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Hot tea, cool place!

Coffee bars and friends are great, but how about a chai bar for a cool hangout place? Tata Tea is launching its Chai Unchai out-of-home tea chain now, reports Saurabh Turakhia.

business Updated: Jan 31, 2008 23:13 IST
Saurabh Turakhia

The youth focus on the part of Indian marketers is indeed generating some interesting ideas. After the likes of Café Coffee Day, Barista and Costa Coffee have tasted a decent response to their coffee bars, it’s now the turn of Tata Tea to talk tea bars. Just check out the name – Chai Unchai – for the planned tea bars and there’s no doubt the target is India’s burgeoning youth population.

Never mind that Tata Tea's close competitor, Hindustan Unilever Ltd, tried something similar when it started T Place, but soon shelved it. And never mind that, as Santosh Desai, CEO and MD of Future Brands, points out, escalating real estate costs could be a dampener to such a project. However, he does observe that "it is clear that by and large, out-of-home consumption is going to increase. This is especially true of the young people." He adds that while the culture of a hangout place has been well-defined by coffee chains, Tata Tea's attempt seems to push tea as a 'cool', preferred beverage, breaking its limitedness to the older generation.

Sangeeta Talwar, executive director marketing, Tata Tea, is upbeat on the idea. She says, "Chai Unchai is a uniquely crafted space in the out-of-home segment that connects with youth in an exciting and differentiated manner. Tata Tea is using Chai Unchai as a transformational idea to create points of connectivity and convergence with the teeming young population of India. The outlet design has an unpretentious and fun feel to it – that of a cool hangout place for young people."

She adds that the vision for the business is to be a leader in the out-of-home space in the next four to five years in terms of presence – leading with tea. The number of stores to be opened will depend on this. "The F&B market is estimated to be growing at 20 per cent. The Chai Unchai business, being totally new, will obviously follow a very aggressive growth strategy. The outlets would be opened in malls, shopping complexes, corporate parks and educational institutions."

The stated aim is to be a market leader in the out-of-home tea space. In this endeavour, Talwar does not rule out the possibility of tie-ups with strategic partners. The intention is to make a big effort in the tea segment in terms of scale and reach, enough to make that desired impact.

While success is not automatically guaranteed, it is a fact that the out-of-home space is seeing a lot of attention currently. While Barista, as Desai points out, did run into some problems on the financial front, Café Coffee Day, which has close to 500 coffee bars, has remained aggressive.

Devahuti Kataki, Manager – PR & Communications, Café Coffee Day says, “Currently CCD owns and operates 525 cafes across 90 cities in the country. In India the market potential for cafes is in the region of 2500 cafes and there is space for everyone as long as one is focused on the target segment and caters to the customers preferences with constant innovation.”

Besides, Tata Coffee has also launched its own version of coffee bars called Mr. Bean Coffee Junction.

With this new initiative from Tata Tea, the concept of the tea bar, introduced as the Cha Bars by Oxford at its bookstores, gets extended as the primary youth activity out of home.

Some time back, CCD also introduced ‘Lychee Iced Tea’ as a special offering.

Desai says that in the long term, the out-of-home consumption trend cannot be escaped and the challenge would be to arrive at a viable and affordable price point. Considering Tata Tea's aggression ever since it has overtaken HUL in volume share, big plans seem to be brewing in its boardrooms.