Innovation, consistency and focus have been the critical ingredients in Tetley Canada's recipe for success

To get in the good books of tea drinkers, as discerning and demanding a community of aficionados as any, is no easy task. To manage this for more than a century with people from a variety of lands and cultures takes some doing. The Tetley experience in Canada is a sterling example of the commitment that a project of this nature entails.

Canada is a diverse country blessed with a rich social and cultural heritage, and a wealth of natural beauty. Tetley, a Tata enterprise since 2000, has achieved significant success in the Canadian tea market, and its business model there is now the template for the brand's expansion across the continent.

Tetley first established trade links with Canada in the early 1900s, when Tetley tea was sold through the country's oldest company, Hudson Bay Stores. Distribution was sporadic, depending as it did on the price of tea and when Hudson Bay Stores was willing to purchase a container of tea, which then had to be shipped from England.

In the early 1960s, the Beachnut Co, which owned the brand, established a sales and distribution network in Canada, but this was not enough to achieve a significant market presence. Following an appraisal of the market in 1968, the then Lyons Tetley realised that success depended on establishing deeper roots in the country.

Consequently, the company's first local general manager, Alf Robinson, was appointed. Based in Toronto, his mandate was to grow the business and, over the next 24 years, Robinson did just that. With limited resources, he steadily created what is today Tetley Canada's flourishing outsourced business model.

Distribution issues were resolved in the early 1970s with the appointment of a number of committed broker-distribution sales agencies. This became the backbone of Tetley's sales success. The brokers owned the product (which continued to be sourced from the UK) and this meant they had a vested interest in making a sale. 'No' was not an acceptable answer from a retailer and, as a result, wholesale and retailer distribution grew rapidly.

A senior commercial manager joined the team from Tetley UK to provide a link between the mother factory and finance. The additional resources helped create a team of bright and strategic thinkers. The importance of investing in marketing and promotion was realised early on. All marketing, advertising and promotional activity was outsourced to local agencies, with the best teams appointed to work on the business.

In 1969, Canada was predominantly a black tea market. Tetley's differentiation was that it offered 20 per cent more teabags in a pack and that it had a special tissue that allowed the flavour to flood out. This was reflected in the brand's advertising — 'better teabag…better tea' — a message adopted by the Tetley Tea Folk when it was introduced through television advertising in 1977.

Tetley's market share grew rapidly, reaching 17 per cent by 1983, when the competition woke up to the threat the burgeoning brand posed. Brooke Bond introduced PG Tips in the same pack size and tissue and launched a major attack. Tetley countered and ultimately won the day, with its market share breaking the 20-per cent barrier for the first time.

Tetley's unrelenting drive saw it secure leading-brand status in 1986, the year the company launched its first big effort in the speciality tea market (with a limited mix of flavoured black teas). The competition remained aggressive. Between 1985 and 1988, Unilever purchased competitive tea brands Red Rose and Salada. The success of these brands secured the company a 49-per cent market share to Tetley's 25 per cent.

Tetley got innovative in its bid to seize back the momentum. In 1989, it launched Tetley round bags, which were a major hit, helping it achieve the ambitious target of growing the brand by 25 per cent in 18 months. Tetley overtook Unilever to become market leader in 1996 and, today, its Canadian arm is an outstanding brand leader in the black tea category with a 45-per cent value share.

As in many other developed tea markets, demand for black tea is decreasing in North America. Tetley Canada anticipated this slow but long-term decline and recognised the need to counter it by exploiting niche growth areas. It launched more speciality and herbal teas, including green and decaffeinated teas and fruit infusions.

This proved vital, for these sectors have grown dramatically over the last two decades. They are no longer niche products; rather, they account for almost half of the total market value. Tetley became the speciality tea market leader in Canada in 2002 and has continued to push ahead on this front. In 2003, it moved its full range of 23 speciality teas from traditional carton packaging to an innovative stay-fresh canister format, which also gave the range good visual impact on crowded supermarket shelves. This move paid dividends, with sales growth outpacing the category's growth by 10 per cent.

Tetley Canada has also crafted a market for itself in the ready-to-drink iced-tea category. Building on its strategy of being the most innovative tea company in the continent, Tetley sought contract packing arrangements for products using unique packaging and flavour formulas developed by Tetley USA.

Tetley's accomplishments in Canada are underpinned by a track record of developing innovative products and being first to market with them. A consistent level of consumer advertising and promotional support has embellished this effort, enhanced by the discipline of focusing limited resources on the best potential opportunities and a willingness to take measured risks. Today Tetley Canada has the largest brand share of the company's worldwide business units. Remarkably, it has reached this high point with just 10 employees and continues to resist the temptation to grow the organisation.

Although it has a commanding lead over its nearest branded rival, Tetley continues to monitor market trends and respond with innovative solutions to increase sales and brand share. In May 2005, it entered the small but fast-growing sector of 'Chai tea' concentrates, with a pilot in western Canada before a national rollout. Chai is a spicy tea concentrate which, when mixed with hot milk, producexs a warming drink. It is all the rage in fashionable western America and has three product variants: black tea, green tea and red tea.

Tetley Canada's successful drive for growth was spearheaded, since Alf Robinson's retirement in 1993, by its President Glynne Jones, who recently relinquished this role to head the Tetley business in the US. There he will be deploying the same mix of market understanding, innovation, speed to market, consistency, focus and organisational design to develop Tetley USA's 9-per cent share in the black tea market and build a presence in tea sectors where the company has been a late starter.

Successfully adapting Canada's recipe for success in the US will be the foundation for future growth in the world's largest economy, and another significant contribution to the joint Tata Tea and Tetley vision of challenging for leadership in tea around the world.