Tata Tea Plans New Brands To Up Market Pie

Tata Tea is planning a slew of brand launches as part of its endeavour to garner 27 per cent of the Indian packet tea market in three years.

At present the company's share is at 22 per cent of the packet tea segment which commands nearly 45 per cent of the 650-million kg market.

Addressing shareholders at the company's annual general meeting, Tata Tea chairman Ratan Tata said a three-pronged strategy would be adopted to increase the company's marketshare.

"To increase our presence in the market, we will introduce new products, widen distribution territory and increase promotions," he said.

Replying to a shareholders' query, Ratan Tata said Tata Tea was considering appointment of an independent valuer to assess the valuation of the Tetley brand.

 

Homi Khusrokhan, managing director of Tata Tea, said, "The company is looking at launching international blend in the premium category under the Tetley brand."

The brand would primarily target the urban, city and metro markets. New variants, flavours and herbal tea would also be launched.

Tetley brands would be launched by early next year. According to Khusrokhan, one of the blends would be pitted against Taj Mahal from the Unilever stable. However, there would be other blends as well.

While Kanan Devan, Chakra and Gemini have a major presence in south India, the flagship brand 'Tata Tea' is popular in the northern belt. Tata Tea mainly caters to the popular and economy segment but with the Tetley launch it would have blends for the top-end of the market.

Commenting on the present packet tea market scenario, Krishnakumar said the general perception that packet market shrunk was not true. "Packet tea market has expanded, but the nature of the market has changed."

He explained that the market was no longer dominated by two large players. Regional brands have gained momentum and Tata Tea will adapt to the present market form.

"From large scale mega market the market has atomised," said Krishnakumar. K Pringle, a director of Tata Tea said Tetley would buy one million kg from Tata Tea this year.

Tetley usually outsources around 8 million kg from India, out of its total requirement of 50 million kg.

As part of Tata Tea's growth strategy, the company may also look at garden acquisitions in Kenya and Sri Lanka. However, Homi Khusrokhan clarified that the company was not in talks with any company for the purpose at the moment.

Tata Tea already has a majority stake in Watawalla Plantations in Sri Lanka through a joint venture. Watawalla Plantations has around 20 estates.

Khusrokhan said, "We will leverage this in enriching our blends. Indian blends would also be marketed in Sri Lanka" he said.