Gujarat to taste cup of TE-A-ME this summer

Kolkata-based firm planning to enter Gujarat market with exotic tea blends

Kolkata-based tea exporting firm Madhu Jayanti International Ltd (MJIL), that has one of the largest tea bag manufacturing capacities in India, is now planning to set foot on the Gujarat market with their offering of exotic tea blends and tea bags this summer.

The local market here is widely held by Gujarat Tea Processors and Packers Ltd, which sells Wagh Bakri tea and has around 80 per cent share of the Gujarat tea market.

Sumit Shah, executive director, MJIL feels that while consumers seldom change their brand loyalty for packaged tea, its an entirely new ball game when it comes to tea bags. "The consumers of tea bags are an entirely different segment and all tea manufacturers are trying to tap this segment as they would drive the future consumption of tea," he said adding that it aims to capture at least a 10 per cent market share in the tea bag segment in Gujarat over the next one year.

The company is basically aiming to tap the urban youth with its offering of exotic tea blends, with fruit and herbal flavours.

"We plan to enter Gujarat by June 2015 with our range of exotic teas. Some of the teas we have in mind are Cranberry Apple, Cinnamon Apple, Pear White Tea, Mango & Pineapple Black Tea, Blueberry Muffin White Tea, Mixed Fruits & Cream (Black tea) and Vanilla Green tea," he said adding that the products would be made from natural ingredients, and not artificial flavours.

As on date, MJIL can as of process 60,00,000 tea bags per day, with 75 per cent production being exported. Its packet tea capacity is at about 7000 tonnes per year. The company, incorporated in 1950, is one of the top exporters of value added tea from India, and caters to 42 countries across the globe.

In India, however, its presence is mainly in South and West (Maharashtra). It sells two regional brands, Lalpan in Karnataka and Saraswati in Maharashtra, besides a private labeling business for clients like Cafe Coffee Day and Costa Coffee. MJIL operates its business under two models; company-owned brands (contributing Rs 200 crore) and private labeling (contributing Rs 150 crore) with offerings in packaged tea and tea bags.

It launched the TE-A-ME brand with 17 different varieties targeted at urban, health conscious youth last year. The company currently sources tea from tea-gardens across the globe including India, Kenya, Malawi, Uganda, Sri Lanka, Turkey, South Africa, Zimbabwe, Mozambique, Vietnam, Papua New Guinea offering black, green, red and white teas, flavored teas, and herbal teas and fruit and flower infusions. The Rs 350 crore company is growing at 25 per cent CAGR.

Growing at 30-35 per cent, the tea-bag market in India is expected to grow into Rs 1,000 crore category in the next five to seven years. To test market in India, MJIL launched a pilot brand called Jay Tea, which garnered 11 per cent market share in the green tea category in 2011. Encouraged by this success, the company launched the TE-A-ME brand.