Tata Tea plans to take cuppa of home
AFTER a slew of acquisitions in tea and non-tea spaces, Tata Tea is now weighing the pros and cons of entering the out-of-home format for its tea business in India. The company, the second largest branded tea manufacturer, is also planning to enter the mass market with a new brand.
For international markets, too, the company has lined up major marketing initiatives to increase its share of the global business. The company has some of the leading global brands within its fold — Tetley, Good Earth, Eight o’clock, Jemca, Vitax and Flosana.
“In India, we are not present in the out-of-home format and vending segments. Right now, we are evaluating these two sectors. If we find there is some business sense, we may explore these avenues,” Tata Tea managing director Percy Siganporia told ET. Tata Coffee has made a small entry in the out-of-home format and has set up a few retail stores in south India.
Mr Siganporia described Tata Coffee’s entry into retail format as an ‘experimentation’ and added: “The board of Tata Coffee will take a decision on this in due course.”
In India, tea consumption is growing at a compounded annual growth rate of 3.3 %. Elsewhere in the world, black tea consumption is either stagnating or declining and the demand for alternative green, specialty, fruits and herbs and other infusion teas is showing a rapid growth. “We are also evaluating the possibility of introducing liquid tea in the domestic market. We are expecting the dynamics of tea marketing to change in India depending upon the transformation of consumer preference over time,” Mr Siganporia said.
In the mass-market segment, the company is present with its lone brand Agni. “We are evaluating an entry into this segment,” he indicated.
In the global market, Tata Tea is planning to come out with new variants of tea-based products, specialty teas, green tea, white tea and herbal teas. Tetley has emerged as the No. 1 player in the UK with 30% market share. “The ready-to-drink {RTD) category is gradually finding its way in the UK. We have already launched RTD in this market,” Mr Siganporia said.
In the US, Good Earth Corporation, a specialty tea company acquired by Tata Tea in 2005, is showing signs of growth. “Nearly 60% of our top line growth comes from our global business,” he said.
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