Tata Tea takes the aromatic route to homes via Tetley
The Financial Express — December 30, 2004

Tata Tea has decided to brew the concept of ‘customised’ flavoured tea bags with its acquired brand Tetley in India. The aim is to garner volumes by taking Tetley into the mainstream consumer tea market. While three of these flavours — masala, ginger and lemon — have been customised specially for the Indian consumer, the fourth — earl grey — one of the popular flavours worldwide, is being introduced for the first time here. The flavours are being test-launched in Delhi and select metros in the North and Mumbai, but plans are afoot to launch these in all major metros.

“With the flavours initiative, we hope tea bags become mainstream in its appeal rather than niche. We also believe, we can move faster into consumer market with this,” Tata Tea managing director Percy Siganporia told FE. Tea bags market currently accounts for a minuscule 1% of the total 700 million kg tea market. A stagnant category till a few years ago, the category has, however, shown signs of revival since last year. From just about 1 million kg in volume, the category has grown by 25-30% this year.

The dichotomy, however, is that growth in tea bags category is largely led by the institutional segment. The consumer-household market has not been impressed by the tea bag aroma as yet. “Tea bags have not only seen tremendous acceptability in the institutional segment but are also emerging as a profit generator for the segment,” Mr Siganporia said. The bigger market, however, is the consumer segment and to crack that, Tata Tea is using the ‘flavoured’ route.

“We are now moving into homes and we have not shown the product to the institutional segment as yet. Focus is completely on domestic household trade,” he added. Not surprisingly, the flavours are being launched at a ‘comfort price pack’ of 12 tea bags at Rs 20 as against the normal price of Rs 32. According to Mr Siganporia, the launch is led by consumer insight which pointed out that tea — be it masala, lemon or ginger — is used as an ingredient rather than flavour in Indian households.

“The Indian consumer wants a bold and hard-hitting tea first, and then a flavour which other flavoured teas don’t provide,” he said. Tata’s focus on tea bags, he added was, also part of the plan to give tea a facelift from an otherwise fuddy-duddy image. With this initiative, the company hopes to see a triple digit growth in Tetley tea brand by next fiscal from the current 25%.