Modern ‘Chaiwallas’ leading the Café Biz

Still, till a few years back, ‘chai’ was considered a ‘desi’ drink which was preferred by only the elderly, not by the in-crowd and the youth. It was in 1990s and 2000s that India saw a boom in the café culture. The mushrooming and popularity of coffee shops pan India made coffee the preferred drink of the urban youth. The ‘chai tappriwalas’ could not even stand a chance against the hi-fi café brands. 

Image Makeover for Tea

It was around a few years back that a few new-age entrepreneurs recognized that although being a country of tea-lovers, India still lack in the tea café culture that was so much appealing to the youth in particular. This made them take a lead in giving this traditional home-made beverage a bold and contemporary makeover. Making diversification a key to reinvention, these entrepreneurs introduced a series of new and unique varieties which redefined them and made them more than ‘new-age chaiwallas.’

Now with the passage of time we can see appealing and quaint tea-cafes coming up in the Indian markets. Moreover the startup concept has also given a boost to the tea café culture in the country with their new and innovative ideas.  These cafes cater to young Indians by offering them an upgraded version of the ‘chai tappris’, where they can sit back, relax and enjoy the ambience which was totally amiss in the age old tea stalls. The success of these cafes lead to the entrepreneurs taking the next leap with franchising the concept to make it more popular, not only in India but globally as well.

Franchising: the Best way Forward

Initially while launching chai cafes, no one imagined how big a success it would be. But as it turned out, Indians, both youth as well as elders just loved the concept of having their favourite beverage in a comfortable and beautiful ambience, which has made these cafes to expand more and more via franchising. As shared by Bhrigu Dutt, Director, Chai Garam, “India has a large young population who are hard working and ambitious. We see a lot of growth across the country especially in tier II and III cities. Chai Garam Cafe model is designed to be a platform for entrepreneurship.”  

Five reasons to invest in a Chai biz:

1. Budget Café with High Returns: As a chai franchise the budget is low but profit is very high because the love for tea in a comfortable ambience is never going to end.
   2. Low cost-Low Risk: It is a low cost opportunity wherein risks are also less. In India we can get a cup of tea in a tea stall for as low as Rs 10 but cannot experience the comfort and class of a café by just spending a few extra bucks.
2. Large consumer base:As mentioned everyone loves tea. Nobody would mind having a piping hot cup of tea in a café with good snacks on the table. This is what a chai café offers.  Moreover in India 90 percent of the household consumes tea so tea business will grow day by day.
   4.  Franchisor to help all the way:  Taking a chai franchise business will be profitable as the brand will support the franchisee in all ways possible.  Brands like ‘The Tea Factory’ go as far as getting the staff and chef for its franchisees.
   5. Goodwill of a reputed brand: Taking a franchise of a popular and successful brand will always be better as the chances are very high to earn a handsome income.

Modern ‘Chaiwallas’ taking the Franchise Way 

There are a few entrepreneurs who recognized the potential in the chai café biz as early as in 2008. According to Bhrigu Dutt, “We were notably ahead of our time. We started our journey way back in 2008 when there was no organized chai brand in India. As the first chai brand in the market, we significantly contributed in popularising the tea cafe industry. Today we are ecstatic to be running more than 200 outlets across 60+ cities in India and abroad.” Chai Point is another such example which started in 2010 by a Harvard ex-student and is flourishing till date. The Tea Factory launched in 2013 in Indore also took up the franchise route for expansion after seeing initial success. As shared by Shashank Sharma, Founder, The Tea Factory, “I launched my first outlet in Indore and seeing its success many people wanted to open its branches. This led to franchising and now we have opened more than 200 cafes in 16 states in India and expanded internationally as well.”  

Another brand, Tea House is remarkably known for its wide range of tea brands of India with best quality in every granule. The brand started its first outlet in Andhra Pradesh in 2018 and since then, Tea House has opened 200 plus outlets in Andhra Pradesh and Telangana via franchising.

Talking about chai franchising, Chaayos cannot be forgotten. The brand which launched in 2012 has been one of the most successful brands that serves 1200 different types of tea brewing.   Chai Sutta Bar, which came into existence in 2016 is increasing in size at a rapid rate with more than 50 franchises. Adding to this bandwagon is Tea Post which established itself as a private company in 2015 but had started expanding via franchising as early as in 2013. The company includes three brands, Apni Chai Ki Dukaan, A Place to Talk and The Desi Café, which cater to the common man and his love for enjoying a good cup of tea in the middle of his hectic day.

