Why blend in? Brothers stand out in the crowded tea market by brewing a brand with herbs
Keen to overlay the therapeutic benefits of herb on tea, Rupan and Raunak Oberoi decided to start Amaara Herbs, a platform that offers unique tea blends.
Startup: Amaara Herbs
Founder: Rupan and Raunak Oberoi
Year it was founded: 2017
Sector: Food
Funding raised: Seed funding
Based out of: Delhi
From neighbourhood nukkads to highway pitstops, from homes to getaways, India seems to run on chai. Be it tea connoisseurs or amateurs, India has tea options for all. And this is how one fine day, brothers Rupan and Raunak Oberoi and cousin Karan Chadha began discussing tea.
Karan, who had been working in the tea industry for close to seven years, was visiting Rupan and Raunak in Delhi. During that conversation, Karan shared how the tea industry had grown. That is when Rupan decided to visit Assam along with Karan and build a business around teas and herbs.
This led to the birth of Amaara Herbs, a brand that brings together different varieties of teas and herb blends.
Explaining why he felt the need to build a tea business, Rupan explains, “Our breakfast isn’t complete without tea. It’s the first thing (of course, after water) you serve to guests. You meet people or clients over tea. It’s also used as a medicinal drink — we commonly use adrak chai for cold, tulsi chai for respiratory illness, and green tea for acid reflux, to name a few.”
Why the blends?
Amaara Herbs offers tea blends with different herbs and fruits. The team had observed that when it comes to chai, people are finicky and like their cuppa a particular way. They also realised that green, black, oolong, Darjeeling, and Assam are the common requests.
The team decided to create a platform where people can get a cup of chai personalised to their liking. They believe that India is a land of herbs - Ashwagandha, Shatavar, Gokshura, Basil, Tulsi, Gotu Kola, and Stevia to name a few. It therefore made sense to blend the teas with Indian herbs.
Rupan adds that there is a lack of knowledge among people about the therapeutic benefits of these herbs. The export opportunity is huge and has potential demand.
Rupan and Raunak have been exporters of Indian FMCG and herbal products for over five years now. This made it easy for them to get the right blends and mixes. The market, nevertheless had its challenges, especially since the Indian tea market has several players currently.
Exploring the market
“We spent on initial market research, website development, warehousing setup, and inventory. On our website, each product page offers information about the kind of tea to educate people about what they are paying for. This is the reason that Amaara Herbs focuses on providing information rather than only packaging,” Rupan says.
To ensure that they get the best blends and brews, the team knew that they had to get the sourcing model right. Taking help from Karan and using his expertise in tea, the duo visited several plantations to source the right teas. Since Rupan had a good knowledge of herbs, he was able to procure herbs from the best vendors in the country.
The brothers visited plantations in Northeast India, South India, and other plantations in different countries and interacted with numerous tea masters and sommeliers. They carefully selected leaves that were of the highest quality.
The duo soon also realised that knowing the regular profit-and-loss statement of the business wasn’t enough.
Rupan says while it may appear that you are breaking even on paper, it doesn't mean the business will survive the following month.
“The key to a thriving company is to ensure that you understand your receivables, payables, and the net position at all times in order for you to plan ahead. The profit and loss, balance sheet, and cash flow statement are the foundations for monitoring a business turnover and making decisions,” Rupan says.
Packaging and distribution
Another hassle with a business like this was the packaging; it was important to ensure that the seal remained intact to retain the freshness of the tea.
Rupan says the delicate tea leaves and herbs require packaging that provides an airtight environment to maintain freshness and to keep unwanted moisture and aromas out.
“All our boxes have airtight stand-up bags that keep our tea safe and fresh - from the store to customer’s cup,” he says.
With herbs being a highly perishable product, the team ensured that the latest produce reaches the potential buyer within the minimum time span. In order to ensure the freshness of the teas and blends, the team decided to air as against shipping it. While this added to the cost, it helped retain the freshness of the teas.
Currently a team of 13, Amaara Herbs has a warehouse in North Delhi, from where distribution takes place.
Amaara Herbs’ retails products via several ecommerce sites, including Amazon, Flipkart, and HealthKart. They also retail via their own website, and the team claims a repeat order rate of 70 to 80 percent.
The team has placed their products in few a modern trade outlets of North India, and is now eyeing other cities as well.
“We are currently exporting our products to 13 countries across the globe, which includes the US and European countries. We have listed on various global e-commerce platforms, and now also have distributors in these countries. We export the packaging via air shipments for individual orders that we receive on our portal,” says Rupan.
Amaara Herbs also sells in the B2B HORECA segment.
The world of premium teas
According to a report by India Brand Equity Foundation, India is ranked fourth in terms of tea exports, which reached 232.92 million kg during 2015-16 and were valued at $686.67 million. Tea production hit 1,233.14 million kg in 2015-16, led by states like Assam, West Bengal, Tamil Nadu, and Kerala
The premium team market is pegged somewhere close to Rs 3,600 crore. It, therefore, is no surprise that there are several startups looking to take a bite of this pie. The list includes Teabox, Tea Culture of the World, The Kettlery, Tea Trunk, BuyTea, and Infinitea.
Rupan says currently the total produce of tea is at 1,233 million kg and exports touch over 230 million kg. He says that the export of medicinal plants and herbs from India has been quite substantial in the last few years. The growth rate for herbal medicines and supplements in 2016-2017 increased by 17 percent within the year.
All these factors make this a huge market to explore. The team, which started with an initial capital of Rs 30 lakh, has so far made revenues of Rs 10 lakh.
“We have recently launched Matcha Green Tea, Pyramid tea bags green tea, and loose leaf green tea. Black tea and Oolong tea are in the pipeline and will be launched soon. The business prospects are huge as we have international demand as well as domestic demand,” Rupan says. The cost of 500 gm of Matcha Green Tea is Rs 550.
Future plans
In the next three years, Amaara Herbs is focusing on commerce and setting up their retail presence in modern trade outlets in Delhi, Mumbai, Bengaluru, Kolkata, and internationally. The team currently is in talks with various distributors in USA, UK and a few European nations.
They are also looking to tie up with tea vending machines to use their tea at corporate offices.
“We will be launching a machine wherein loose leaf with herbs would be blended in a way that they provide the best taste,” Rupan says.
“We intend to grow rapidly not only in HORECA (Hotels, Restaurants and Cafes) but also at gyms and dieticians networks. We aim to grow as specialised tea company in the next 3-5 years and expect to be acquired by conglomerates/larger tea companies, which can take our brand to a large-scale distribution network,” Rupan says.