A tourist makeover for Darjeeling tea industry to beat a growing crisis

The region's storied estates are upping the luxe quotient by foraying into hotels and resorts

The Jungpana was once special for connoisseurs of Darjeeling tea — a fabled rival of Castleton, the crown jewel from the Goodricke stable, it fetched record prices and was a favourite with the Queen’s grocer, Fortnum & Mason.

It had a history going back to 1899 when British planter Henry Montgomery Lennox planted the first saplings. He was succeeded by G W O’Brien and after World War II, it was sold to the Rana family of Nepal.

In 1956, the Kejriwal family took over and held it till 2018. The ownership stints have gotten shorter since. In the last four years, Jungpana has changed hands three times — Anshuman Kanoria, who made the last transfer, had it for about six months.

The quick-paced change is not a surprise though — it’s symbolic of a deeper malaise in the Darjeeling tea industry.

High cost of production, low productivity, labour absenteeism and an influx of cheap teas from Nepal have led the “champagne of tea” to lose favour with producers and buyers alike. Officials across the industry say that since last year, seven to eight gardens have changed ownership and it’s the established planters who are selling out.

The Mayfair Hotels group is in early stages of discussion for a tie-up with the latest owner of Jungpana for a tea tourism project, a Mayfair official said.

The problems for Darjeeling tea date back to the Gorkhaland agitation in 2017 that shut down the industry for 104 days between June and September. About half the production was lost then. And Nepal teas — a weak cousin with similar properties — made permanent inroads.

“The closure of Darjeeling gardens in 2017 opened the floodgates for Nepal to capture domestic and international markets,” said Atul Asthana, managing director and chief executive officer, Goodricke Group.

Darjeeling was among the first Indian products to get the Geographical Indication (GI) tag in early 2000 though its efficacy is now under question.

Post-2017, a sequence of events hit Darjeeling tea that made it difficult for it to reclaim its place in the sun. The bushes took time to recover in 2018; the national lockdown to contain the Covid-19 pandemic hit in 2020 and wiped out the first flush and 2021 was marked by a scanty rainfall.

There are about 87 gardens in Darjeeling that produce 6.87 million kg of tea but climate change is casting its shadow. What makes Darjeeling unique is a delicate balance of sunshine, rainfall, elevation and the mist that grazes the Himalayas. A tilt in the balance of any of these elements can spell trouble.
 

“Intermittent rainfall and bright sunshine from the beginning of the year helped in a good harvest of first flush but part of second flush in May was hit due to less rainfall and pest attack,” said S Sannigrahi, senior principal scientist, Tea Research Association (TRA).

This apart, domestic buying has dwindled, the euro is weak with the war in Ukraine, and the Europeans are reluctant to pay a higher price. About half of Darjeeling teas are exported.

“Demand for Darjeeling tea is at its worst in two decades. The Russians are not buying because of the war, Germans are buying more Nepal tea and the Japanese are buying very high-end teas,” said Sparsh Agarwal, co-founder of Dorje Teas and owner of Selim Hill Tea Garden.

In the last four auction sales, the average price for Darjeeling leaf was 36-38 per cent lower over 2021. But costs have increased. “Input cost, which comprises 40 per cent of total cost, has gone up more than 30 per cent on a year-on-year basis. And labour wages, which are 60 per cent of costs, will also go up,” said Kanoria, who owns two other gardens, Goomtee and Tindharia, in Darjeeling.

“The average sale price of Darjeeling teas is below cost of production; how will the Darjeeling tea industry survive?” asked Asthana.

To beat the ups and downs of a commodity cycle, many planters are looking to boost brand Darjeeling in their backyard by combining tea and tourism, the principal revenue earners for the region.

“There is tremendous opportunity for high-end tourism in Darjeeling — spas, golf resorts and even schools. Since the government has allowed use of a certain percentage of tea grant land, we are looking at the prospects and helping members put together proposals,” said Indian Tea Association (ITA) chairperson Nayantara Palchoudhuri.

In 2019, the West Bengal government allowed tea gardens to use 15 per cent of total grant area up to a maximum of 150 acres for tea tourism and allied business activities. Of this, 40 per cent can be used for construction.

In 2020, Taj checked into Darjeeling with Chia Kutir set in the famous Makaibari tea estate. The project in partnership with the Ambuja Neotia Group — lease holder of the part of the estate that houses Chia Kutir — has been buzzing since.

“The presence of a Taj branded hotel in Darjeeling has created a new circuit and is driving more tourist footfalls in Darjeeling as well as Kurseong. There are many more guests coming from Mumbai and New Delhi, in addition to Kolkata and Siliguri,” said an Indian Hotels Company (IHCL) spokesperson.

IHCL has three other properties under management contract in Darjeeling. The Makaibari Bungalow and the recently opened Puttabong Cottage are operational. 

And it has signed one in Kurseong recently.

“Makaibari is an iconic brand with a list of firsts — it houses the world’s first tea factory, was the first to go organic and is among the most premium Darjeeling teas. With Chia Kutir, more people are visiting the garden and getting to know it personally,” said Rudra Chatterjee, managing director Luxmi Tea, owner of Makaibari and the Bungalow. Puttabong Cottage, part of Puttabong Tea Estate, is owned by Jay Shree Tea & Industries, controlled by Jayashree Mohta, elder daughter of late B K Birla. If the model is successful — and so far, the response is overwhelming — then Jay Shree Tea might consider it for other gardens.

Goomtee used to do tea tourism on a limited scale. Now, the bungalow is being relaunched and repackaged as an upscale tourism project. Depending on the success, it will be expanded. “Till such time we can address worker productivity issues and increase our market, tea tourism seems to be the only option to cut losses,” said Kanoria.

Industry sources say that other hotel chains are also on the lookout for properties. That’s a cause of discomfort for some blue-blooded planters of Darjeeling who are apprehensive that it’s slowly becoming a real estate play.

Tea tourism is not new to Darjeeling. Many owners converted the sprawling colonial bungalows nestled in the picture-postcard greens mostly into homestays. But a vista of opportunity may open up for planters reeling under cost pressure as high-end tourists flock to Darjeeling much like they do for vineyards and curated winery tours.