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April 2017 Corporate Focus

Published on: 2017-04-20 15:13:37     775 times read    0  Comments

Based on over forty years of experience, Rakura Tea has leapfrogged over the local competition and aims to become an international household name in tea.

Neeraj Rathi, Managing DirectorNeeraj Rathi
Managing Director

Named after the initials of founder Ram Kumar Rathi’s name, Rakura tea recently received the Finest Food Safety and Quality Management certification in the field of food safety and quality from the Department of Food Technology & Quality Control (DFTQC). Hot on the heels of its new success, Himal Tea Industries Pvt Ltd, which owns the brand, launched Rakura Tea 2.0 in the Nepali market adding eight more varieties of tea products in the flavours of citrus fruits, chamomile, peppermint 
and peach. 

“Rakura tea 2.0 is the outcome of a perfect combination of the finest Himalayan tea blends and natural infusions combined with exceptional, eco-friendly food-safe packaging materials,” says Neeraj Rathi, Managing Director of Rakura. He says that every Rakura product is produced through state of the art technology and world class food safety and quality management standards. All 22 varieties of the tea are organically produced in Nepal while the natural flavours used in them are imported from different parts of the world.

The tea brand is popularly known for its range of organic products, which includes Himalayan organic green tea, Himalayan organic earl grey, Himalayan organic light green tea and Himalayan English Breakfast Tea. A packet containing 25 tea bags is priced from Rs 100 to Rs 160.

Rakura Then
With the origins of its parent company dating back to 1973, the brand was established to put Nepal on the world tea map by buying tea from a handful of state-run estates and introducing them to the world. “Rakura’s parent company then after started working with state-owned gardens to improve Himalayan teas in 1982,” recalls Rathi. He adds adding, in 1993 it established Nepal’s first private orthodox tea factory in Ilam.  

In 2012 the company introduced Nepal's first compostable double-chambered tea bags and since then, Rakura has been doing its best to make a mark in Nepal and foreign markets when it was first launched as Rakura Tea 1.0. In 2013, Rakura tea lunched its CTC loose tea. The company in 2014 launched Nepal’s first premium loose tea blends and natural tea infusions. 

“We introduced supreme premium blends of organic Himalayan Orthodox Black, Organic Himalayan Green and Himalayan CTC with whole-leaf loose tea along with Nepal’s first natural health tea infusions of lemon and honey, jasmine with Himalayan Organic Tea.”   Likewise, Himalayan Organic Sencha green tea and Himalayan Chai (masala tea) were also introduced in the same year. 

About Rakura
Rakura is the first privately owned tea company in Nepal. As per Rathi, currently, there are about 200 tea factories both big and small. The company is producing green tea, CTC (crush, tear and curl) tea, orthodox black and also tea with specialised flavour. “We blend the tea of every batch for consistency in taste,” he says, adding, “We take samples from some of the finest tea gardens as well and while blending we hand select the best tea from the batch and finally only after that we place our efforts into your cup of tea.”  Rakura CTC tea and Rakura green tea are popular among Nepali consumers, as per Rathi while Rakura Masala tea which is also known as Himalayan Chai is becoming popular internationally. “Beside that orthodox black tea, green tea are gaining place in the international market.”

According to Rathi, the company’s growth in the last five years has been massive. “In the last three years there was only organic growth with no push into marketing,” he says. “We have gained huge growth in terms of Rakura’s brand and we are looking forward in that in another five years we would like to see us becoming a global brand.”  

Rakura in International Market 
When the company started exporting tea- with the UK being the first country- the outlook for private tea companies was pretty threadbare, with only state owned tea gardens existing at the time. They produced the tea from leased tea gardens but focused on the quality. “Whatever the obstacles in the way, we always tried to break new ground for Nepali tea,” mentions Rathi. “By establishing the first tea factory and for initiating the export of tea, the company has always remained ahead in the tea business.” Rathi informs Rakura tea is available in the Philippines, UK, China, Hong Kong, US. “We are in talks with Australia and planning to enter India this year. We are looking for new countries too.”  

While fondly noting that Rakura tea is especially liked in the Philippines, Rathi remarks that though the company is getting a good response in UK, the company has not been able to hit the main retail supermarkets due to the stringent food safety laws. Already available on Amazon, the company is eyeing the large supermarket chain stores like Sainsbury’s and Wipro.  

Quality and Price   
“We are slightly expensive but we have twice the quality than other products,” claims Rathi. He further says, “We worked hard through all the years to bring the best qualities to our consumers.”

Rathi says the company is also the first to launch Nepal’s first double chambered tea bags where the flavour flows from five directions. Other manufacturers are using single chambered tea bags where the flavour flows from just two sides. 

“The filter paper that we are using for our tea bags is 100 percent natural,” shares Rathi. He further explains the tea bags are folded and stapled by high quality aluminium wire which is imported from Germany where they undergo strict anti-bacterial measures to avoid bacteria, viruses, stains and rust. Similarly, Rakura uses unbleached threads which avoid bleaching when the tea bags are dipped in the cup. “We have put all our research and quality into our Rakura packs.”

Current Market of Rakura
Rathi says, Rakura is the number one tea brand in terms of sales, brand perception and specialty tea. “All the best hotels in Kathmandu such as Hyatt, Annapurna, Yak and Yeti, Radisson, Marriot are using Rakura tea,” points out Rathi. According to him, right now all the international hotel chains coming to Nepal are using Rakura tea. “Also with the launch of each new product of Rakura we jump 50 to 100 percent in terms of brand perception.”

Market Competition
“Basically we are not directly competing with local brands out there but we are trying to compete with the international brands that are in Nepal,” states Rathi, although there is some indirect competition with local brands. 

While competing with international brands may be the ultimate goal, Rathi confides that in the past four years they have taken over the contemporary tea market in terms of sales, brand perception.

Market Strategies, Problems
Rathi believes Nepal is producing some of the best tea in the world but it does not have its own brand identity. “And this is the reason why we came up with Rakura,” he mentions. He also claims that no other company in the world has the same value proposition like Rakura in terms of price and product ratio. 

According to him, the company’s market strategy is to eventually attain brand significance and to gain new market access. He believes that Nepali tea has the potential to create brand significance, which will lead to market significance. 

However, creating brand significance and access to the market are the two major problem areas in the tea business. “Brand significance assists to create value in the domestic market and exports bring back the revenue which helps to develop the country,” explains Rathi. 

CSR
Active at the community level, and believing in sustainable CSR, the company has helped in community health, games and building roads, bridges, old age homes and gave financial support during the April 2015 earthquake. “We made a special pledge that in the earthquake’s aftermath, for a year, two percent of Rakura’s earnings will go into the earthquake relief fund created by us. We are auditing the amount that we collected and we are looking forward to providing the amount to the deserving people.” 

SWOT Analysis

Strength
•    Brand Significance
•    Quality in every step of making tea
•    Value proposition

Weakness/Areas of Improvement
•    Excel in food safety, quality and access to new market

Opportunity
•    Huge potential for Himalayan tea

Threats
•    Consumer’s attraction more towards imported products


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