What do you do if your revenue crashes to almost zero? You reinvent your offering like Chaayos did in the pandemic.
Chaayos was founded in 2012 as a chain of cafes that serves tea-based beverages. Their product journey started in 2015, when customers asked to buy the teas they had enjoyed. In response to this, Chaayos began selling their popular tea mixes in plain, brown paper bags with a sticker label. It was only when the pandemic struck in 2020, did they refresh, redesign and scale their product portfolio.
In two years, Chaayos’s revenue from their packaged products has grown by 2.5x. Of the total revenue, 50% comes from online sales, (own site plus marketplaces), and 50% from their cafes.
Chaayos raised a Series C $45 million round in June 2022.
For this case study, we spoke with Nitin Saluja, co-founder, Chaayos and Ashwini Deshpande, co-founder, Elephant Design, the studio behind the new product packaging.
The Brand & Products: Proudly Desi
Chaayos is positioned as a ‘contemporary desi’ brand – a personality that overlaps with Saluja’s larger-than-life one. “We’ve shown customers that you can come into a cool, well-designed cafe, drink the chai you love and discover others,” he says. “These are the same people who want their adrak-elaichi chai at home and we are now supplying it to them, hassle-free and with authentic ingredients.”
The Chaayos portfolio is structured into four categories:
- Tea-mixes with popular ingredients like ginger, tulsi and cardamom.
- Convenience products like ready-to-make chai, which just needs added water.
- Unique green teas like Hibiscus Mullati or the saffron-based, peppery Kava
- Snacks like cookies and mathi
Access to customers at its cafes allows Chaayos to experiment and iterate quickly. One such insight was that the tea that you drink at a cafe, may not be exactly the same tea you want at home. A punchy adrak-elaichi chai is one of the most popular products on the Chaayos menu. However, conversations with customers showed that when they used the same product at home, they added their regular tea leaves to tone it down for their daily cuppa.
The Design: Not Another Tea Cup
After identifying products as a priority area, the Chaayos team reached out to Elephant Design to redesign the packaging.
Ashwini Deshpande, co-founder, Elephant points out that tea-drinkers have a very personal relationship with their daily cup and will go to great lengths to customise it. Even within a household, people will tweak ingredients to get their perfect blend. “That is the difference between a generic tea and your specific chai,” she says, “and Chaayos had successfully delivered that to customers in their cafes. We now needed to translate that stickiness into the packaging.”
Take a look at a supermarket shelf and it is evident that no visible design innovation has happened in this category for a while. Deshpande says they were clear that they would not create another pack ‘with a tea-cup.’
Instead, the design seeks to project the confident brand personality that Chaayos has embraced.
Devanagari product names
The most striking element on the packs is the product name hand-lettered in a fluid Devanagari typeface. This style is inspired by the hand-written chalk menus seen at small chai-stalls. The large product names also address possible confusion, for example between Chai Masala and Masala Chai.
Bold ingredients
Ingredients are at the heart of the Chaayos difference, and these are featured big and bold on the packs.
Welcoming cues
Drinking tea is a social occasion and a festive toran has been added to the packs to cue a welcome.
Hinglish best hai
Great care has been taken to use words from regular parlance, without forced translations. So Masala Chai co-exists with Green Tea, because that is the way consumers commonly refer to the products.
The Results
Saluja says that after the packaging redesign, product revenue as a percentage of cafe revenue has grown from 3% to 7%. What about wider offline distribution? “All in good time,” he says, “right now, our 200 cafes are doing a pretty good job for us.”
In every crisis lies an opportunity.
Covid led to the packaged product focus pivoting and that is already contributing 13% to the revenue!!
Good to know, and also the design differentiation that they have executed.
I LOVE the Chaayos adrak tulsi chai. Enjoyed reading about their brand and Nitin Saluja
The packaged products probably also jacked up valuation. It is a strategy that everyone from Starbucks onwards is following
Sound approach but why not change logo? Anyway happy to see desi but not downmarket brand
Great case study!
Seems like something that an agency did to sell to the client with the subtle hints and insights. Overall, I don’t think the packaging came out that great, TBH. Nor do I think that Chaayos which is largely thought of as a Cafe Coffee Day for chai will really take on a lot of market share after the initial novelty wears out. What Chaayos could look to do is probably explore their commercial offering and setting up at offices, airports, the works.