brook37 founder Mou Dasgupta says the new era of tea is not just introducing tea but also explaining how you consume it. We are saying that yes, traditionally, you drink tea from a cup, but why not break the barriers and drink tea from a champagne glass or chill the tea and drink it in a martini glass? Make other drinks using tea. Open up your imagination; don’t be bound by the past. Take our old drink, modernize it, and just do fun things with tea.
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Mou Dasgupta, founder of Brook37 The AtelierMou Dasgupta, founder of Brook37 The Atelier
Elegance Begins with the Leaf
Mou Dasgupta is pursuing her passion for tea after 25 years of trendsetting corporate leadership in the financial services industry. She developed a love for fine-quality tea while living in West Bengal, India, where she attended university in Calcutta. She trained in the sciences and holds a master’s degree in software engineering. “Brook37 is proud to bring fresh thinking and an ethical and sustainable mindset to all we do,” she says. “Our unparalleled tea selection of flavors, aromas, and colors from around the world, along with exquisite packaging, help you choose a positive and aspirational lifestyle.”
Dan Bolton: Thank you for taking the time to talk about your vision of a new era in tea and how it led to the launch of Brook37, a premium brand sourced directly from suppliers in the most famous of India’s tea-growing regions. What are some aspects of this new era?
Mou Dasgupta: In describing a new era of tea, I want to talk about tea reimagined in the USA.
The new era of tea is not just introducing tea. It’s also explaining how you consume tea. So we are saying that yes, traditionally, you drink tea from a cup, but why not break the barriers and drink tea from a champagne glass or chill the tea and drink it in a martini glass? Make other drinks using tea. Open up your imagination; don’t be bound by the past. Take our old drink, modernize it, and do fun things with tea.
That’s how I feel that the younger generation may find it more interesting. When I go to a friend’s house, they offer me Diet or a regular Coke, or maybe a club soda as a non-alcoholic beverage. I want people to offer tea. It is a non-alcoholic beverage with fantastic health values. So, keep our tea caddy next to your wine bottle and open a beautiful tea caddy when your special guests arrive. That’s how I want to position tea.
Dan: You grew up drinking good tea.
Mou: I moved to the USA from a place that is about 300 miles from Darjeeling about 25 years back, and one of my big struggles was to find the high-quality tea that I used to drink before I moved to the USA.
Over here, you can find great coffee stores everywhere, but finding a great tea shop takes a lot of work. Tea is also looked upon as a health drink. It has many health values, but I want to make people understand that tea can bring people together. Tea can reconnect people and rejuvenate; it’s a drink that can elevate the moment, and it’s a non-alcoholic drink with value like fine wine. And you know, in wine, the quality of the grapes, the soil, and the weather drive how the taste and the flavor will vary. Darjeeling tea is exactly like that. I want to make people aware. I want them to taste Darjeeling tea and see that it’s a different drink altogether.
Dan: Many brands position themselves as premium, but only a few succeed in conveying the elegance visible in your color palette, your choice of tins, and a clever pairing of an engraved traditional silver-plated infuser with a modern silver measuring spoon in your gift set Will you discuss your view on what makes a tea premium?
Mou: First, elegance starts with the look of the tea leaves. A high-quality tea leaf is not dust. It’s a long, beautiful leaf, and it is rolled to perfection. It’s dried to perfection. It’s hand-picked at the perfect time. Recently, on a trip to Darjeeling, I noticed a tea leaf plucked before the rain could taste and smell different than a leaf plucked after the rain. It’s the elegance of flavor. It’s the elegance of taste.
To that, we added silver accessories. When you drink a high-quality Scotch or a single malt, you could drink it from a plastic cup, but most drink it from a beautiful crystal glass. High-quality Darjeeling tea demands that kind of setting. It is more than just flavor and not just the tea’s color. It’s also the accessories, all of them, that elevate the moment.
That’s where beautiful packaging comes in and where the look of the tea matters. So that people feel it’s a beautiful moment that they’re creating, whether it’s with their children, whether it’s with their grandchildren, whether it’s their significant other, or by themselves. Tea is an elevation of the moment — any moment.
Dan: You have a wonderful founding story. You first found success as a software engineer, angel investor, and executive director of JP Morgan Chase and Morgan Stanley before directing your talents to tea.
Mou: My primary inspiration is that for 25 years, I have been looking for this kind of tea. I had a very hard time finding Darjeeling tea like the tea that I enjoyed in India. In our Country, in the USA, the tea comes through many hands a lot of the time, and every time you open a bag, the quality of the tea goes down.
When I left my job and decided I wanted to do something on my own, something more meaningful, tea kept coming back to me.
