Regional tea brands ride variants bandwagon

As the national tea brands such as Brooke Bond and Tata Tea brew interesting product variations from iced teas to flavoured teas, regional brands do not want to miss out on the action.

This is significant because 34 players, most of them strong regional brands, account for 80 per cent of the Rs 4,000 crore branded tea market in India.

To add to that, analysts point out that the category is getting crowded as the number of tea brands in the country have gone up from 254 to 354 in one year.

Parivar, a tea brand from the Mumbai-based Sapat Group, has recently launched flavoured teas under the sub-brand Chai Time in Mumbai, while another strong regional tea brand Girnar is now diversifying into other beverage categories.

Girnar, already has a full fledged range of gourmet teas in flavours such as apple and cherry. The company is now looking at introducing instant soup, milk shake, juice and coffee mixes. Harendra Shah, director, Girnar Tea, said that the company would be broadening its product portfolio while at the same time tap other markets such as Madhya Pradesh and Uttar Pradesh.

In the case of Parivar Chai Time, the brand is not selling flavoured tea in tea bags as is the norm. Instead, the flavoured tea is sold in packets.

Nikhil Joshi, managing director, Sapat, said that research showed that consumers preferred using tea leaves to tea bags, which is why they introduced this range in flavours such as ginger, elaichi and so on.

However, this is not the Parivar group's first venture into flavoured teas.

"We found that rather than exotic flavours, consumers in tier two cities preferred more familiar flavours such as rose and chocolate.

"We also found that unlike the urban consumers who use these flavoured teas as impulse products, rural consumers used them as their primary tea," said Joshi.

Sunil Alagh of SKA Advisors added, "Regional brands have the advantage of being closer to consumers. This provides an opportunity to be entrepreneurial, evaluate ideas rapidly and bring new products to the market, faster, cheaper and with a better connect with consumers."

Industry experts point out that this is one category where brand loyalty is extremely high which is why consumers are more likely to try out the variants introduced by their preferred brand. Hence a regional brand's chances of succeeding with its variants in its primary market is high.

Still others such as Society tea are said to be waiting to gauge consumer reaction to the variants before entering newer categories. Other avenue that the smaller brands are tapping is international markets.

NRI consumers who are looking for a familiar brand in the international market, are a significant opportunity that companies such as Wagh Bakri and Sapat have started tapping in the US, UK and the Middle East.

With price points being higher, international markets are fast becoming a viable option for brands wanting to expand but being unable to do so within the country.