Tea industry likely to touch Rs 33,000 cr turnover by 2015

The total turnover of the tea industry in India is likely to touch Rs 33,000 crore by 2015 from the current level of about Rs 19,500 crore, as per a study titled ‘Indian Tea Industry’, released by industry body ASSOCHAM.

With nearly six lakh hectares area under tea cultivation, the domestic tea industry is growing at a compound annual growth rate (CAGR) of about 15 per cent, stated the study.

“India is world’s largest consumer, second largest producer and fourth largest exporter of tea after China and accounts for nearly 30 per cent of global output and nearly 25 per cent of tea produced worldwide is consumed in India ,” said DS Rawat, secretary general of ASSOCHAM while releasing the findings of the study.

“Branded market accounts for nearly 55 per cent of the total market and is growing at about 20 per cent while the unbranded market is growing at 10 per cent annually,” said Mr Rawat.

Nearly 35 lakh workers are employed in over 1,500 tea estates across India and about 65 per cent of these are employed indirectly.

According to an ASSOCHAM estimate, the tea production during the current year is likely to stay over 950 million kg as against 966.4 million kg in 2010.

“Awareness about health benefits associated with moderate intake of tea is another significant factor behind this upsurge in its demand as now more and more people are familiar with healing properties of tea,” said Mr Rawat.

Historically regarded as a hot beverage, the penetration of tea in the non-alcoholic cold beverage segment is another driving force for this industry owing to the rising affinity towards ice-tea which currently accounts for over five per cent of entire non-alcoholic beverage market in India, found the study.

“There is not much product differentiation at rural and urban levels and thus key industry players are coming out with value added products but with rapidly changing market scenario and technological advancement in agri-business, there is tremendous scope and potential for growth and development of domestic tea industry,” the study found.

The Indian tea industry is presently facing tough competition from China, Sri Lanka, United Kingdom, Kenya and Japan.

Hindustan Unilever is the current market leader in terms of sales value with over 20 per cent market share; while Tata Tea is the leader in terms of sales volume with nearly 20 per cent market share.