I realized this was an opportunity because all the best quality teas get picked up by Germany by Japan right away from Darjeeling. In most cases, they don’t come to our country. We are deprived of that highest quality. Brook37 is buying exclusive small lots of seven to ten kilos of the best Darjeeling offers.
That’s what drove me. I don’t want to just bring the tea; I want to bring the whole experience with it. We call ourselves the Chanel of tea because we present tea as a high-end beverage that celebrates life. We have created a brand that will catch everyone’s attention, all the sensorial organs, the look, smell, touch, and feel all of it together. That’s what inspired me.
I didn’t want a company that was all about money or finance. It was not a motivating factor for me. I wanted to have a responsible company. There is a saying that we do not inherit nature or the environment from our ancestors; we borrow it from our children.
I didn’t want a company that was all about money or finance. It was not a motivating factor for me. I wanted to have a responsible company. There is a saying that we do not inherit nature or the environment from our ancestors; we borrow it from our children.
The environment that I’m borrowing from my children, I want to give it back in good shape in a conscious way. From day one, we have been building a conscious brand, plastic-neutral, biodegradable, and reusable packaging, certified by 1% by the planet, etc. It must be empowering, and it must be socially conscious.
“There is a saying that ‘we do not inherit this earth from our ancestors, we borrow it from our children.’ I want to give back in good shape the environment we have borrowed from our children.”
– Mou Dasgupta
Dan: Will you share your inspiration for creating a women-led team with listeners?
Mou: It’s not a conscious decision. I didn’t come in saying that I was only going to hire women. But 90 percent of the people working in our brand are women. We found the best talents who happen to be women. The best tea pluckers are women, and the best tea packaging laborers are women. Our tea sommelier happens to be a woman. Our photographer and videographer is a woman. Even our marketer and our social media leads are women. I just happened to have a team of women I found to be the best at their work.
By elevating Darjeeling tea, we also elevate the people back in Darjeeling. It’s with pride that we produce one of the best teas in the world. I want them to share that sense of pride. Darjeeling should be a name that stands above the rest, not just a tea; it is a distinguished beverage, and hopefully, Brooke37 will give that to them.
Dan: Will you discuss sourcing? That’s a challenge in Darjeeling right now, with many of the 87 registered estates in distress, several recently acquired, and all experiencing an overall decline in production from around 10 million kilos 10 years ago to six million kilos in recent years.
Mou: My primary goal is to bring the best quality tea in my country to the USA. And it is not to promote Darjeeling’s biggest tea growers or tea estates. It’s really to work with anybody who is growing high-quality tea.
We are looking for small growers. We’re looking for entrepreneurs innovating new types of teas and bringing them here at a good price. I do feel that, at times, the prices are compromised. When someone gives 70% to 80% off the price of tea, that is just dust of Darjeeling tea, and calls them Darjeeling, they are diminishing Darjeeling tea to the world. Sometimes the price paid at the back end is too low and unfair to the tea growers.
We are ready to pay $100 for a bottle containing five glasses of fine wine but not ready to pay $100 for 40-50 cups of the finest tea. If we don’t elevate Darjeeling to that point, people in the back end will always suffer.
I alone don’t have the power to eliminate poverty in Darjeeling. I make sure that I at least do my part. I promote their work, I promote their tea, and I promote their small businesses because I am also a small business owner.
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.”
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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.
Few people know that the cuppa tea they cherish is in trouble.
Every mature industry experiences rising production costs, saturated markets, stagnant prices, and a lack of tech intervention – in tea, the over-dependency on subsidies, risk-averse attitude, complacency, and fear of change add to these troubles.
Other industries have found solutions through innovation (product, material), new technology (cloud, platforms, software), market expansion (exports, new manufacturing hubs), and cost-saving (zero inventory, automation). However, the woes of the tea industry seem bottomless.
One of the reasons for this endless nightmare is that since tea is an old industry, many interest groups further their agenda. Due to a lack of consensus, no single entity – the brokers, tea associations, government bodies – has been bold or creative enough to pull the industry out of this rut or at least lead the way.
Sandip Thapa
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). Thus, many from that buyer segment, flushed with funds, have bought gardens, opened factories, and turned producers. However, the situation is such that they, too, feel the cost vs. poor price pressure.
The old way of doing business needs to be fixed. The sales cycle is far too long, large buyers have cornered the trade, exports usually go to traditional markets, no transparent mechanism for credit disbursal, and no grading or packaging standards innovation. The list of problems is very long.
