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Sujata Agrawal
For the last 170 years, ever since the
Tetley brothers — Joseph and Edward — started
selling tea in 1837, Tetley has built its brand worldwide
by creating innovative products and listening to the
customer
Tetley
is Britain’s favourite brand of tea, savoured in
over 10.5 million homes every year, with a 27 per cent
value share of the UK’s tea market. The inventor
of the ubiquitous tea bag, Tetley’s product innovations
— which extend to drawstring tea bags as well as
‘stay-fresh’ packaging — have conquered
the hearts of tea lovers worldwide. Little wonder that
the brand is well known in 41 markets globally, including
Australia, Bangladesh, Canada, France, India, Pakistan,
Poland, Russia and the US.
“Tetley is successful for
a number of reasons,” says chief operating officer
Peter Unsworth. “At our core is a product which
is completely in tune with current trends. Our people
have a passion for the business and proudly tell their
friends about Tetley products — how healthy they
are, the great and tremendously varied tastes they offer,
the exciting places they come from, and the way they
have been produced with care for the environment and
for the communities involved.”
Brand basics
The brand has been built on a number of key approaches.
The first and most important is product quality —
achieved through getting best-in-business tea buyers
and blenders, and ensuring precise manufacturing processes
and quality assurance systems in manufacturing facilities
in the UK, India and the US. Tetley sources tea from
about 25 different countries including Malawi, India,
Kenya, Sri Lanka and Indonesia, to offer distinctive
blends to customers in various regions. “If a product
says ‘Tetley’ on the label, it must taste
great, every time, anywhere in the world,” says
Unsworth emphatically.
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Product quality is backed by
an external focus. As Unsworth says, “Having a
great product is no good if it’s not what consumers
want to buy.” Tetley’s consumer base is wide
and ever-changing; tracking consumer preferences and
habits is a challenge. As it travels round the world,
tea gets ‘flavoured’ by local and regional
traditions and cultures; people in India like it strong
and sweet, while the Polish have a great love of strong
Earl Grey. Even the basic understanding of what constitutes
tea is changing. “In today’s image-conscious
society, product format and the drinking occasion are
important factors in purchase decisions,” Unsworth
points out.
Innovative advertising has helped
in no small measure in building the brand globally.
The animated ‘Tetley Teafolk’, for example,
helped build the brand in the UK. The latest campaign
features members of the public and Tetley employees
— who reinforce the fact that Tetley is ‘everyone’s
cup of tea’.
The long and winding road
Over the years, Tetley has had many corporate identities
but the passion for tea remains unchanged.
In 1974, the Tetley Tea Company
was bought by J Lyons and became Lyons Tetley. Four
years later, Allied Breweries acquired the business.
The current Tetley Group identity was created in 1995,
when a group of investors bought the worldwide beverage
business from Allied Domecq (Allied Breweries). In 2000,
in a historic deal, Tata
Tea acquired the Tetley Group and it became part
of the Tata Group. Tata Tea and Tetley are together
looking to take advantage of the opportunities offered
by world tea markets.
The global tea industry is not
only highly competitive; it is also very changeable
and faces many challenges. “The reality is that
our business currently depends on a small number of
markets and on mainly one product, black tea, which
now has low growth worldwide and is in decline in some
key markets,” Unsworth admits. “Customers
want new variants and convenience, while shareholders
want rapid returns as well as long-term growth.”
Striking the right balance is not easy.
A changing cuppa
Changing customer tastes means tea drinkers are increasingly
demanding healthier options and greater convenience.
The ability to understand and respond quickly to diversity
and change gives competitive advantage. Tetley puts
a lot of effort into gaining consumer insights, so it
can anticipate and meet the needs of tea drinkers globally.
At Tetley, tea now has new avatars,
including green, red, and white tea. Then there’s
chai, decaffeinated tea, ready-to-drink or RTD,
specialty flavoured teas and fruit and herbal infusions
with exotic names like Summer Merry Berry, Mango Passion,
Tangy Pomegranate and Ginger Mint. The decline in the
black tea market is being balanced by growth sectors
such as these specialty and herbal teas.
As Tetley enters new markets,
it offers customised products based on market studies
of customer tastes and preferences. In India, for instance,
Tetley has launched variants that are relevant to Indian
taste buds — flavours like elaichi, masala
and ginger.
Tetley also continually innovates:
with new packaging like the ‘stay-fresh’ flip-top
carton, new blends like ‘Tetley Extra Strong’,
and new products like ‘Tetley T of Life’ (launched
in 2005, it became UK’s fastest growing brand of
iced tea and is now called ‘Tetley Ice T’).
Tea is increasingly being seen
as a health drink, says Unsworth, because it contains
antioxidants and theanine, has less caffeine than coffee,
and contributes to hydration. Tetley has created a niche
set of products in the health category — green
tea, organic and decaf — offering a ‘healthy’
proposition compared to carbonated soft drinks, coffee
and alcohol. “They are not only good for you but
they taste great as well,” he says.
