Be it the scorching heat or the chilling winters one thing remains constant- your favourite hot beverages, Tea & Coffee! Call it the morning wake-up call or the evening energy booster, tea & coffee are the go-to picks to keep you going. Irrespective of the gap the COVID-19 pandemic created in the demand and supply, the tea industry has witnessed a sharp increase in consumption due to its health and wellness message.
‘At-home consumption has increased dramatically compared to out- of-home consumption’.
Be that as it may, tea and coffee provide a feeling of comfort for many consumers in tough times like these which has currently led to its increased demand. Besides tea has been the most preferred drink along with kadha and coffee due to the preference for hot drinks as compared to cold drinks. Immunity booster teas were a much sought-after beverage.
The Pandemic – Challenges and Opportunities
Tea producers across the globe have been greatly affected by COVID-19, mainly because of national lockdowns and social distancing policies. There is a feeling of uncertainty that the trade and logistics restrictions have created in the market. This has greatly affected the export and import of tea caused a sharp decline in the out-of-home consumption at tea stalls, restaurants, cafes, hotels, offices and factories.
Having said that, at Octavius we made sure to undertake emergency response measures to prevent the spread of COVID-19 in tea communities- plantations, factories and packaging. This led us to witness a great boost in our sales.
Irrespective of the complete lockdown in April 2020, Octavius saw smooth operations with a sustainable growth pattern. The plantations, factories, etc were all running in full swing with all restrictions and Covid measures in place. Given that certain plantations were shut due to the surging covid cases in their tea gardens, the supply did not match the demand, thereby fetching the brand better prices.
The current rate of export duty and government policies
Being the two main beverages exported from India Tea & Coffee, the sectors have encountered issues with the rates announced under RoDTEP (Remission of Duties and Taxes on Exported Products) that is lacking in certain aspects especially now, in the face of uncertainty for exports. The pandemic has only exacerbated these issues. Iranian, Egyptian, Russian, US, UAE, and UK export markets were hit. There is a need to increase the RoDTEP rate so that the tea exporters can get some respite.
During the first ten months of this year, the number of Indian tea exports declined by 9 per cent over last year. The Tea Board has also nearly done away with supporting exporters & participation in overseas expos. This was a crucial way to locate new markets and buyers for Indian teas and to promote exports. There is a need to address this so that homegrown tea brands can grow their global footprints and
get the recognition that they deserve.
Budget expectations and suggestions
While the burdens incurred by Covid-19 may have been steep, the prediction for the global tea industry seems to be good. India’s tea industry is expecting a better second quarter in 2022 as retail demand has picked up across the country due to easing of Covid-led restrictions in most states. Indian tea has a large demand in export markets, but as a nation we are still ranked fourth in the industry. There is a need for the government to come up with schemes that facilitates the increase of tea exports from India. Retailing of premium teas through specialized Tea Boutiques should be encouraged and financially supported by the Tea Board. It is imperative to support the initiatives of the tea industry Providing financial support for the establishment of tea lounges in different parts of the country during the upcoming budget period. Additionally, agriculture, which is the backbone and the most labour-intensive industry of our nations, should be incentivized and company dealing in the end products of this sector should be given more incentives.
Strategies to combat the influx of brands
Several new entrants and tea startups are appearing in the segment. There is a vast choice of teas, tea gifts, etc. available to the consumers. However, when it comes to products like tea, the customers are still looking for quality products and brand trust. While there are new entrants in the market, they lack the experience required in the field. A majority of these brands are not backed by their own tea plantations with tea experts. This upper hand in experience in the field gives us an edge over the new companies in terms of high quality offerings and premium blends. Established companies like Octavius with a rich legacy, heritage, experience and experts acutely understand the customer needs and ultimately help build a strong trust in the brand.
Penned by
Mrs Ekta Jain, Chief Marketing Officer, Octavius Tea
Divya Khanna is the youngest member of the team, with a background in political science. She has joined High on persona print magazine in order to gain hands-on experience in various aspects of editorial coordination as associate editor of the magazine and news site. She has a penchant for writing and enjoys meeting new people and interviewing celebrities. She has a passion for writing, she has an eye for details, loves traveling, and a quick learner. She comes from the Mecca of Indian Journalism, Delhi.
Email: [email protected]
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