The Hindu Business Line : Brewing big business

Celebrating the splendour and magic of tea, recently Hindustan Unilever Ltd (HUL) took the initiative to launch Taj Tea Trails. Conducted by tea expert Yangdup Lama, Taj Tea Trails is a journey traversing the rich and unknown history of tea, its prop erties, varieties, brewing and serving secrets.

This exclusive tea tasting and appreciation workshop had the Brooke Bond Taj Mahal brand ambassador Saif Ali Khan tasting the brews along with a group of tea lovers.

Of late, there has been heightened activity in the growing tea segment and players such as HUL have been busy making efforts to upgrade consumers to better taste and experience.

Vikram Grover, Category Head, HUL Beverages, says, “The tea category started growing at 11 per cent in October 2006 and our new initiatives are all geared towards creating excitement in this category.”

HUL introduced its new Taj Mahal Dessert Teas recently, in flavours such as butterscotch, French, vanilla and dulce. Grover says, “The product caters to the indulgent generation who love to indulge in products that are sensorial, offer pleasure and enhance their moods.”

While the market leader HUL has been doing its bit to rouse this once dormant category, regional players too have got active with their brands. Tea companies such as Wagh Bakri and Sapat International have been busy bringing in their respective brand endorsers such as actors Smriti Irani and Sonali Kulkarni. Regional tea brands have decided to become more visible in a buoyant tea industry and are bringing in celebrities to endorse their brands.

A highly penetrated category, of late the market leaders of tea in Gujarat and Maharashtra have decided to spread across India and are poised to take their brands outside their respective States with new celebrities to endorse their brands.

While Wagh Bakri, the dominant tea brand in Gujarat, is entering Maharashtra, Sapat Chaha, the market leader in Maharashtra, is now looking at a pan-India presence.

Wagh Bakri is entering Maharashtra with its premium leaf teas. Targeting a 15 per cent volume share in its first year of launch, Wagh Bakri is adopting a 360-degree marketing strategy to tap into this market.

“We have to be more aggressive in the Mumbai market after being a strong regional player. Mumbai is the largest metro for the tea market and almost 22 per cent of Maharashtra’s volumes come from this city,” states Parag Desai, Director, Gujarat Processors & Packers, the maker of the Wagh Bakri brand.

With the tea category currently growing at 21 per cent, the company has decided to enter new markets.

Strengthening its distribution network, Wagh Bakri also has a presence in Rajasthan (20 per cent share) and Madhya Pradesh (10-15 per cent share). With an annual turnover of Rs 260 crore, the company has a production capacity of six lakh packets per day. With a 60 per cent volume share in Gujarat, Wagh Bakri is now eyeing a pan-India presence. Meanwhile, Sapat International is poised to take its brand Sapat Chaha and its new premium varieties national. According to G. Balasubramanian, Vice-President (Sales & Marketing), Sapat International, “Interest in branded tea has picked up and now there is innovation in this category.”

With the growing shift from loose to branded tea, regional players are now expanding their reach and also getting premium with their offerings.

While regional brands have got active, the second largest tea player, Tata Tea, is trying to create excitement in the out-of-home segment. It recently launched its first outlet Chai Unchai. To connect to youth, Tata Tea has chosen IIM Bangalore to set up its first retail outlet.

According to Sangeeta Talwar, Executive Director, Tata Tea, “Chai Unchai is designed to be cool as it is neither a parlour nor a kiosk and has an ambience that is warm, friendly unpretentious and fun. We are confident we will make a compelling connect with young people.” Tata Tea intends to go national with its new concept and attain market leadership in the out-of-home segment.

Other initiatives taken by Tata Tea in the recent past are the announcement of its Jaago Re campaign and a universal branding exercise for its brands. It has also associated with football club Arsenal to bring football coaching into the country.

Announcing their association, Percy Siganporia, Managing Director, Tata Tea said, “Leadership, the pursuit of excellence, unity of team spirit and character-building value attributes of football and tea come together in a heady mix.”

Industry analysts say the shift to branded tea is primarily led by rising incomes and lifsestyle changes in the urban markets and tea marketers are cashing on this trend to build their brands.

In fact, AdEx India figures also indicate that tea had the largest slice of the food and beverage advertising pie in print during 2007 with Brooke Bond Lipton being the top advertiser in this segment.

Tea is getting hot and so are the brands, with each player trying its best to woo consumers with their new and innovative offerings.

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