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food & hospitality world  |  OCTOBER 29, 2015  |  By: Sudiptha Dev

CUTTING-EDGE CUP OF CHEER

Established in 2012, Teabox is an Indian startup that is charting a different strategy in the traditional Indian tea marketplace. The company, that today exports the finest Indian teas to more than 80 countries across...

Established in 2012, Teabox is an Indian startup that is charting a different strategy in the traditional Indian tea marketplace. The company, that today exports the finest Indian teas to more than 80 countries across the world is leveraging on technology to reach a global audience and enable quick delivery. Kaushal Dugar, founder and CEO, Teabox is proud of the fact that his organisation is run more as a technology company than a tea company. Dugar comes from a family that has been in the tea business for more than seven decades. “Having grown up in Siliguri with weekends spent in Darjeeling amongst the lush green plantations, I realised over a period of time is that this is one industry that has not changed much in the last 100 to 200 years. In fact it is a legacy of the British Raj and things were being done the same way. I realised that what has not changed was its location in Bengal and far from innovation and tech hubs of Gurgaon, Chennai, Pune and Bengaluru. It was aloof from the rest of India, also people who are decision makers in the industry are 60 plus,” says Dugar.

Pointing out that even in today’s age, between production to consumption, the time taken is between three to six months, which should not happen, he asserts that it should reach the end consumer in the shortest period of time. Dugar explains that there are five to seven intermediaries between the producer and the consumer (for example auctioneer, importer, retailer, etc). By the time the consumer receives his tea, no matter where he is in this world, most of its freshness has also gone as tea is a perishable product. “I realised there could be a big business opportunity if I could deliver teas fresh within days of production to consumers from around the world. That was the genesis of Teabox,” adds Dugar. He started with Darjeeling teas as Darjeeling is one of the most well known Indian teas and people across the world are familiar with it. Earlier the site used to be called Darjeeling Tea Express and within few months it got a lot of traction from English speaking countries such as the US, Canada, Australia and the UK. “Consumers who were connoisseurs and have been drinking tea for 20-30 years gave us the feedback that they were unaware that Darjeeling tea could be so good. That’s when we realised the potential in the market and not just for Darjeeling tea but also Assam, Nilgiri, Nepal and Kangra teas,” he says. Teabox became the first tea company in India to raise professional venture capital – a million dollar seed round from Accel Partners (one of the world’s leading VC firms). “We want to emerge as India’s leading global tea brand,” states Dugar, adding that, the value chain of the industry is such that they are very happy selling it to the next person and the supply chain. “Our focus is to deliver the world’s freshest tea and leverage the internet to reach out to consumers in more than 80 countries and in the process create India’s first global brand. Over the last two and a half years we have shipped more than 30 million cups of tea to customers across the world,” he mentions. Following the funding, Teabox opened another office in Bengaluru from where marketing, technology, customer service operate. The company grew about ten times last year and raised about Rs 40 crore from a global group of investors including a customer who is not just a hardcore tea connoisseur but also the founder of one of the world’s largest private equity company. Subscription engine Teabox recently launched a subscription system for tea enthusiasts and novices to solve the problem of tea discovery. “The kind of teas we deal with, only a few people are able to differentiate. Most people do not know what is a first flush, or what is a Muscatel,” reminds Dugar. Being a technology company, he and his team came up with a solution to solve the problem. “We started researching and realised that wine which is in certain ways a similar industry, people have used technology. We have created the world’s first personalised tea subscription engine. While people might not know anything about tea they will certainly know about their taste and palate. We ask four-five questions which gives us an idea about of the customer’s taste and palate. We ask what kind of chocolates they like (bitter, milk), smells (flowers, fruits, wet earth), all these questions help us build a personal palate profile of every customer. On the tea side every single tea is analysed on 75 attributes. Once a customer gives his answers, our algorithm comes up with the answer that matches his palate almost 75 per cent.” The machine learning technology breaks down subjective words like ‘floral’, ‘sweet’ and ‘astringent’ into over 75 quantifiable attributes. The whole solution is technology driven – it is a machine learning algorithm. It is an inhouse software developed by a team of product managers, engineers and designers. The teas are sent in a beautiful curated box to the customer. “Once you taste the teas you give us the feedback. The feedback again goes to the engine which now has a better idea of your palate profile. By the time the third and fourth subscription delivery is made, the tea selection is fine tuned as per the machine learning algorithm,” informs Dugar. The data of thousands of consumers who are giving feedback on a monthly basis is also compared. Over a period of time Teabox can give a tea to subscribers which is close to their taste than any other tea company in the world. “We recently tried for a patent as well,” adds Dugar. Teabox is looking at converting novices into connoisseurs of tea. Being an industry where the consumption is primarly outside India, the company is looking at aggressively reaching new markets. Currently apart from the US, Russia is one of the biggest markets. The company has just gone into China, and going forward will enter Korea and Japan. Dugar informs that when Teabox enters new markets it creates an entirely localised website. People of Russian and Chinese nationalities work in its office in Bengaluru. “We have partnered with fulfilment centres in Russia so that using technology we can move the products faster and deliver quickly. For the next few years we want to increase focus in those countries as well as increase subscription to cater to a larger segment of tea enthusiasts and novices,” remarks Dugar. Teabox exports 95 per cent of the production, and five per cent consumed in India. The company is constantly investing in infrastructure. A few months ago the company opened the first cold storage for tea in Siliguri. According to Dugar there are four main enemies of tea – oxygen, light, moisture and temperature. And if all these four elements are not arrested within 24 to 48 hours of production, the quality of tea and freshness deteriorates. At Teabox, tea is got directly from plantations within 24 to 48 hours. Quality control and cleaning is done and then the tea is stored in cold storage in vacuum packs at -5 degrees. “Even if the tea is consumed after two years it is as good as produced yesterday. We are only able to do that because of our presence at source and our investment in technology and infrastructure,” he says. Teabox is also looking at the hospitality space in the near future, in particular high-end luxury hotels in India and overseas. New innovative packages and accessories, corporate gifting are the other new initiatives. Next January, Dugar is also looking at opening kiosks in select locations in India and overseas. .

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