[Startup Bharat] How this Assam-based tea startup is rooting for sustainability with cotton teabags

Come rain or shine - there is nothing like a cup of tea to soothe the soul.  The most popular drink of Indians, over 70 percent of the tea produced in India is consumed within the nation itself. 

According to a report by Eon Market Research (EMR), India consumed around 1.10 million tons of tea in 2019. The tea market is expected to grow at a CAGR of 4.2 percent and 1.40 million tons of tea is expected to be consumed by 2025.

Reasons enough for many startups to venture into the tea space- from selling premium tea blends to tea chains or cafes across India.

One such startup is Esah Tea, started by a 26-year-old teapreneur, Bijit Sarma, hailing from Mangaldoi, Assam. Esah Tea offers a range of single-origin organic tea blends that are carefully curated from 150+ local gardens and marginal tea growers. 

The brand currently offers a wide range of organic tea variants like Whole Leaf Black Tea, Green Tea, Oolong Tea, and White Tea. It also offers an array of flavoured tea products - Organic Assam Masala Chai, Rose Black Tea, Lychee Black Tea, along with some popular blends including - English Breakfast Tea, Chamomile and Moringa Tea. 

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Sustainability 

While most teabags available in the market are made from nylon or polymer-based materials, Esah is making a difference with its cotton teabags.

Researchers have increasingly suggested nylon teabags are very harmful to health. It can release lots of unwanted radicals in the teacup. To this, Bijit adds,

“To promote an environment-friendly approach, we decided to replace the nylon or polymer-based materials with cotton ones. We developed pyramid organic cotton teabags made from pure organic and handmade cotton. It contains only pure cotton, which is just cellulose, thus it doesn’t release any harmful radicals to your cup, and this is the future of teabags.”

In taking this decision, the startup also had socio-economic factors taken into account. As Bijit says,  

“We wanted to help small tea growers without the interference of a middleman. We are trying to empower these small growers by bringing transparency between the seller and the buyer. We are also doing our best to sell tea at a fair price both for the growers and consumers.” Currently, the startup works with over 150 small tea growers from the tea gardens of Assam.

In an additional boost, the company was selected to partner with Amazon Launchpad, a platform for startups and brands to showcase their products.   

Journey so far

Bijit, an ardent tea lover, completed his BTech from MM University, Ambala Cantt., Haryana, and returned to Assam in 2017. Understanding the market and seeing great potential in the tea sector, Bijit launched his startup - Ruloi Tea Trading Private Limited in mid-2017.  He wasted no time in starting to work with small tea growers to convert them to organic tea farming, and also created a marketplace.  

Bijit began small, showcasing his products in the department stores in Assam and distributing it amongst friends who lived outside the country. Soon, he met a few members from the SRD Group, a large Food & Beverage (F&B) business group based in Assam, who were intrigued by the idea of selling organic tea. 

This was a turning point for the startup.  

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In 2018, the SRD group provided Bijit with capital as well as office space, and the latter along with his 10-member team started working actively with the farmers and also focused on the branding aspects. 

A year later, the startup rebranded itself to Esah Tea. They even started exporting their products to different countries, with the first export batch heading to South Korea. The startup had gradually begun to make its presence felt in the industry and started gaining potential consumers from all over the world. 

In 2020, Esah launched its first D2C ecommerce store, with the intention of providing simple and convenient customer experience. 

“D2C makes it simple for brands to develop a unique marketing plan that allows them to access the market directly, without the use of middlemen or third-party providers,” says Bijit.

Esah Tea now showcases over 60 variants of tea straight from Mangaldoi, Assam’s tea gardens on its own website as well as online marketplaces like Amazon, Flipkart, and Snapdeal. Not forgetting their early days, the makers of Esah Tea have ensured the products are available at offline stores in the region, and also deliver to over 25 countries through its online store.

According to Bijit, what started as 100 customers in 2019, Esah Tea saw tremendous growth in its customer base on the back of its D2C ecommerce platform in 2020 with close to 6,000 customers, which has now grown multifold to 15,000 customers. 

“We are also shipping more than 12,000 monthly shipments of tea packets. We are currently exporting to the American Market (countries like Canada, Mexico, Brazil, etc.) at 50 percent, European Market (France, Germany, Denmark, etc.) at 20 percent and South Korea at 30 percent,” says Bijit. 

Challenges

On an average, the journey of a tea leaf from the gardens to a teacup is almost seven to eight months.  During the pandemic, as seen with many other manufacturing sectors, maintaining a huge inventory, taking stock of demand and supply, and maintaining social distance norms during multiple lockdowns was a challenge for the startup, which did take a toll on the business. 

However, digitisation and moving to an online platform created various opportunities for the brand. 

Funding and way ahead

The startup has an ambitious target to convert over 20,000 acres of land to organic tea cultivation in Assam, and onboard over 1000 local small tea growers by 2023.

“As for opportunities, we want to be one of the top brands in F&B services. We are aiming to be an online tea retail brand and target to build a network of 1000+ marginal tea growers. We are also trying to implement regenerative agriculture in the tea production and procession space,” claims Bijit.

So far, Esah, the first tea startup from Assam to raise VC funding,  has raised Rs.3 crore (around $400K) in a pre-series A round from NEDFI Venture Capital Ltd (NVCL) through its North East Venture Fund (NEVF).

The NEVF is a North East India focused Venture Fund that is a joint initiative of Ministry of DoNER (Development of North East Region), NEDFI and SIDBI (Small Industries Development Bank of India). It is committed to providing support to innovative and scalable business models along with building a healthy startup ecosystem for entrepreneurs from the region.

“Esah is producing some world-class tea products, maintaining the organic quality, and sustaining a strong market and loyal customer base. The brand has been performing well and appears promising in the longer run. The idea is to together work towards the holistic growth of the brand and revival of the industry at large,” said PVSLN Murty, Chairman, NEDFi Ventures, during the funding announcement.

According to Bijit, Taj, Tata Tea, Arbor tea and Adagio Teas are some of the brands it counts as competition.