P10M allotted for 2-year expansion

TEA SHOP BUSINESS

A Cebuana entrepreneur and her partners plan to invest P10 million in the tea shop business in the next two years as they bank on the growing sophistication of the local market’s drinking habits.

Aileen Arellano, president of Ceylanka Trading, Inc., the operator of Island Tea Company, said that when milk tea started to trend in the Philippines, she got the hint that Filipinos were ready to try something other than coffee.

“I thought that since we already had the palate for tea, maybe I should just bring ‘real’ tea here,” Arellano told Cebu Daily News on the sideline of the company’s first pop-up store at Robinsons Cybergate Cebu last Wednesday.

Arellano, who left for Sri Lanka to work and live there some time in 2008, had adopted the nation’s culture and its people’s appreciation for tea, which is abundant there.

Ceylon tea

Ceylon tea, which is only produced in Sri Lanka, is famous all over the world for its taste, quality and texture.

She said she decided to venture into the tea business to introduce this kind of drink to Cebuanos and the rest of the Philippines.

Island Tea Co.’s products are exclusively blended and produced by its partner company Abacus Tea Limited in Sri Lanka, considered the largest tea packer in the country and engages in export of high-quality tea to England, North America and New Zealand.

Ishan de Lanerolle of the Sri Lanka-based Abacus Tea, for his part, said they plan to start in Cebu City with plans to eventually expand nationwide.

Their local partner is primed to spend more than P10 million for 15 to 20 pop-up and possibly in-line stores in the next one to two years.

He said they are set to open their second store in SM City Cebu by December and Robinsons Galleria Cebu by January 2018.

“The tea that we bring here is the highest quality that you can find in the world, similar to the level of TWG and Twinings, except the price points are affordable. However, the prices do not define the product quality,” he said.

TWG, produced in Singapore, and Twinings, produced in the United Kingdom, are considered luxury tea brands.

De Lanerolle said that in the Philippines, tea is considered a luxury in general, but they are here to prove that it can be the common man’s drink as well.

Island Tea Co.’s products are sold from P70 to P185, signifying the company’s aggressiveness to break into the local market.

“We’re giving it at an affordable price so everyone can experience it, not just the rich and elite,” he said.

He clarified that this will not hurt their bottom line since they also handle the production themselves, bringing raw materials directly to the Philippines and getting rid of the middleman.

While coffee farms are abundant in the Philippines, tea farms are not, he said.

More plans

The company, he added, is also considering setting up within the next two years manufacturing and distribution operations here with hotels, restaurants and super markets as their potential clients.

De Lanerolle said this would need a different investment, but he did not elaborate how much.

As early as now, he said they have already received a couple of inquiries regarding franchising but they would want to focus on owning their stores for a while before opening the business up to others.

He said the company wants Filipinos to enjoy the benefits of Ceylon as well as provide employment for locals.

Globally, tea continues its steady increase in production, growing twice in the last 20 years from 2.5 billion kilos in 1995 to 5.3 billion kilos in 2015, a report from the International Tea Committee showed.

Tea statistics

Based on current statistics, the world consumes approximately 4.5 billion cups of tea a day. China is considered the largest consumer of tea with 1.6 billion pounds a year.

Tea was also found to be consumed in the US so much to the point that it has taken over a large share of the country’s coffee market already.

Among the benefits of tea are antioxidants, less caffeine than coffee, it may help reduce the risk of heart attack and stroke, may help with weight loss, protects the bones, keeps smile bright, may boost the immune system, may help battle cancer, may soothe the digestive system, and is calorie-free when unadulterated.