Short read: Leaf to life

Rudra Chatterjee is Chairman of Obeetee and Managing Director of Luxmi Tea (which owns the famous Makaibari tea brand). He begins by informing us of the origins of tea’s popularity around 1000 years ago:

“Tea’s popularity was not inevitable. It gained scale around 1000 CE during the Song dynasty when productivity improvements in rice cultivation freed land and labour. Tea emerged as a State-sanctioned alternative crop.

Over the next thousand years, this Himalayan herb did more than refresh drinkers. It shaped history. By the eighteenth century, tea had become the core business of the East India Company. Revenues from the China tea trade underwrote the Company’s expansion and financed the consolidation of British power in India. The venture became more lucrative when Bengal and Bihar, already under Company administration, were redirected toward opium cultivation, with exports to China used to settle the trade for tea…

Tea is the most affordable delivery system of caffeine, the world’s most widely consumed psychoactive substance. Over centuries, people have sought a gentle way to stay alert, focused and socially connected through long hours of activity. Tea became global because its effects were mild and repeatable.”

Mr Chatterjee then informs us that after a successfully millennium of gaining customers around the world, tea now faces an existential crisis:

“Today, tea is grown in more than 50 countries and consumed in more than 150, yet the business model is broken. Prices have stagnated, costs have risen, climate volatility is eroding yields, and much of the industry survives by producing more of what the world already has in surplus.”

So what is to be done? How can tea’s fortunes be turned around? Mr Chatterjee believes that the solution can be found in Rwanda and this solution can be imported to India:

“…To endure, estates must evolve beyond asset-intensive, single-crop production toward structures that support broader participation and resilience.

Rwanda offers a useful illustration. There, smallholder farmers are contracted to successful tea factories, securing strong auction prices. Farmers commit leaf under transparent revenue-sharing arrangements that link returns to performance, while factories benefit from assured scale and quality. Applied broadly, this estate-collective model allows high-performing estates to anchor surrounding growers, widening value without diluting standards. From there, estates can function as multi-use landscapes rather than monocrop factories.

Many tea regions sit within ecosystems of exceptional value where high-altitude forests and river valleys have endured because tea cultivation resisted deforestation and soil erosion over long periods. Through social and commercial forestry, estates can stabilise soils, regulate water flows, moderate local temperatures and sequester carbon, while FSC-certified timber grown alongside tea restores degraded land and generates steady income. Seen this way, the tea estate becomes climate infrastructure rather than a relic of colonial agriculture. These landscapes already support wildlife at scale, from elephant corridors in Assam and chimpanzee habitats bordering African tea gardens to leopard buffer zones in the Dooars. They can also support ecological tourism, walking trails and outdoor camps that diversify livelihoods without overwhelming fragile environments.”

If you want to read our other published material, please visit https://marcellus.in/blog/

Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.