For the sake of forming a good impression on the sharks, the founders of Blue tea exaggerated the truth a little bit and that did not go down well with the sharks.
The lack of truth, honesty, and transparency in their pitch led to the loss of trust of the sharks in their business. Even though their numbers were enticing and lucrative, they still lost investment opportunities from Anupam Mittal, Amit Jain, and Vineeta Singh.
Toward the end of the pitch, they did try to salvage their reputation by giving some honest answers and managed to capture the interest of Aman Gupta.
Blue tea is a herbal tea brand that specializes in flower-based tea. Their vision is to make it as world’s number 1 herbal tea brand.
Blue Tea Review
Some of the benefits of Blue Tea are:
- Unlike Green tea, It is not bitter.
- Is high in Antioxidants and supports weight loss.
- It has a soothing effect on the mind.
- It doe not contain caffeine and can be drunk throughout the day.
Currently, they have 50 flavors in India and 35 flavors in the U.S. In blue tea, they have 10 different flavors.
One interesting fact about blue tea is that when you will squeeze lemon in blue tea, it will turn pink.
This tea can be drunk hot or chilled, whatever you prefer.
Blue Tea Founders
Nitish Singh (MBA in rural management) and Sunil Chandra (MBA in marketing) are the founders of Blue Tea. 6 years back they had seen pink color iced tea advertised in a newspaper.
This captured their attention and they began their research on it. They found out that in Malaysia &Thighland it is a local beverage and is served as iced tea or cooler.
Initially, when they started out they were planning to import. They later realized that if they want to build a big brand, they will need to set up a supply chain. The import system won’t work.
They grow their own flowers and herbs. They have built an efficient supply chain, and are available in all the Indian states and 12 countries. With their endeavor they have managed to boost the average income of an Indian farmer by 5X. 90% of their farmers are women, which inspires women empowerment in the rural sector.
Blue Tea Shark Tank
At the start of the pitch, the founders had claimed that they are the 1st to sell Blue Tea. Anupam objected to this saying that he has drunk Blue tea in the past in the U.S. so it is not a novel product. He further accused them of being gimmicky.
When Amit asked what is the price of normal, Green, and Blue tea the founders replied:
- Green Tea- 200 rupees for 100 grams
- Normal tea- 100 rupees for 100 grams
- Blue tea- 800 rupees for 100 grams
The founders explained that 2 grams of green tea make 1 cup whereas blue tea needs only 0.5 grams to make one cup. Amit then asked that each bag is of 1.65 grams and people not going to reuse it again. Vineeta also questioned why they did not make 0.5 grams of tea bags instead.
This did not go down well with the judges and they accused them of lying. Anupam clearly told that “Hum yaha tamasha karne nai baithe he” he explained that they want to help and they need honest answers.
Aman Gupta also told them that they are smart and should not try to be over-smart.
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Sales of Blue Tea
Monthly sales- rupees 1.5 crores
(2019-2020)- Rupees 50 lakhs
(2020-2021)- Rupees 2 crores
(2021-2022)- rupees 10 crore
Estimate sales for (2022-2023)- rupees 30 crores
Deal Or No Deal?
Original ask 75 lakhs rupees for 1 percent equity at rupees 74 crore valuation.
Amit, Anupam, and Vineeta backed out because the founders were not transparent about their business.
Namita also did not invest because she likes her tea traditional with milk and the idea of Blue tea did not appeal to her.
Aman liked the team, he said that they are like him and his co-founder. He gave the offer of rupees 15 lakhs for 5% and debt of rupees 60 lakhs for 12% at a rupees 3 crores valuation.
The founders gave the counter offer of rupees lakh for 2% rest debt.
Aman gave a final offer of rupees 50 lakhs for 3 percent equity and the rest as debt.
The founders accepted it and secured the deal.
Concluding Remarks
While their strategy to impress the judges through exaggeration backfired, one cannot deny that they have built a very good E-commerce business. Let us check out some of the strategies that make them successful.
- Needs of consumers
80 percent of their sales come from foreign countries and the U.S. accounts for 60 percent. The reason behind this is that they have collected data on what kind of tea U.S. citizens are searching for and based on that they launch that particular flavor of the tea.
- Marketing
They spend around rupees 30 lacks in marketing every month.
- Niche Product
There are different brands of blue teas available in marketplaces, but those are just sellers. They have established themselves as a Blue tea brand.
- Efficient supply chain
They had initially thought to import the tea and sell it but then realized that if they want to make profits, then they will have to build their own supply chain.
Whether Blue tea will be widely accepted by the Indian masses or normal and green tea will continue to dominate this segment only time can tell. We would however like to know whether you would be willing to give Blue tea a try.
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