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By TPCI | October 22, 2019

Jivraj Tea Ltd. is one of the leading Indian tea companies known for its unique and custom tea blends, which have helped it build a strong brand presence in domestic and export markets. Today the group is marketing its products through 272 authorised distributors & servicing above 30,000 outlets in India. Its products are making waves across North Gujarat, Maharashtra, Rajasthan and Karnataka and also beyond Indian shores in countries like USA, UK, Canada and South Africa.

Mr. Pathik Shah, Director, Jivraj Tea Ltd. talks to IndusFood and shares his journey so far, along with some of the major hiccups faced by the Indian tea industry at large. He also gives some interesting insights on the demand and growth patterns, and why it is imperative to invest in branding of some allied ingredients in the tea industry. Below are some excerpts from the interview:

IndusFood: What was the inspiration behind the brand "Jivraj Tea" when it was founded?
Pathik Shah: In earlier days, tea was sold only in retail shops. There were different kind of bowls numbered as bowl 1; bowl 2; bowl 3 and so on; where each bowl stored different blends of tea. In the same context, the tea kept in bowl no. 9 was very famous as Jivraj Tea. I can say that it was a hot seller. And from here, the idea was triggered to give it the brand name - Jivraj9.

IndusFood: How did the business launch and evolve in the initial years?
PS: My grandfather Late Shri Sureshchandra Jivraj Shah, the founder of Jivraj Group, saw a dream of being the leading tea brand of the nation even before independence, and with his constant and consistent endeavours, he made it possible. He started from retail shops and right from the very beginning, envisaged a bright future for the group. The group introduced packed tea deploying the most modernized process and insightful strategies. In fact, we were the first one to launch 1 kg packs of teas in an era where only 250g and 500g-packs were available in the country. Later, we also introduced 5kg-bulk packs in the market. Today, we see a huge demand and growth in Rs. 5 and Rs. 10 tea packs, as well, in the coming years.

Furthermore, subsequent to liberalization in 90s, the retail segment also started to bloom. So, we thought of utilizing this segment aggressively through distribution. My father then took the plunge into distribution and we started off with Surat city and its surroundings. Soon, we marked our presence in the entire Gujarat and adjoining suburbs. Eventually, we saw our growth spread to Maharashtra, Rajasthan, Karnataka and Tamil Nadu. Today, the group is showing strong presence through 272 authorized distributors & servicing above 30,000 outlets directly across Gujarat.

Today, the group is also spreading it's aroma of rich taste and quality beyond Indian shores in countries like US, UK, Canada and South Africa. We strive to introduce new products or tea into the store frequently and keeping them in the loop of the mature growth stage of market. The company today also has an eco-friendly tea store providing organic and quality packaging where the aroma of tea remains sustainable. I am glad to announce that today we are a Rs 350Cr+ turnover company, where from one shop today, we sell our branded tea to 50k + shops!

IndusFood: What were the major challenges to growth and expansion and how did you meet them?
PS: The recent challenges have been the hiccup that the tea industry is facing as a sector. In this industry, the major cost incurred is that of labor. In fact, if the recent updates in the industry are to be believed, the government is also going to increase the per day labor wages!

Another major challenge is the pricing. This particularly is triggered by the general perception of tea which hovers in the minds of the common strata of consumers. People generally don’t want to pay for premium tea! In fact they are not open for the concept of “premium” in tea ranges unlike coffee. You see, there are not even 1,000 tea lounges in India, whereas coffee has good presence in the lounges.

So, making tea as a branded & premium commodity remains the foremost challenge and concern, not only for us but for the entire industry at large. However, dealing with high adulteration in tea, which has deeply traversed our markets, remains another big challenge. Nevertheless, FSSAI has come with some more stringent norms regarding the quality standards of tea, but the scenario is yet not very favorable.

IndusFood: How do customers ensure that the tea that they buy is the best-quality product?
PS: See generally a good quality tea should have a good strength, body, color and aroma briskness and particularly good blooming appearance. It should, ideally be of copper brown color; and not at all black. There are only a very few selective brands who source good quality teas and source teas which have Rainforest Alliance certification and Trustea certification. Jivraj 9 sources majority of their teas from these certified producers. Besides, FSSAI certification should also be looked-for by the customers while purchasing tea.

IndusFood: What transformational changes has the business undergone since its inception in terms of product portfolio/innovations, reach, brand equity, USPs etc?
PS:  Flavor, aroma, strength; these are the three USPs that the products of Jivraj9 Tea group come with. Moreover, it is a fact that we provide real authentic tea under our brand and not just powders to fool the customers that has made us so much popular among our clients. It is, in fact, this real authentic tea that we offer to our customers which makes our market presence so strong.

We have also taken a plunge into the ready-to-drink segment with our instant-tea premixes launched in the market. This tea would be kind of three-in-one product under ready-to-drink segment. It would be a mixture of milk powder, flavor and sugar. The consumer would be just a minute away to consume the aromatic tea. One may add warm water to the mixture and the tea is ready! In fact, it was very recently that we launched a premix plant also, which is earmarked for the manufacturing of instant tea premixes. Our instant tea product shares the shelves in ITC, Railways, Indigo Airlines and also in the export markets, majorly US, Saudi Arabia, Canada, UK etc.

