A startup takes a shot at $40 billion tea industry with an innovative hack

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For connoisseurs used to the special flavors of Chinese or Darjeeling teas, dipping a packet of dusty tea into hot water just doesn’t cut it. At the same time, it’s not always convenient to steep tea leaves in the office or while traveling.

But now, Teabox, a disruptor of the US$40 billion global tea market with its online direct-to-consumer distribution channel and supply chain innovations, claims to have found the answer to that dilemma. Today it launched TeaPacs.

These are tea bags for dipping with a difference. They contain premium leaf teas sourced from Darjeeling and Nepal – many of the same ones that Teabox sources and markets on its portal. A natural nitrogen flush keeps the leaf teas fresh in these TeaPacs, according to a statement from Teabox.

Nitrogen flushing is a preservation method commonly used for coffee, nuts, and chips. It forces the oxygen out of the packet, fills it with nitrogen, and seals it tight. The same process now comes to fresh leaf teas. The leaf tea bags, which have a pyramid shape to allow the leaves to unfurl and release their flavor, are sealed with nitrogen in the TeaPacs.

“Coming from a tea family and spending much of my childhood in tea estates, I grew up drinking some of the world’s best teas – so I know how fresh tea is meant to taste,” says Kaushal Dugar, founder and CEO of Teabox.

Its investors include Accel Partners, Indian tycoon Ratan Tata, Texas oil baron Robert Bass, and Singapore angel investor Cameron Jones.

Kaushal’s family has been in the tea business for over 80 years. He started Teabox four years ago when he saw that the traditional warehousing and distribution of tea were inefficient and ill-suited for preserving the freshness of tea that connoisseurs crave. Its investors include Accel Partners and Indian tycoon Ratan Tata. Texas oil baron Robert Bass and Singapore angel investor Cameron Jones, who love their tea, are among its backers.

Teabox introduced vacuum packing and cold storages to source teas from hundreds of growers in India and Nepal and deliver them to 95 countries across the world. Now it hopes to take that to a new level with the TeaPacs innovation.

The introduction of leaf tea bags may also give a boost to Teabox’s distribution within the country, where a large section of people cannot afford the price of a regular box of premium leaf tea.

Sales of shampoo show that small is beautiful in India. The introduction of single-use sachets, which are cheaper to pack and distribute, turned the industry on its head. Indians today use more sachet-sized shampoos than the regular-sized ones, according to Nielsen. The sachet packaging formula has subsequently been extended to other consumer products from creams to sauces.

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