In the RTD segment, Tetley has
launched products in the UK, Australia and Canada, but
says it is still on a learning curve. Unsworth feels
there is strong competition from soft drinks in this
segment, but it has the potential to attract youngsters
who want a healthy and tasteful alternative to coffee
and colas.
People are not only moving away
from black and towards green tea, but to drinks that
are not tea in the purest sense, because they do not
come from the Camellia sinensis plant. One of Tetley’s
newest brands, Tetley Redbush, is a ‘flavoured
tea’ in the health drink category which isn’t
from a tea plant, but is becoming very popular, says
Unsworth.
A world to win
Large though it may be, Tetley reaches only half the
tea-drinking world. Of the top 10 tea markets, which
account for 65 per cent of the world’s packaged
tea sales, Tetley and Tata Tea are present in only five
— India, Poland, Russia, the UK and the US. At
present, they are present in only 35 per cent of the
global markets and have just 4.5 per cent of the global
tea business.
Tetley’s goal is to become
a global leader in the international branded tea business.
That explains the slew of acquisitions it has made over
the last two years. These include Good Earth Teas, a
specialty tea brand in the US; a minority stake in Joekels
Tea Packers, the third largest player in South Africa;
and JEMCA, the market leader in the Czech Republic.
JEMCA, which sells a range of
black, green, fruit and herbal teas, is Tetley’s
first east European acquisition, and it has given them
a leading position in a market where tea consumption
is high. In the US, both the Tetley and Good Earth brands
will be managed by a single team and Tetley could consider
introducing new products under the Good Earth label,
which has a strong brand identity in the US.
Tea-ing off
It’s an ambitious target: Tata Tea and Tetley plan
to double their consolidated turnover from Rs3,100 crore
to Rs7,000 crore within the next five years, using a
three-pronged approach: leverage opportunities and favourable
trends; enter new geographies; and develop business
streams that have the potential to outweigh the black
tea decline in developed markets. “We want to see
the Tetley brand available in more countries and offer
products that consumers want,” says Unsworth.
More important than business
plans is changing mindsets, to create a completely new
business culture at Tetley. “How we do things,
rather than what we do, will be the difference between
success and failure as we go forward,” says Unsworth.
“The emphasis is on increasing our agility as well
as the pace of decision-making and implementation, in
order to get ahead and stay ahead.”
But the most potent business
driver by far for Tata Tea and Tetley is their vision
of ‘challenge for leadership in tea around the
world’. Unsworth elaborates, “By ‘challenge’
we mean ‘doing things differently’. ‘Leadership’
is not about size; it is thought leadership. We want
stakeholders around the world to think of us as the
tea company; the way Virgin is perceived to be as big
as British Airways, when in fact it’s just a fraction
of the size.”
It is this kind of passion
and innovation that will continue to delight tea lovers
round the world with more interesting tea-times!
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Doing the
right thing
Environment, ethics
and social initiatives are the focus of Tetley’s
CSR efforts
Tetley,
in different countries, supports projects that
help build communities. “We have a responsibility
to look within our supply chain and do something
about the environment and social injustice,”
says Sara Howe, director of Company Identity and
Communication, who heads the corporate social
responsibility (CSR) function in Tetley. "What
we do is driven by the complex needs our varied
stakeholders. Shareholders want good financial
returns, consumers want to buy products from companies
they see as 'socially responsible’ and increasingly,
I find that our people, too, want to do things
right and work for a company that does things
right,” she adds.
Tetley
has three clearly defined CSR areas — environment,
ethics and social initiatives. It
partners with UK-based development charity, Concern
Universal (CU) to provide access to safe water
for people living in Malawi’s tea growing
areas. Malawi is one of the poorer countries in
the world and Tetley sources more of its tea than
any other packer. “We felt it was right to
do sustainable development, not relief work,”
says Howe. Tetley employees also have the opportunity
to earn a visit to Malawi and use their skills
to build the capacity of CU.
Howe
visited Malawi for the first time three years
ago. “I think this project, which has been
on for three years, will make a positive difference,
both to Malawi’s rural poor and to the Tetley
people involved,” she says. “The real
success is in understanding what people in Malawi
want, and helping them to help themselves,”
she says.
Tetley’s
environment initiative involves using resources
wisely and well. Its three UK sites already have
the ISO14001 accreditation for environment, and
are working to further cut down waste, conserve
energy and reduce overall environmental impact.
In packaging, the focus is on reducing packaging
quantity, increasing recyclability and developing
optimum packaging specifications.
Tetley
is also a member of the Ethical Tea Partnership
(ETP), an organisation committed to ensuring that
the tea sold by its members is produced in a socially
responsible way, and that tea estates provide
decent, clean living and working conditions for
workers and their families. Over 90 per cent of
the tea sourced by Tetley comes from countries
where ETP is active, and senior executives are
closely involved in supporting ETP work, as well
as in creating awareness of its activities.
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