Furthermore, we will soon be particularly entering into the health and wellness segment i.e., the green sector with tea-bags, white tea and Oolong tea as others. We are already prepared with the packaging designs and would be soon out with an invigorating product in the market.

Coming to business transformations, there has been a major shift from the general trade to the modern trade. Initially our business was generally controlled by the general trade. However, today 25-30% of our sales are coming from modern trade, which was merely 3-5% of general trade around 8-9 years back. So, in a nutshell, consumers are more inclined towards formats such as Big Bazaar, Metro, Reliance, D Mart, etc.

IndusFood: How has the brand progressed on the international front? What are the key export markets you are targeting for your products and why (domestic and international)?
PS:  The exports of tea contributes to around 7% of our total business. However, tea is a very scientific business. You have to spend years and only then will you understand the arena of right selection of tea. And thankfully, we now have decades and decades of rich experience in this sector and we rightly know where to source the right quality tea leaves from. To mention, we procure the best quality tea directly from the farmers of Assam. It is, thus, the best quality of our branded tea that makes it high in demand across the globe.

We are currently selling our tea in good numbers majorly in countries like US, Canada, S. Africa, UK, Australia and Dubai. We see our export business growing by three to four times in the next 3-4 years. In fact, Jivraj has a very well-known face in S. Africa, US, Canada and UK .

IndusFood: How do you see the growth in the food and agro processing industry from India? How is it expected to reflect on the exports front? Also please let us know your perspectives regarding the Indian tea industry.
PS: Particularly, in agro and food processing industry, I think India, being majorly an agrarian economy, has a good scope. The kind of wheat, rice, turmeric, spices etc. that we produce is unmatched and unprecedented. So, the processing sector is deemed for growth, provided we ensure quality. People should invest in infrastructure and get their labs, plants and factories BRC certified. Also, we should look for exports to big global chains such as Walmart and Woolworths. To mention, today they get their major supply from Europe. However, we, the Indian players, shall strive to be their biggest suppliers soon.

Besides, the green tea segment has definitely evolved but it is still only a Rs. 500 Cr market in India. It is not yet mature. Yes, we are shifting to that paradigm where people are now moving to consumption of two cups of black tea and two cups of green tea a day rather than four cups of black-milk tea, which used to be the scenario earlier. However, people are still stuck to a “kadak” kind of tea which gives them a kick in the morning!

It is good that green tea and other healthy teas are now being promoted by doctors and dieticians a lot.

IndusFood: How do you plan to expand in the near future?
PS: After gaining presence in states like Maharashtra, Rajasthan, Gujarat, parts of Tamil Nadu and Karnataka in India, we have also started in Goa and Hyderabad around a year back. Besides, it was very recently that we launched a premix plant earmarked for instant tea. For this factory setup, the company has procured new land to build a state-of-the-art set up. With this we have already embarked on the journey of expanding our business to just double in numbers.

Another major expansion is that of a procurement of around 1 acre land in Bangalore to specially cater to distributions, majorly in S. India.

Furthermore, we are recently focusing a little more on advertising through various platforms such as outdoor advertisements, electronic media, and even digital awareness and marketing. These are basically the tools which we have added in our expansion strategy so as to ensure maximum reach and thus take the brand to the next level. So, since a few years, we have been investing around 4% of our total profit into sales promotion, consumer promotions and marketing annually.

IndusFood: Can you please name some product(s) that needs shelf space and marketing attention?
PS: Indian turmeric and moringa are two major commodities which need extensive marketing and branding. Moringa is a herbal plant, which is majorly produced in the area of Tamil Nadu in India. We also introduced moringa tea a few years back. But it did not work out and we found that the major missing part is the awareness about such herbs among the masses! To your surprise, it is even better than “Tulsi” for one’s consumption.

Another thing is that we have to reach out to Europe for sourcing various essences of tropical fruits like lemon, as they are perceived to be better produced there. I don’t say they are not available here in India, but then the flavor differs. So, if we can grow better quality tropical fruits under better manufacturing habits & techniques by using fine raw materials, we would replace the import requirements of such essences with our indigenously grown best-quality fruits.

IndusFood: Have you participated in IndusFood earlier? Please share your experience. Is there any product to be launched in IndusFood’s upcoming fixture in 2020?
PS: This is third time that we are participating in IndusFood. Worth mentioning, we got our major buyers especially for our instant tea premixes through IndusFood. In fact, every year, we get 2-3 new buyers, at the least, through this excellent platform. From the last three years, I was searching for buyers in Australia. It was only through IndusFood that I could find one in Australia. Today we are doing great in Australia. Thanks to IndusFood and team TPCI for their dedicated work and commitment.

Furthermore, with our participation confirmed in IndusFood 2020, we would like to explore some more tie-ups in countries like US, Canada, UK, and Europe. We also see Australia and New Zealand, combined together, as a very good market not only for us but also for the tea industry as a whole. Other potential areas that can be tapped by the industry at large are Middle East, Iran and Russia.