Companies

Tata Global to take premium route to make Tetley a billion-dollar brand

Priyanka Pani Mumbai | Updated on January 12, 2018

Adil Ahmad

Looks to enter new markets, tea segments

Tea and beverage maker Tata Global Beverages Ltd (TGBL), a part of the diversified conglomerate the Tata Group, is on a premiumisation drive and expects the strategy to brew some good results for its tea brand Tetley.

The company expects Tetley to become a billion-dollar brand in the next three years, a top official said. Tetley will be the first brand from TGBL’s portfolio to achieve that feat through a slew of measures, including getting into newer markets and new segments through the premium route.

TGBL’s Global Marketing Officer, Adil Ahmad, told BusinessLine,: “The idea for Tetley is to become a billion-dollar brand by 2020. That’s the vision and we want to achieve that through three main elements — base business, white space and NBD (new business developments).”

Largest overseas buy

Founded in the UK about 180 years ago, Tetley was acquired by the Tata Group in early 2000 for about £271 million making it one of the largest overseas acquisitions by an Indian company during that time and also helping the group to enter the global black tea market, a market that is witnessing a slow growth.

To tackle this, TGBL is slowly getting aggressive as competition from brands like Twinings, Lipton and PG Tips in the non-black tea market is heating up. Globally, Twinings and Lipton play in the green-tea segment, herbals and Ayurveda infusions among others, which are catching up fast with the younger generation.

Ahmad said the company is aggressively tapping the non-black tea and the functional tea (those with health benefits) segment and is in various stages of ideation to launch new segments to improve sales globally and garner maximum market share.

Global market

The company had recently launched a few premium tea (mostly herbal and functional) and within a year of launch has garnered one per cent of the total tea market in the UK and about 5 per cent of the tea market in Canada through its Ayurveda range. Tetley Signature, another premium tea, launched in France, is also doing well, said Ahmad. It has also entered large tea drinking markets such as China via the e-commerce route in partnership with Alibaba.

“Tetley is 31 per cent of the Canadian market. It is 19 per cent of the UK market. So, we are very strong number two brand in the UK, with very good momentum we should be the number one soon,” Ahmad said adding that focus on innovation in the health and wellness segment is leading the growth.

Despite such measures, the company has miles to go before it can become a real global player. Of the $40-billion (₹2,40,000 crore) tea market globally, Tetley was at a mere ₹2,676 crore in 2015-16, according to TGBL’s annual report.

Twinings is already a billion dollar brand at ₹9,726 crore globally, as per 2016 annual report of its parent company Associated British Foods Plc. Unilever’s 2016 mentions that its tea brand Lipton has sales worth €1billion (₹ 7,227 crore).

Published on June 14, 2017

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