Tea Giants Plan Small Packs, Local Brands

Smaller pack sizes and niche products in the branded tea segment seems to be the only succour in a market plagued by low prices and increasing local brands and loose tea. The low-end, low margin economy segment seems to have provided some resistance in the declining tea sales.

According to analysts, the small pack sizes and niche products seem to have met with reasonable success in a market that has been witnessing very slow increase in domestic tea consumption.

Moreover, there have been no price increases in the packaged tea category since January 2002 due to resistance from consumers.

According to an analyst with a foreign brokerage house, there has been about 10 per cent decline in terms of both the value and volume in the market till date during the year.

 

Hindustan Lever Ltd (HLL) and Tata Tea, the top players in the branded tea segment, have introduced smaller pack sizes and niche products. The marketing gambit appears to have met with reasonable success, he added.

According to estimates made by analysts, the packet tea market fell about 13.7 per cent on the year over year basis till September 2002.

Volumes in the packet tea market of HLL declined 19.7 per cent, while it lost 120 basis points in September 2002 on a monthly basis over its previous month (August) against the market