More to tea than just chai, says Tea Trails co-founder Uday Mathur

Success Quotient is a weekly feature that appears every Friday on Firstpost, which looks at the pains and joys en route to success for a head honcho - whether a CEO, MD or an entrepreneur. The column looks at the ideas that helped launch a company, its highs and lows. After meeting with success with their first venture Eurokids, for pre-schoolers, Uday Mathur, 57 and some of his co-founders wanted to start off something new. With Tea Trails, a chain of outlets that offers 80 varieties of teas ranging from the popular favourites such as adrak chai, masala chai to the exotic white, oolongs and Darjeeling tea, Mathur feels at home and is excited with expansion plans. [caption id=“attachment_2462152” align=“alignleft” width=“380”]  Uday Mathur, Co-Founder, Tea Trails[/caption] According to data from Euromonitor, the packaged tea market in India is estimated at Rs. 12,600 crore yearly and is expected to reach Rs 17,600 crore by 2019. In a tête-à-tête with Firstpost, Mathur talks of his plans to educate the chai-lover and lure Indians away from coffee lounges back to their first love – a cup of tea. Excerpts from the conversation: What tempted you to get into the tea business?  I, and some of my co-founders at Eurokids - our earlier venture for pre-schoolers, wanted to move on to something new after it gained traction. In 2011, Kavita, my wife, took a sabbatical and wanted to study about tea as she had developed a passion for it. She travelled to tea gardens, went across the world to educate herself about all aspects of tea. Kavita piqued my interest with her insights about the tea industry. We realised that food capitals in the world like New York and San Francisco have over 50 tea lounges each while that is still a novel concept in India, which incidentally has the distinction of being the world’s second largest consumer of tea after China. We grow the finest teas in the world. Darjeeling tea is considered the champagne of teas – at a recent auction the highest quality tea was sold at Rs 1.25 lakh a kg. Yet we get only the lower grade CTC for domestic consumption. Not just that, we also have the unique distinction of ‘cooking’ our tea with milk and sugar! We, Kavita, Ganesh Vishwanathan, Sanjeev Potti and I, co-founded Tea Trails with an initial investment of Rs 5 crore in 2013. The name Tea Trails showcases the history of tea. We have 80 varieties of tea currently at our cafés. What did you hope to achieve with Tea Trails? When we decided to start Tea Trails, many well-meaning friends said that it would not work. They pointed to some well-known tea lounges that had closed down and remarked that it was a concept difficult to scale. But we realised that it was a matter of execution. We wanted to tell people there is more to tea than chai. We went ahead with our idea and our experience has been rewarding with a phenomenal increase in terms of consumer feedback, sales, etc. Currently, we have 8 company-owned outlets and two franchisees in Mumbai. The Indian tea industry and the beverage café market are currently valued at Rs 19,500 crore and Rs 1,800 crore respectively. Tea Trails operates in this space and has a first mover advantage. In our country, a coffee-drinking culture has gained popularity while we remain predominantly tea lovers. We are making an attempt with our offerings to educate the consumer to look at tea beyond chai. A lot of young people are increasingly exposed to different varieties of tea in their travels. At Tea Trails, it is not about serving a cup of tea. It is about giving customers an experience with exquisite range of teas from hot to cold and normal to extravagant. All ingredients are freshly pounded and blended into the tea. Though we serve 80 varieties of tea, we are ready with 150 new varieties. We have various blends, too. There is a lot of sampling available at our outlets. Do you recall your first cup of tea? Yes, I sipped on my first cup of tea when I was around 10 or 11 years of age. The elders in the family told us tea was not good for health and not meant for children. In fact, later in life I realised that they were wrong. Coffee has a high level of caffeine while it is only 1/6th  in tea. If you ask a coffee lover for his favourite coffee, there are more chances of him knowing just two varieties – latte or cappuccino. Tea as a variety is much more exciting with so many variants that come from the same plant. Tea has health benefits, of course not if we cook it with milk and sugar! We have a detox tea at Tea Trails that Kavita has blended with Indian herbs that we sell at Rs 100 a cup and has many takers. My favourite is Lapsang Souchong infused with smokey flavours. It reminds me of single malt. Besides cooking tea, what else do you think most tea lovers get wrong? Green tea must be had when the water temperature is 80 degrees. If it becomes 100 degrees, the fragrance and flavour will be ruined and it will taste bitter. Who is your target customer? It is the office-goer in the 25-35 age group. These are the people with resources and know their teas as they have been exposed to it during their travels. They are also conscious of what they drink and eat. However, at our outlets you will see college-going kids and senior citizens too. The latter come for English Breakfast, Earl Grey or exotic Darjeeling tea. Which are the bestsellers? Our bestseller remains chai. When we say that Indians are tea lovers, what we mean is that we are chai lovers. As a business model, we offer chai that most of us are familiar with. However, we have 12 varieties of chai.  Our base price is Rs 70 for adrak chai to Rs 200 for a Darjeeling white. We have also started merchandising and around 20 teas are available with prices ranging from Rs 400 to Rs 1,500 for 50 gm packs. You also sell coffee at Tea Trails. We offer filter coffee for those consumers  who are coffee drinkers and may accompany their friends to our outlets. We can’t disappoint that customer. If any of our outlet sells, say 200 cups of tea a day, we get requests for 4-5 cups of filter coffee daily. And the best compliment we get is that our coffee is very good! You recently raised $1 million seed fund. We plan to use the funds for our growth and expansion in focus markets with an aim to increase our network with over 250 outlets by 2018. We plan to open outlets at malls, commercial spaces and high streets. We are also looking at smaller kiosk formats at food courts. What were the revenues last fiscal? How much are you expecting in the next fiscal? We haven’t had a full year of operations as most of our outlets are only 3-4 months old. We expect to do a business of Rs two crore this year and expect revenues to go up to Rs 10 crores next fiscal. We plan to come out with 50 stores next year and move to other cities like Pune, Bengaluru, Hyderabad, Delhi and Chennai. Mumbai will have 70-80 outlets in the next couple of years. We plan to open 500 outlets in five years. Of these, 80 percent will be franchisees and 20 percent company-owned outlets. Tea has become your passion now. Is the business your de-stressor too? I love what I do. However, I love tennis as a sport. I have been playing tennis from my school-going days. I am currently seeded 18 on the All-India veteran circuit team, . I play one and a half hours of tennis every day and participate in seven to eight tournaments in a year. Tennis is serious play for me.