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Sparkling teas: How a Ludhiana tea brand is earning its name with premium blends

Ludhiana-based Freshleaf Teas has served over 2.5 million customers. It looks to create a space for itself in the crowded tea market with sparkling teas.

Sparkling teas: How a Ludhiana tea brand is earning its name with premium blends

Monday June 10, 2024 , 5 min Read

India’s love affair with tea is nothing short of epic. It has grown over the ages to become a household beverage, popularised by legacy brands like Red Label, Tata, and Taj Mahal. Masala Chai was also crowned one of the most popular non-alcoholic beverages the world over by food guide TasteAtlas. 

Now, a new crop of direct-to-consumer brands is giving the humble tea a fresh spin. Whether the premium single-estate origin teas or artisanal brands serving infusions, more players are making space in India’s tea market, which was valued at $11.1 billion by IMARC Group in 2023.

Brother and sister duo Muneet Arora and Balkirat Singh too decided to bring something new to the tea market, fuelled by their shared love for the beverage.

“Despite the presence of numerous traditional tea brands, we felt the tea industry lacked innovation. Observing how Starbucks revolutionised coffee, we saw an opportunity to reinvent tea for modern consumers," Arora tells YourStory.

In April 2022, they launched Freshleaf Teas with Rs 20 lakh of their savings, along with additional investment, to offer a diverse range of teas, including both sparkling and traditional varieties.

Singh, a Chartered Accountant and former finance and sales professional, leads the startup's growth and strategic financial management. 

What’s on offer

The Ludhiana-based brand offers 21 SKUs encompassing 18 varieties of premium tea blends, including traditional, herbal, chai, and sparkling tea—a mixture of tea and carbonated water. 

Some of its offerings include Himalayan Green Tea, Kashmiri Kahwa, Earl Grey, Assorted Box, Calming Chamomile, Turmeric Ginger, Cutting Chai, Cardamom Spiced, Lemon Honey Delight, Moroccan Mint, Tulsi Treat, and Turmeric Spiced. 

“With these flavours, we aim to give a modern twist to this basic commodity, offering wellness without compromising on enjoyment,” states Arora, who previously worked in design, and oversees marketing and product development at Freshleaf.

The startup sources its ingredients from regions including Darjeeling, Dooars in Assam, Nilgiri hills, and Kangra in Himachal Pradesh.

It claims that its sparkling tea, which is available in flavours such as lemon ginger and strawberry kiwi, contains 30-40% less sugar compared to other carbonated drinks.

Freshleaf

Freshleaf Tea packs

“We avoid artificial flavours and have partnered with a flavour supplier in Delhi for the R&D of our sparkling tea flavours. We have signed an NDA (non-disclosure agreement) with the supplier to prevent the production of identical flavours,” the Co-founder and CMO adds.

Prices range from Rs 80 for 250ml of sparkling tea, Rs 189 to Rs 249 for tea bags, and Rs 130 to Rs 999 for tea blends. The shelf life of the products is two years, “but we put 21 months on our packaging to account for production and distribution time,” notes Arora.

Revenue and presence 

Freshleaf primarily operates in north India and has catered to over 2.5 million customers, registering a monthly growth of 15-20%.

Its target audience is predominantly professionals aged 25-40, but counts mothers and the elderly as customers too. Its sparkling tea is more popular among younger customers.

Its products are available on major ecommerce platforms such as Amazon and Flipkart, as well as online grocery stores like Modern Bazaar and it has a presence in 550 stores in 40 cities.

The brand plans to expand to Bigbasket, Blinkit, Zomato Hyperpure, and Nature’s Basket. 

While the company didn’t disclose its turnover, the founder reports that 20% of its revenue is generated through online channels, while 80% comes from offline channels. 

Freshleaf works with 20 farmers to directly source ingredients and remove the middlemen to ensure quality. “Sometimes, multiple farmers supply a single ingredient to maintain freshness,” Arora notes.

“We pay farmers a premium of 5-10% above market rates when additional effort is needed due to low production or seasonal challenges. Our fixed cost agreements and advanced communication ensure stable and predictable income for farmers,” she explains. 

Freshleaf Teas prepares and packages 50% of its products in its Ludhiana manufacturing unit, which can process up to 100 tons of tea leaves per month, and outsources sparkling tea production to a Delhi facility with specialised equipment.

“Additionally, we outsource the printing and 50% of packaging because of the complexity involved in these tasks,” Arora adds.

The founder notes that the brand initially faced challenges in gaining market trust as the market is heavily cluttered with tea brands such as Organic India, Vadham and Twinings. 

“We overcame market challenges through regular sampling and in-store tastings. Noticing a gap in offline stores for whole leaf teas, we introduced quality products at competitive prices, meeting consumer demand and building brand trust,” she notes.

The startup sets itself apart from mass-market and high-end brands with its sparkling teas, which were introduced to offer a premium taste to a wider audience, as well as to appeal to a younger, urban consumer base. 

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It also invests in research and development and works with food technologists to create new and innovative tea blends.

“We conduct extensive sampling, receiving 10-20 samples daily, and it can take up to a month to finalise a single ingredient or tea blend,” the co-founder adds.

Conscious of the future

In step with the Indian tea market growing at a compound annual growth rate (CAGR) of 3.18% during 2024-2032 (IMARC), Freshleaf also plans to introduce new products, including chai premixes, by August and expand to newer product categories over the next year.

It has also collaborated with Nature’s Basket to expand its presence beyond north India to Mumbai and Bengaluru. It also plans to go international, starting with the UAE.

Freshleaf is also conscious of the use of plastic in its packaging. It measures its plastic footprint and donates an equivalent amount to rePurpose Global to ensure ethical waste management and become plastic-neutral. 

The brand also donates 1% of its profits to Ludhiana-based NGO Bhavya Devi, which focuses on education, women's empowerment, and healthcare

Last month, the startup raised Rs 1 crore in a seed funding round led by Inflection Point Ventures.


Edited by Kanishk Singh