If you’re looking into starting a tea processing company, check out our comprehensive tea processing company plan guide.
In a financial and opportunity-rich industry, the production, and processing of teas can be a profitable venture for any entrepreneur. But before starting a new enterprise, one should consider where he/she wants to set up his/her operation. You must choose a suitable location for your factory.
Otherwise, you may find yourself running into problems later on. For example, if you plan to open a manufacturing facility in an urban area, then you’ll face issues related to traffic congestion, pollution, noise, and so forth. On top of these, you’ll also need to ensure that your chosen site meets certain legal requirements.
A tea processing company usually buys raw materials from farmers, then produces various kinds of teas. There are six main types of teas produced by these companies: green, yellow, white, oolong, black, and post-fermentated.
Is Tea Processing Business Profitable?
Global consumption of coffee is expected to grow by 2.5 percent annually through 2020, reaching almost 1 billion cups per year. Coffee is one of the world’s favorite beverages, consumed by millions around the globe.
According to Euromonitor International, the global coffee industry was worth $143 billion in 2017, with an estimated growth rate of 3.7 percent between 2016 and 2021. However, the global coffee demand is expected to decline by 0.4 percent every year until 2023.
Geographically, the North American continent was the largest consumer of tea in 2013. And analysts predict that the trend will continue during the next five years. Nevertheless, some of the major consumers are Canada, Mexico, the United States, and Japan.
These countries among others will see an increase in the consumption of tea during the next five years due to increasing disposable income and rising health consciousness. Thus, the global tea business offers lucrative opportunities to start a new venture.
Health Benefits of Tea
Here are some health benefits of drinking tea.
- It is one of the most important ingredients for treating various diseases. It improves bone health, reduces the risk of heart disease, controls hypertension, and prevents diabetes.
- It helps prevent heart disease and other health conditions.
- Drinking green tea may help prevent the development of esophagus and gastric cancers.
- Furthermore, drinking black tea helps to boost the immune system, which is needed to combat any flu.
Here are the 7 Steps to Start a Tea Processing Business
1. Identify The Factory Location
The location plays the largest role in the success of an agricultural company. If you already have an agricultural farm, then obviously you can start a manufacturing facility.
But if you do not have your own farm, then check the demands for a manufacturing facility in that particular location. Based on the capacity of the farm, you should make sure of the regular supply of the crops in the factory.
2. Create a Business Plan
Creating a successful beverage company requires planning. First, you must determine how much money you can invest into the project.
Next, decide if you should start out selling wholesale or retail. Finally, consider where you will sell your product. You may also wish to contact local businesses that might be interested in buying your products.
Apart from distribution, what kind of marketing strategy do you intend to employ? What are your plans for promoting the product? Do you have any experience in promoting similar products before? Are you aware of any competitors who might be doing something similar?
Also include executive summaries, objectives, missions, visions, key strategies for achieving them, and a detailed description of your company’s current situation.
3. Company Ownership & Tax Liabilities
Depending on the type of industry you’re operating in, you need to decide which legal structure to use for your company. But it largely depends on the location where your company is located. You should always consult with an attorney before registering your company.
You need to get the proper permits and licenses for operating an agro-based enterprise. Moreover, be sure to check the annual taxes and compliance obligations.
4. Startup Cost & Investment
There are two main types of costs involved when running a tea business. These include fixed costs and working costs.
Basically, the total expenditure comprises the following two components: (i) the direct expenditure which consists of the costs of raw materials, labor, transport, etc., and (ii) the indirect expenditure which consists of the interest payments, taxes, insurance premiums, etc.
5. Plant & Machinery For Tea Processing Unit
To produce high-quality teas, you need to first purchase the necessary equipment. Depending on the quantity of production, some of the most important tools include:
- SS Rotorvane 8″
- CTC Machine (CTCMachine), 3Pair 8” Roller (CTCRoller), 8-
- DF Furnace
- Drier (Conventional)
- Humidifier
- Mydellton Sorter
- Fibre Extractor.
- Vibro Sorter
6. Learn the Tea Production Process
Here are some things to keep in mind when making tea.
a) Withering
In order to make good quality black teas, it is essential to take care of the process of drying. For this reason, we recommend using a special type of equipment called an electric dehydrator.
The electric dehydrators used today are very efficient and easy to operate. They also allow us to control the temperature inside the machine. We recommend that you buy a dehydrator with a minimum capacity of 10kg per day.
b) Rolling
A circular table with a conical base and slatted surfaces is called a batten table. At the top of the table, there is a circular box. The table and the box rotate eccentrically, and the leaves placed inside the box are twisted and rolled over the conical base and the batten tables.
c) Fermentation
During the brewing process, oxidation begins. Oxidation continues until the end of the boiling process. In order to prevent an attack of bacteria, the brewing room should be kept very clean. To achieve this, the teas are placed into large containers (trays) and left overnight. After this period of time, the water is poured off and replaced with fresh water.
d) Drying
You may dry your herbs on a conventional diesel. Blow hot air up to 90 °C against the leaves. By the end of the process, the temperature should reach 80 °C.
At this stage, the leaves should be dried out enough so that they lose about 95 % of their weight. Once the leaves have lost their weight, they will start turning brownish-black. Moisture content should be reduced to 2.5%. This ensures that the essential oils remain intact and do not evaporate during storage.
7. Tea Processing Unit Marketing Strategy & Promotion
First of all, decide what your goal is. Is it to get people interested in buying your product? Or do you just want to inform them about your product? You’ll also need to consider how much money you’re willing to spend on advertising.
Then, create an advertisement that accomplishes both of these goals. For example, if you wanted to advertise your new tea, you could write a review of the tea in a magazine or newspaper. People who read your article would learn about your tea, and they may buy it because they liked reading your article.
It may be necessary to establish a well-established distribution network. Big eCommerce companies and supermarket chains are good choices for domestic sales. International markets are another option for expansion.
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