Startup Sunday || Season 3 Episode 37 ||Brewhouse

Be it hot or be it cold, tea is the most consumed drink in the world after water. And it is not a secret that we Indians have an affinity towards tea. Being the second largest producer of tea in the world, Indians consume 80 percent of its domestic consumption and hence stands fourth in the list of the largest tea exporters in the world. India has exported tea worth $463.95 million between April to October 2018. While the majority of tea consumers in India like it hot and milky, there is a segment who like their tea cold. Owing to healthier choices people are slowly moving towards RTD (Ready To Drink) categories of drinks, and moving away from carbonated and sugary drinks. This Startup Sunday we feature Brewhouse, a Delhi based startup which is looking to capture such a segment and serve them quality iced tea options instead of consuming aerated sugary drinks.

Inception

Brewhouse was founded by Sidhharth Jain, a graduate of Indian Institute of Management, Calcutta. He himself is an ardent tea lover, and while working as an Investment Banker in Singapore he happened to have visited a famous high end tea store in Singapore. The offerings at the tea store made him think as to how the Indian iced tea segment had immense potential to take off. Sidhharth then realized that the Indian iced tea market is dominated by Nestea and Lipton which are more artificial in nature with powders and concentrates. That was when he wanted to change the game and offer the country’s iced tea segment with a drink that is brewed from fresh tea leaves. Added to this when he wanted to get it manufactured, he found out that the industrial units seemed to make the tea after intense processing which was something that he didn’t want. He wanted to make a more refined product which was healthier and not over processed.

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This was when he set up a small manufacturing unit after getting a funding from angel investor, Dheeraj Jain. But to make a world class product he needed more funds and the necessary knowledge capital. This was when he was backed up by Singapore based FMCG group Food Empire Holdings which invested $2.96 million in Sidhharth’s company.

Brewhouse- A healthy drink for a new India

Brewhouse believes to offer a new health conscious India, a drink which is devoid of preservatives and contains 6-6.5% sugar instead of bottled drinks which contain around 45-50% sugar. At the same time they did not believe in adding preservatives to their drinks and keep it as organic as possible. It makes the tea from brewing organic tea leaves and not from a powdered and concentrated form. Also they use a natural heating and cooling and vacuum process which keeps the product fresh upto nine months. According to Jain,“We aim to serve people who admire the real taste of iced tea.”

In a bid to be environment-friendly, Brewhouse reuses its glass bottles, after a standard cleaning process. But all these factors make the costing of the product high. Jain adds, “With a team of more than 80 people, our own manufacturing and operation unit, we maintain a standard gross marginal income. We keep the marketing budgets low.” With a product line of four popular brews of flavoured iced teas, namely, classic peach, classic lemon, honey mint and citrus green, Brewhouse has sold over 1.2 million bottles so far across more than 15 cities in India.

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Marketing Strategy

As we have mentioned earlier, Brewhouse believes in keeping its maketing initiatives within budget. The company focuses on efficiency in operations and supply chain management. Brewhouse started distribution with hotels, restaurants and catering, institutional chains like cinema multiplexes, hospitals and with multiple retail distributor chains in major cities such as Delhi, Mumbai and Bengaluru and through popular ecommerce chains across India. Brewhouse is now reaching the boundaries beyond tier 1 cities and a lot of outlets in smaller cities such as Jaipur and Chandigarh. “People can also find us in a lot of small-town airports like Raipur, Trichy, Srinagar and Lucknow,” quotes Sidhharth.

What does the future hold?

According to reports, the food and beverage market in India, which was estimated to be $30.12 billion in the year 2015 is expected to reach $142 billion by 2020, with a compounded annual growth rate (CAGR) of 36.34%. This makes the future of the product bright. The Indian economy at this time looks robust and with the changing demographics, increase in disposable income and rate of urbanization all across, the potential for this segment looks promising.

With the gig economy racing forward in the country, startups like Brewhouse are trying to encash this opportunity. Currently, Brewhouse’s iced tea is considered as a premium product. But, moving forward, Jain plans to come up with an alternative packaging and more organic methods to cut down costs, reduce prices with an aim to make Brewhouse a mass product. It is widely known that tea is a popular refreshing drink preferred by people all over the world, irrespective of the place, season or weather. Brewhouse believes that it can give the new India a mode of refreshment, tea but in cold form.

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