— I am a native of Kolkata, — says Ashis Ranjan Das, — my family has been in tea business for over a hundred years. But, initially, I didn’t have any plans to carry on the dynasty. I left to study in the Soviet Union. At the People’s Friendship University, I specialized in “Optimal Control of Nuclear Reactor”. The USSR was building atomic power stations in India at the time. But I never worked as a nuclear physicist. When a post-graduate student, I married a Russian woman. We had a son. As per my contract with GOI, I worked at the Education Department of the Indian Embassy in Moscow. Then, I taught maths in an Indian school. It was then that my family asked me to work with them.
— What was the Russian tea market like in those days? And when did you realise that working in it was profitable?
— In the Soviet Union there were a lot of shortages. One of them being decent tea. In special “festive” deliveries, along with some dried smoked sausage, they would pack a small tea caddy with an “Indian elephant” on the label. This elephant was the trademark of the Moscow Tea Factory. In truth, about 25% of it was Indian tea, and the rest of it was grown in Georgia, Azerbaijan or Krasnodar Krai.
The Soviet Union was then buying a kilogramme plus of tea per person per year: around 260 million kilogrammes. Most of it was from India, where there were five large suppliers involved. And everyone knew what tea to dispatch, where and when. A small amount of it also came from Ceylon. The system was rigorously efficient. The cost of the tea was very low.
I planned to help my family for time being but to continue with my core research thereafter. But then in the USSR came perestroika. I had a family here to feed. And the system for supplying Indian tea ended up being destroyed…
To meet the tea-drinking needs of an enormous country with occasional purchases was not possible. I remember in 1991–1992, we were delivering a thousand tonnes of tea to a factory in Ryazan every month. I was spending 20 days a month at different factories: in Ryazan, Almaty, Irkutsk…
Then, for the first time, I brought into Russia some very good Indian tea in iron caddies. In Moscow, at the time, there was a foreign currency shop on the Arbat. In there, they asked us to supply some niche’quality tea. We supplied them two containers of packed caddy tea. The purchase price was a dollar per caddy. But we sold it for 2.5 dollars. In the shop, though, they were selling it for $5. We delivered the tea on the 23rd of December, and on the next day went to buy three or four tins of it for some acquaintances. But it turned out that they had all already gone. It was then that I realised that in Russia, the moment had come when it was not only possible, but also extremely profitable, to offer high quality goods to the market. And that the demand would only increase.
— What are, in your opinion, the particular characteristics of the Russian tea market?
— It has quite a few. One of them, for example, the lifespan of any new kind /taste of tea (food product) in Russia is very short! Every three to six months here, you have to offer something new. It’s the same, by the way, with vodka, and mayonnaise, and other products. In India, people on the whole stay faithful to a particular kind of tea their whole lives. And it is very difficult for something new to come through. Similarly, in China, too, offering something new is, on the whole, virtually impossible. Even when they visit a different country, they only want to eat Chinese food and to drink their favourite tea.
Russians though, no doubt down to the old days of shortages, are now, largely, of the mind-set to acquire from a shop whatever there is available. In Russia, business today is still, despite the massive upheavals of recent times, built less on demand than on a shortage of any alternatives.
— What Russian predilections do you take into account when supplying tea?
— There are some surprising ones. People here are used to drinking compote (a dry fruit beverages). Sounds irrelevant? Yet, it is precisely by playing well on this Russian predilection that Pickwick offers a wide range of fruit teas, as well as herbal teas. The company’s profitability in Russia went through the roof at 1000% (!), at a time when its peak profitability in Europe was, at best, no more than 20%. And it is all because in Russia people had an already developed taste and drank tea which reminded them of the compote they were used to.
But the most interesting thing is that the largest producer of teas with such things added to them is… Germany. They don’t drink it themselves but send most of it to the Russian market.
— If we are to compare black and green tea, which enjoys the greater demand in Russia?
