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Can Indians be converted from boiled milky teas to tea bags? Of late, a slew of regional players has entered this still-nascent segment, which is dominated by Hindustan Unilever and Tata Global Beverages.
Tea bags account for less than 1 per cent of the tea market. But since the loose tea segment has been stagnant (7 per cent growth), tea bags, with 27 per cent growth, are being seen as the future, says market research firm Nielsen.
Regional players such as Wagh Bakri and Girnar have been unleashing their brands with a host of flavours while enhancing manufacturing capacity.
The growth of tea bags has been primarily driven by the popular green teas. While HUL and Tata Global beverages have been spending lavishly to expand their respective green tea brands, regional players have been benefiting from the efforts of their larger competitors.
Open minds “Consumers are now more willing to experiment with new tea flavours through this convenient format. And it is relatively easy to fight the biggies in this segment,” says Sumit Shah, Executive Director of Madhu Jayanti International, maker of Jay Tea.
The ₹350-crore Kolkata-based company is gearing up to unleash a new brand — Te-a-me — with 17 flavours. “Since the packet tea segment is declining, we are increasing our manufacturing capacity for tea bags,” added Shah.
The ₹800-crore Gujarat-based Wagh Bakri Group is also investing in the segment, expanding capacity by 30 per cent every year at its manufacturing base in Tholka, Gujarat. “We were the first ones to import tea-bag manufacturing machines, nearly 15 years ago, from Argentina. Our India-specific flavours, such as cardamom and ginger, are working for us,” said Parag Desai, Executive Director, Wagh Bakri Group.
The ₹275-crore Mumbai-based Girnar Group recently enhanced its tea bag offerings with detox teas ( desi kahwa ). “The tea bag segment is growing on the back of green and herbal teas. Lifestyle changes among the youth are also driving growth,” said Harendra Shah, Director, Girnar Group of Companies.
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