Indians wake up to red and purple teas

Industry sees potential in domestic market and exports for South African Rooibos and Kenyan purple tea

After green and black teas, India is waking up to a morning cup of South African Rooibos and Kenya's purple tea.

These niche teas have a potential to grow not only in the Indian market but also offer an opportunity for exporters.

Azam Monem, vice-chairman of the Indian Tea Association and director of McLeod Russel, said, "India could do what Germany has done; it imports the herb, adds infusions, and exports worldwide."

He added these niche teas could eventually give some competition to premium Darjeeling teas.

"In the last five years, green tea has become a Rs 250-300 crore market, and last year it grew by 50 per cent," said Sumit Shah, executive director of Madhu Jayanti International. He added if growth followed this trajectory, green tea could capture 10-12 per cent of the packaged tea market in the country.

The market for green tea had tripled in three years to about 15 million kg, Monem said. The share is still marginal against India's 1.2 billion kg tea production last year.

Rooibos is an extract of a red bush that grows only in South Africa. It is caffeine-free and rich in a rare antioxidant, aspalathin.

According to the South African Rooibos Council, 12,000 tonnes of Rooibos are produced in a year, of which South Africans consume 4,500-5,000 tonnes. The increasing demand for Rooibos has pushed exports up to 6,000 tonnes per annum in more than 30 countries. Germany, the Netherlands, Japan, the UK and the US are the biggest importers of Rooibos.

Shah said his company was importing 25-30 tonnes of Rooibos for the last eight years and most of it was exported after value addition. "Rooibos is not very palatable, and hence we add flavours like orange and vanilla and then export it. Around 5-7 tonnes are sold in locally. A year ago, it was just 1-1.5 tonnes," he said.

According to traders, small and mid-sized exporters import 110-150 tonnes of Rooibos every year. There was no official data on these varieties yet, Monem admitted. As the market for the variant grows, several packaged tea players have their products ready. Hindustan Unilever and Tata Global Beverages sell the variant in the UK under their Lipton and Tetley brands. Hindustan Unilever said it had no plans of launching the product in India.

The UK is a big market for Rooibos, it saw a 300 per cent increase in sales between 2003 and 2007, according to the department of agriculture, forestry and fisheries of South Africa.

The variant is priced at Rs 700-800 per kg here, and can be pitted against Darjeeling tea in the urban market. Darjeeling tea is priced at Rs 700-2,000 a kg depending on variety.

The anthocyanin-rich purple tea, or ox-blood, is grown in Kenya and its sweet and woody flavour suits Indian tastes better, according to tea traders. "Apart from its anti-cancer benefits, it improves vision, and cholesterol and blood sugar metabolism," Shah said, adding his firm was working on building a category around it.

This tea, however, is priced much higher than Rooibos at Rs 3,500-4,000 a kg. "Add import duty to this, and the landed cost is around Rs 5,000-6,000 a kg for Kenyan purple tea. We are testing the market and import just about a tonne at the moment," Shah said.

Chetan K Patel, senior member of the Federation of All India Tea Traders' Association, said, "It is difficult for international teas to penetrate the Indian market. The import duty is almost 100 per cent. Yes, there is a huge opportunity for exporters to ship the value-added variants and capture the global market for herbal teas and infusions." He added there was little scope for exporting tea from India because domestic consumption was high. Of the 1.2 billion kg production last year, only around 200 million kg was exported.