— Men of 35 and older prefer strong black tea. In the large towns, green tea does really well too. Because the opinion that it has health benefits has firmly taken root. Russian have given Pu-Erh a try, the preparation of which involves either the natural (7–8 years) or artificial (30–100 days) maturing of the raw ingredients. As well as Tie Guanyin, Anxi, which is a yellow tea, and Darjeeling, which they call “the champagne of teas”. That is a black tea with a refined muscatel, lightly tannic taste, and floral aroma, which grows in the Himalayas at an altitude of 750-2000 metres above sea level, in a cold, moist climate.
This tea goes well in Special teabags (see “Bioimport” *@TM ). The qualities of its taste and its properties are the same as with the loose variety. It loses only 15% of infusion due to its filtration.
It is possible to offer better quality teas in Russia now. The reason for this is simple: people know very well what bad tea is. And now Russians, Muscovites, are ready and able to pay for quality.
In contrast with China or India, workers in whatever field cost a great deal. So, dealing with the lower end of the tea market here is not as profitable as it is with the higher end. If a tea costs 2 dollars, don’t try to sell it on for three here. $2.20, maximum, because the difference for the customer is but a small one. But tea costing 10 dollars: people here will buy for eleven/twelve. This isn’t a problem for the consumer bearing in mind the quality in question.
— Where do your tea supplies come from?
— China, India, Vietnam, Indonesia; some comes from Kenya, Sri Lanka, Nepal... But most of it comes from China.
— Who are your clients now in Moscow?
— 90% of them are shops, including online stores. A small quantity of our tea is taken by packers. We sell tea all over Russia. We have now split the business into two parts: my family continues to work with the lower end of the market, and we deal with the top end.
— How hard was it finding offices and warehouses to rent?
— Renting offices and warehouse space these days in Russia is not a problem. Where the difficulties arise is with staff, especially of the middle rank. You can still find a good accountant, but a sales manager, that’s a big problem. For example, there are ten people working at our company. But there is a constant turnover of staff for this position. I was thinking maybe it is only me in this situation. I spoke with some other businessmen, and it is the same story with them.
My friends at the employment agencies tell me that the first question almost every jobseeker asks is “What will my salary be?” It is not important to them what they can offer the company: the main thing is what they stand to receive.
They tell me “It’s all to do with the mentality here”. In business, if we want to run it well, we shouldn’t have to consider either religion or mentality. The person should simply be a hard worker.
— Is it essential to know Russian to do business here?
— Yes. To run a successful business in Russia, it is best to know the Russian language. Russia has many problems specific to itself. Knowing the language just about gives you the chance to understand why they arise.
— What effect has the crisis had on your company?
— Sales have dropped off. The reason being that the average paycheque has gone down. But it is not without its idiosyncrasies here: people in Russia can go and buy an iPhone6 for 85,000 roubles, for which they will then… scrimp on food. After the jump in the dollar, those eggs which used to cost from 27 roubles, are now being sold for 62 roubles. That’s what I can’t understand: have the chickens started eating foreign currency or something? And yet, tea, which comes in from abroad, people want to buy it for the old price; they even want the price to be lower still than that.
— How great is the competition in your business?
— A lot of people have started going to China themselves and bringing back tea from there. And, there is a wave of shady imports. This is easy to explain: people don’t want to pay taxes. So they bring in tea which hasn’t been tested, hasn’t undergone certification. Everyone considers themselves to be a connoisseur. Recently, for example, a certain woman who had worked for me ten years ago rang me up and said, “I am now on familiar terms with tea”. I, of course, said, “How lucky you are! I am from a “tea” family myself, have been in tea for many years, and I am still on formal terms with it.” I mean, this love is a one-sided thing: I still love tea. Whether it loves me, I’ll only be able to say at the end of my life.
— Any parting words for foreigners thinking about doing business in Russia?
— To make it in Russia, you need to be of interest to the market with a new product, new management model, or a new kind of technology. So go on, give it a try!