Green Tea is the new Black

Drinking green tea is a fashion statement for the health conscious, but supply in India is still limited.

Rajive Kaul, Nicco group chairman ,attributes his habit of drinking green tea to the Korean influence, being the Honorary Consul General of South Korea. Till a few years ago, he and a growing band of converts to green tea would have had to import their tipple or buy it at the odd tea boutique or Tea Board outlet. Today, they can buy more of it — albeit in limited quantities — from India (it was, in fact, first produced in Darjeeling 20 years ago).

India currently produces 10 million kg of green tea, less than one per cent of the country’s total tea production. Still, the perception is less gloomy than the statistics. Sanjay Bansal of Ambootia said, “It’s become fashionable to drink green tea.” Bansal would know, since the Ambootia grows around 37 varieties of tea besides black tea.

Fashion comes at a cost. A packet of green tea is 25 to 30 per cent higher than black tea. For the producer, margins are higher by the same level since it doesn’t cost more to produce green tea.

The story of black tea establishes that there is no extra money involved in the cost of production. Green tea originated in China, which is the largest producer, and it turned black on fermentation while travelling through the Silk Route. When the British came to India they started exporting black tea back home to maintain quality standards because it has a much higher shelf life.

So the hotbed for green tea is still the south-east Asian countries while the developed world is a black tea-consuming population. Morocco is the only other country besides south-east Asian that happens to be a green tea drinker.

But the developed world is also taking fancy to the more healthy green tea primarily because of the wellness factor. Green tea contains polyphenols, which are said to improve health, especially cardiovascular disease and cancer. Some studies apparently have also indicated that it has a slimming effect.

Rajive Kaul likes it because it has the best variety of catechins (contained in the polyphenols). “It also cuts out the milk and sugar, which are calorie-oriented.” His favourite is the Darjeeling green tea, which has a distinctive aroma.

It’s a niche product, but tea companies across the spectrum have jumped on to the bandwagon. Apart from the Ambootia group, Chamong, Goodricke, Jayshree Tea, Assam Company are some of the growers, while packet tea majors include Tata Tea and Duncans.

In contrast to India green tea is big market internationally. The tea companies believe that in a globalised world, it would catch on in India, as well. Kiran Desai, who heads blending and buying at Tata Tea, said, the green tea market was not big at the moment, but the signals are positive. “With the youth becoming more and more health conscious it is sure to catch on.”

Small volumes make prices higher, which in turn positions the green tea as a lifestyle product. Bansal added, “A pot of black tea at a five-star hotel will cost around Rs 150 while green tea will be Rs 350.” At the bulk level, if organic bulk tea costs Rs 400 a kg, green tea would be Rs 550-600 a kg.

It’s a chicken-and-egg situation, as Desai pointed out, “Availability is not an issue, it’s the size of the market.”

The youth account for about half of India’s population, making it a big market for the green tea testing ground.

Whiter shade of pale

Green tea is niche but not half as exotic as white tea. The size of the market may be minuscule, but margins and prices are 100 per cent higher than black tea. White tea could cost Rs 500-600 for a pot at select hotels while at the bulk level it would be Rs 800-1,000 a kg. But the solace is, unlike green tea, the price disparity for white tea is an international phenomenon.

White tea contains the bud and young tea leaves that are completely unoxidised. The catechin content in white tea is also higher than green tea.

Business Standard