Chai cafés taking over coffee brands

Till the early 2000s, Indian market was flooded with coffee cafés with Coffee Café Day taking the lead. Other coffee brands like Barista, Gloria Jean's Coffee, Coffee Day Xpress, Costa Coffee, Coffee Bean Tea Leaf etc also flourished a lot in the last two-three decades.

Despite India being a country of tea lovers, it was surprising that there was not an organised tea café business in our country. The tea industry, being the first love of Indians still lagged behind with local ‘tappriwalas’ at every nook and corner of busy streets, being the only means of having chai outside homes. However, realizing the gap in the market, now the chai cafes are holding the steering wheel in the hands and are accelerating all the way.

Regarding the delayed success of the tea café biz, Bhrigu Dutt shares, “Global players have played a key role in popularising coffee and attaching a novelty to it for actively getting essentially a tea drinking country addicted to coffee.  The charm of hot cup of tea could not be easily diluted. It is in our DNA and with increased focus on healthy alternatives, unique flavours and concoctions the trend is only looking up ward for Chai!” On the same Shashank Sharma says, “I got the idea of opening The Tea Factory while sitting in a tea-stall opposite Café Coffee Day. I saw girls who wanted to have tea but due to lack of comfort level could not relish a cup of tea at a local tappriwala. They flooded CCD’s and other café outlets. This made me realize the need for a chai café.”  Sharing his views on this, Nagendra Prasad, Owner, Tea House said, “Basically in India, tea is available everywhere, on road side and at homes. So the novelty factor was not there. More so, South is coffee drinking region. However, we guessed the potential in a tea cafe as it would be an outlet with clean and hygiene process with reasonable prices.”  

Cup of ‘Chai’ with aspiring franchisees

The success of the tea cafés can be easily gauged seeing the exponential expansion of the franchise brands. While going out to any mall. Shopping street we come across a number of tea cafes where one can rest and sip a relishing beverage. However, there is a lot of hidden potential which can be found by new aspirants in the biz. On the selection of franchisees, Dutt says, “Any motivated individual or group with a passion for work and a strong sense of self can open and run a Chai Garam outlet. With an initial investment of Rs 7 lakh (going upto 25 lakh) and area between 100 to 1500 sq ft. any individual can begin his entrepreneurial journey.”  Shashank  said, “The Tea Factory is a business for the middle class Indian. Any individual can partner with the brand with an investment of Rs 7 lakh, which includes the franchisee fee, settling-up cost, start-up cost, everything but should have the zeal for business. ” Regarding aspirants Raminder Singh Rekhi, CEO, Tea Post said, “The company includes three brands, Apni Chai Ki Dukaan, A Place to Talk and The Desi Café, which cater to people from all walks of life. So the investment also varies according to the setup, ranging from Rs 15 lakh to Rs 40 lakh depending upon the brand.” On the same Nagendra Prasad shares, “We need passionate people to grow for doing business. The investment needed for our franchise is Rs 5 lakh with a minimum area of 150 sq.ft.”

Chai Biz in Five years

Looking at the expansion rate of chai cafes, it can be easily predicted that the future would be as bright as the present times. About the brands five year plans, Bhrigu Dutt says, “We hope to train, advice, guide & counsel to raise over 500+ independent financially secure serial entrepreneurs running two or more Chai Garam outlets. Additionally the brand will maintain the exponential growth of 15 outlets per month and be a 1000+ outlets brand in five years. Chai Garam will penetrate in every city, town pan India and would be a household name.”

Nagendra Prasad of Tea House predicts, “Currently we have more than 200 outlets and in next five years planning to establish 2500 outlets across India.” In words of Rekhi of Tea Post, “Our top priority is to set up more than 1000 profitable franchise stores in the next five years. We aim to excel our services along with generating more employment opportunities.”

No wonder tea in India has come of age. With millennial tea-lovers aiming to have a tea experience matching and even being better than the one coffee cafes have given over the years, new-age startups are ensuring that they do not miss the business opportunity.   

 FACTS

• The country consumes a whopping 837 thousand (837000) tonnes of tea every year! Be it anyone, from a common laborer to the Prime Minister, everyone loves tea.
• More than 70 per cent of India’s tea is consumed within the nation only, making the nation one of the top five tea consumers

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