India’s largest tea cooperative plans to enhance retail sales

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A sorting centre for tea cooperative federation Indcoserve

India’s largest tea cooperative federation, Indcoserve based out of Coonoor, has set its eyes on enhancing the share of its branded retail sales in the coming years. Commanding a network of 30,000 tea farmers in the Nilgiris hills in Tamil Nadu as well 16 local processing factories, the cooperative presently has an annual production capacity of 17 million kg. Currently, major share of its production is sold through tea board conducted auctions but according to Shrinvasan Sreeram, Advisor of the cooperative, the major focus in the near to medium run would be in augmenting branded retail sales. 

 As per Tea Board rules, it is mandatory for major tea producers to auction 50 percent of their output to ensure that no cartelisation takes place in the market when it comes to price setting.  “Currently, over 60 percent of our produce is sold through these auctions and remaining through retail and exports (exporters mainly buy at auctions). However, we are keen to improve retail and exports share to 50 percent in the next one year and for that we have set afoot fresh initiatives,” Sreeram said.

Late last year, Indcoserve had initiated five tea-cum-food trucks, the mobile outlets in Nilgiris district. “This initiative has received good response and we are keen to introduce it in different cities especially metro locations under the franchise partnership route. The operator will have the leeway to sell food items popular in his region but he will sell only Indcoserve tea,” Sreeram added. 

Srinvasan Sreeram, Advisor, Indcoserve

India’s largest tea cooperative is also toying with the idea of opening dedicated ‘Indco Tea House’—in the typical library-cum- cultural center format—at major cities in the south. The prototypal center was earlier inaugurated in December in Coonoor.“ This again will be expanded with the support from franchise partners route within the state first. These initiatives will help us both in brand building and retail sales augmentation,” he further added. 

Indcoserve is getting ready to introduce 20 more tea-cum-food trucks in other cities in Tamil Nadu as well as neighbouring states in the coming months before scouting for franchise partners in other zones of the country. “Its right time to make decisive moves in brand building as well as retail sales expansion as we have significantly broadened our portfolio by introducing eight new varieties of tea in the last one year. There are a total of 11 varieties which we can offer to tea consumers today,” he explained.  

Meanwhile, the cooperative is expecting to close the fiscal 2020-21 with a steep jump in its revenue.“ We are waiting for the final yearly figure but our revenue could well be in the range of upwards of Rs 240 crore as against Rs 134 crore in the previous fiscal. There are a few reasons for this sterling performance: our output did not go down despite Corona-led disruption, we have benefited from general price escalation in tea prices to the tune of 40 percent and with our quality improving we fetched better prices at auctions,” he pointed out.   

Ritwik Sinha chased trucks in his childhood, without realising logistics would become a deep love for him. Inherently a television man, he now spends long hours interviewing key people for our very popular YouTube channel. Podcasts are next on his list. In his free time, Ritwik is either looking for a warehouse filled with commodities or hitching a ride on a cold truck – all of which yields great stories!

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