The Hindu Business Line : Duncans Tea offers Aaag; re-launches Double Diamond

New Delhi, Sept. 17 The cup that cheers isn’t brimming with good news these days. Tea prices, which have gone up 40-45 per cent a kilo at auctions, are forcing tea makers to pass on the costs to consumers.

Competition has already increased prices so has Kolkata-based Duncans Tea. It has now launched Aaag a tea for the lower segment of its consumers priced at Rs 37 for 250 gm packet.

“As the prices move up, the consumer is likely to look to downgrading, or going from packed to loose tea. We are offering Aaag as a lower-end segment tea to our consumers,” said Mr M.C. Appaiah, COO, Duncans Tea Ltd.

Its existing premium leaf tea and flagship brand Double Diamond (sold at Rs 58 for 250 gm pack) is also being re-launched.

Duncans has also expanded its portfolio with DD Gold, a super premium tea, and DD green tea bags, an organic high grown orthodox tea.

Consumers are more likely to sacrifice a cola over their tea in the face of rising costs. But rising prices, if they continue, will be a concern for the category that is growing at 8 per cent per annum. Duncans, for example, has already increased its prices by Rs 30 a kg.

The company in its efforts to increase rural reach is in talks with the India Postal Department, says Mr Krishnendu Ghosh, Head, Marketing, Duncans Tea Ltd.

“There is nothing that beats the postal network’s rural penetration. We are still in talks but hope to start in Maharashtra. So you could soon hear a ‘daakiya chai laya!’ call,” he adds.

Rural urban ratio in Duncans’ turnover is roughly at 50-50.

The company has also tied up with the Indian Railways Catering and Tourism Corporation, for the wide visibility that such an association offers to its brands. It has also finalised tie-ups with Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.

Double Diamond in its new avatar will also be marketed through a television commercial visible on a few leading news channels.

The company which claims a 4 per cent share of packaged tea saw a 20 per cent growth in volume last year. Rising prices have not affected consumption — “not as yet”, says Mr Appaiah.

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Duncans Tea offers Aaag; re-launches Double Diamond