How these experienced entrepreneurs went on to build a Rs 6.7 Cr premium tea brand
It is a trend today among millennials to start out young, build a million- or billion-dollar business, and leverage the startup ecosystem. But people often forget that with age comes wisdom. And having experience and wisdom can help you run a long-term business in the right manner.
Ashok Mittal, Co-founder of Teamonk
With vast experience in the industry, Ashok Mittal, Amit Dutta, and Nalin Sood, founded premium tea brand Teamonk in 2017. The Bengaluru-based brand offers more than 50 variants of premium tea, 45 of which are tea-based and the rest 10 are herbal infusions. The Darjeeling, Nilgiri White, and Oolong teas are its top-selling items on Amazon and.
The company clocked a turnover of Rs 6.7 crore in the FY20. The company was started with an initial investment of Rs 50 lakh contributed by promoters and other associates who subscribed to the equity. It also raised $1 million in its pre-Series A round led by Roots Ventures and former McKinsey Chief Rajat Gupta.
Today, the brand is present across India and in the international market including the US, the UK, Italy, Canada etc.
The turning point
Ashok says that unlike coffee, which has undergone a lot of innovation in terms of both products and service to excite customers and particularly the younger generation, the tea industry has largely remained traditional.
“And that is why the growth curve for tea consumption has flattened and despite an increase in production, the industry continues to face a crisis,” he tells SMBStory.
Ashok, who has over 40 years of experience in the tea industry, having worked with Unilever tea division for a long period of time, says that things took a different turn in 2016 when the industry started experiencing a change in consumption trends. Consumption shifted from milk and sugar to green and white teas. “People wanted to consume tea that is healthy, nutritious, and contains a lot of anti-oxidents,” he adds.
Ashok and Amit had seen similar trends in the international market but they now saw a business opportunity in India. In 2016, they started doing the necessary research and launched the brand in 2017. Nalin joined them a little later.
Speaking about how the name Teamonk was zeroed on, Nalin says, “The name is derived from the Chinese monk who came to India and discovered tea. In addition, we want our customers to experience the benefits of drinking healthy tea. They should feel like a monk, who is very calm on the outside but has a lot of energy.”
The value of grey hair
The Bansals, along with the likes of Ritesh Agarwal and Bhavish Agarwal, have created the perfect stories for India which are all about making it big while young. Indians are in awe of the Indian startup ecosystem, but the value of the hair turning grey cannot be underestimated.
Ashok says, “We were not young but had a lot of experience. I and Amit took this big challenge of starting a new venture when almost all our hair had turned grey.”
Teamonk, he says, is for tea lovers and tea connoisseurs. “We also wanted to build an Indian brand that would eventually be taken to the international market which is much more matured and bigger as well.”
Networking, ecommerce, and trust
Three factors that helped the business in scaling growth were networking, an ecommerce-first strategy, and trust.
Ashok says that they realised right in the beginning that a lot of capital would have to be invested in marketing. Moreover, though the company built its own website, it also partnered with established players like Amazon, Flipkart, andto create greater awareness around their brand.
Nalin says that the ecommerce-first strategy has worked wonders for the company. He says, “We had a clear plan to be fully focused on ecommerce so that we can build a sizable consumer base. Also, the traditional route of trade involving several distribution channels is only feasible when you have deep pockets.”
Ashok also says that his experience in the industry helped him gain trust with the stakeholders of the industry and establish a robust network. He says, “My experience in the industry helped me know about practically everyone. So there were no trust issues with the plantation owners and other stakeholders.”
The longleaf teas are sourced from mountain regions of Darjeeling and Nilgiri. Soon, they will start sourcing from the plantations of Kangra Valley as well. The raw materials are collected, curated, mixed with herbs and spices and finally manufactured in the company’s facility in Bengaluru.
“We don’t want people to drink our tea reluctantly like medicine. We want people to enjoy every sip of it, and have made it healthy and delicious at the same time,” he adds.
The company also claims that its tea products are 100 percent pure and natural, and they don’t use any synthetic flavours.
Spearheading the premium tea market
India is known to be a tea-consuming country. In that case, is it given that the market is crowded? The answer is both a yes and no.
While the market for traditional tea consisting of brands like Tata, Red Label, and Tetley is huge, the market for premium niche brands is relatively smaller.
Nalin says, “The speciality tea makes up only four or five percent of the whole industry. So, there is a lot of headroom for growth and more players can also be accommodated.”
Teamonk competes with brands such as Brewhouse, Teabox, and Vehdam Teas.
The last three months have been difficult for all businesses but a little anticipation and optimal stocks up helped Teamonk tide through the COVID-19 crisis. The ecommerce-first strategy helped the company during the pandemic even as retail took a big hit.
The business is up and running now. It plans to launch itself in the South-east Asian markets and Australia. The company has also received product clearance from the UAE authorities.
The company is also working with the National Institute of Nutrition to develop tea products that help in boosting immunity and help in weight management.
“We want to leverage the heritage of India in terms of the Ayurvedic legacy that affects the overall health and wellness of our customers.” says Nalin.