Americans going ga-ga over Indian tea

KOLKATA: Americans have become enthusiastic about high-value Indian tea and shops selling single-estate teas and Assam blends have come up along the East Coast.


Demand for premium Indian tea is going up by 6-7%, bringing cheer to tea producers like McLeod Russel, Goodricke Group and Rossell Tea. Talking to ET, Azam Monem, director of McLeod Russel India, said, "The US market is expanding for Indian tea as more Americans are looking at tea as an alternative to coffee, the main hot beverage in the country. We have been supplying good volumes of Assam orthodox teas to the US. In fact, Starbucks and Teavana are aggressively pushing high-value teas in the US market. The US buyer is ready to pay good prices for Indian tea."

Tea sales at restaurants, grocery stores and shops reached $15.7 billion in 2012, up nearly 32% from 2007, according to consumer goods research firm Packaged Facts. In the next two years, the market is expected to expand to $18 billion. "Hotels and caterers are procuring Indian tea. And Americans have started preferring hot tea to the cold version ," said Monem.

India is now sending 7- 8 million kg of tea to the US market. Media reports say the tea-drinking demography is widening in the US and that aging baby-boomers and Redbullswigging youngsters are expected to buy more tea. Asians, a key revenue source for long, form the fastestgrowing racial group in the country. A rising interest in ethnic cuisines is drawing foodies to premium Darjeeling and Assam offerings.

Tea drinking is growing in the US at a faster rate than coffee, according to IBISWorld. In the last decade, the amount of tea consumed by the average American grew 22.5% and will rise an additional 3% in the next five years. Coffee slumped 1.9% between 2003 and 2013 and will grow less than 1% through 2018.

"The US is a huge market for us and we are trying to increase our exposure in this market. Indians, Britons and Irish who are living there want Indian tea. There is also enthusiasm among Americans, who generally wake up to a cup of coffee," said AN Singh, managing director of Goodricke group and chairman of Indian Tea Association. "They are paying a good price for Darjeeling teas. While good Darjeeling teas are fetching $20 per kg, the premium high-quality tea at times are fetching $60 -$70 per kg in US markets. Starbucks is pushing Darjeeling tea as well. Some tea boutiques in the US are also buying Darjeeling tea," said SS Bagaria, chairman, Darjeeling Tea Association.

The growing interest among US buyers has prompted the industry to take a delegation to the US by the end of this month to explore business opportunities.