The need of the hour is a fresh perspective. Green shoots are emerging. Progressive proprietary garden owners have taken the D2C approach and come out with their brands. They are exploring e-marketplaces like Amazon, Flipkart, and even Facebook or setting up their platform and app. Start-ups are directly working with small tea growers, advising them on best practices, plucking standards, and selling those quality teas to consumers while sharing a portion of the premium with the STGs. Many retail start-ups have cropped up and helped the industry by increasing consumption. Taking inspiration from the start-up culture, a few of the old-school plantation agencies have also forayed into tea bars and lounges. And there’s been a gradual shift from regulated auction platforms to private sales. In India, around 55% of total production is sold privately; the rest is through auctions. Private sales will keep growing in the future.
CuppaTrade (CT) is one platform that holistically addresses the industry’s problems. It’s a global B2B marketplace focusing on the entire ecosystem, not just bulk tea. It’s an India-based start-up with global ambitions. Within a short time, many producers across India, Nepal, and even Vietnam have found value in this marketplace. Their buyer base is increasing by 300% every month. The immediate benefit for the producer is that their tea is seen by the whole world and does not remain restricted to just a particular region.
One of the core values of CT is speed. Speed in the transaction process. Speed in arriving at a solution and execution. Speed in customer service and dispute resolution. Speed in listening to stakeholders and introducing value adds. This approach has brought down the traditional sales cycle by 75%. Here, the STPs can list the tea directly from the garden or factory and start receiving interest from buyers who know the ‘Mark’ and do not want to wait to see the samples. Buyers can also buy based on CT’s assessment of quality and cup. Provision is also there for buyers who wish to see the samples first before showing interest. On the other hand, if a buyer has an urgent requirement, she may post the details on the platform, and CT fulfills the same. These features are being offered for the first time in the tea industry through a digital platform. This brings convenience and pace to one’s fingertips.
CT believes small is beautiful. Small is hopeful. The growing segment of small tea producers (STP) makes a huge variety but needs more means and connections to showcase these teas to a large audience. They are hungry and take quick initiative. They listen and act fast. Thus, it’s a pleasure to work with them.
Siddhadevi Tea Estate, Nepal. One of many small tea producers selling bulk tea on the CuppaTrade online platform.
On the other hand, many buyers do not know so much variety exists at several price points simply because no platform or entity has exposed the small tea buyers (STB) to such teas. CT is bridging this gap. The marketplace connects the STP with STB directly. Without any middlemen, the STP enjoys a price premium, and the procurement cost decreases drastically for STB.
Traceability is a huge issue in international markets, where mostly blended tea is sold. The buyer needs more knowledge of whether teas are ethically sourced following correct GI norms. With Blockchain and AR, CT brings the manufacturing units closer to the buyers and provides authentic teas with full disclosure.
Another crucial problem is working capital, both for producers and buyers. CT resolves this issue with a tie-up with financial institutions. STPs are paid a portion of the total tea value as an advance as soon as the CT team inspects the invoiced teas. The rest of the value is paid after the teas are sold. The credit facility is also given to vintage buyers. This is an interesting space that financial institutions can explore further through either Bill Discounting or introducing long-term bonds based on the sold invoices. These bonds could be sold in rich consuming markets like Europe, the US, Middle East. In addition, a portion may be reserved for the stakeholders at a discounted rate so that they have an opportunity to earn secure, healthy profits after the completion of the tenure. This will also result in good behavior and increase stickiness to the platform.
It is high time that we explore non-traditional international markets. For example, Iran buys loads of orthodox tea; however, due to US sanctions has an issue with payments. In such a scenario, Dubai or UAE can be developed as an ‘export hub’ for that region. While tea is directly delivered to the destination countries, payment comes from a secure source like Dubai. Similarly, Canada, Australia, the US, and South-East Asia must be exposed to quality tea, not the tea-bag variety, but the robust, malty Assam or the fragrant, sweet Nepal. This calls for constant interaction, regular seller-buyer meets, a collaborative approach through country-specific associations, and a non-biased platform that gently binds stakeholders with the proper process and technology, addressing everyone’s needs.
Excellent Tippy Teas being sold through CuppaTrade. Left Donyi Polo, Arunachal Pradesh. Right, Siddhadevi, Nepal.
Many innovative approaches are required to take the industry to the next level. Cuppa Trade is doing its bit. Going by the initial response shown by the stakeholders, CT seems to be heading in the right direction.
Tea is a unique beverage. It’s entrenched in our lives. Its longevity is safe. However, as in any Agri commodity, the farmers’ prosperity and sustainability are paramount. Therefore, the tea grower and producer must be paid well before her sweat dries.
And whatever minutes it took you to read this article, know that globally, about 25,000 cups of tea are consumed every second. Every second. Maybe you also enjoyed a cuppa during this time. That’s the magic of this beverage. It’s huge, and it’s unifying.
“Many innovative approaches are required to take the industry to the next level. Cuppa Trade is doing its bit. Going by the initial response shown by the stakeholders, CT seems to be heading in the right direction.”
