Sie sind auf Seite 1von 59

September 06, 2000 | The Telegraph

Tata Tea brews new Tetley range


Tata Tea is brewing plans to develop new products under the Tetley brand name for the global market. R.K. Krishna Kumar, vice-chairman of the company said that management teams from both Tata Tea and Tetley were working together and will shortly come up with new products. The Tatas plan an aggressive foray into West Asia, Russia and the CIS countries with packet teas under the Tetley brand name. Tetley has a presence in Russia with its tea bags. The Tatas have already started selling south Indian teas under the Tetley brand name. "We are lifting a substantial amount of our South Indian production and putting it under the Tetley brand name," Krishna Kumar said. Addressing shareholders at the 37th annual general meeting, Ratan Tata, chairman of the company said that the acquisition would help Tata Tea in penetrating the world market. Tetley is the second largest brand in the world. The company acquired Tetley for 271 million via a leveraged buyout, through a special purpose vehicle, Tata Tea (GB) Limited. Tata said that the benefits of the Tetley acquisition will not be felt this year. "It will take another three to four years for the benefits of the acquisition to be felt," he said. He said that companys total production in the previous fiscal was 58.4 million kg. "This will increase by another six per cent this year," he further added.The packet tea division achieved a spectacular growth of about 51 per cent last year and expects a significant rise in sales this year. "Our Agni brand has already acquired a four per cent market share," Krishna Kumar said. Regarding the consolidation of accounts with Tata Tea, Tata said it would be done sometime in the near future.

September 06, 2000 | The Economic Times

Tata Tea exploring new markets for Tetley


Fresh from the Tetley acquisition, Tata Tea is all poised to export its global brew to new markets. To cater to countries from the Middle-East to the CIS, the tea major will source teas from India and Sri Lanka for its Tetley brand. Talking to reporters after the companys annual general meeting in Calcutta on Tuesday, vicechairman R K Krishna Kumar said joint teams have been formed to operate in Watawala in Sri Lanka, India and in the UK to frame strategies for increased exports. "This is a three-pronged strategy being worked out to make a product as widespread as possible," said Krishna Kumar. The company is also experimenting with various forms and flavours of tea for both the Indian and overseas markets. "We are also contemplating introducing new forms and brands in the domestic market as well. This could be in the premium quality range," he added. The tea major is likely to use south Indian teas to source its Tetley brand instead of the lower priced Malawi teas which are used for blending purposes. For this, it is putting in place better operation lines and technology. Packaging is another key area being studied seriously. The company is working on various packaging formats currently. Earlier speaking at the AGM, chairman Ratan Tata said that the acquisition of Tetley, which happens to be the second biggest tea brand in the the world would catapult Tata Tea to enter into the world market with its own teas and other products. "The integration of the two companies will create a fast moving and profitable business in the next few years. It would, however, be unfair expect a rapid growth during the first year of its operations.

Possibly it would take about two to three years for the real growth," said Tata. "In fact, if we consolidated the balance sheets of the two companies a 20 per cent return on net worth would be achievable," he added. According to the chairman, a six per cent higher production is expected this year. Tata Tea , during the last one year produced 58.4 million kgs which has bee marginally lower than the previous years figure of 60.7 million kgs. The companys packet tea division achieved a 51 per cent growth during 1999-2000 over the previous year despite competition. Its new brand, Agni, established a strong presence in the market, and the brand achieved a sale of 12.6 million kg in the first year itself.

November 23, 2000 | Business Standard

Tata Tea mulls launch of Tetley brands in India


Tata Tea Ltd is weighing the option of launching Tetley brands in India. Abhijit Mazumdar, executive director Tata Tea, though refused to give the specific time of launch, it is likely to be in the early of the next financial year. Mazumdar, however confirmed that the company is looking at the possibility of launching the brands, in view of the over-saturated tea market. Tetley instant tea is available in a wide variety of flavour which are peach, lemon, earl grey, black currant and strawberry. The company is eyeing a 26 per cent market share of the Indian packet tea market, in the current financial year. The packet tea division achieved a growth of about 51 per cent during the year. Tata Tea has devised a three-pronged strategy to further enhance the Tetley brand. The company would be sourcing tea from India, Sri Lanka and would also consolidate the Tetley brand in the Middle East and CIS countries. Tetley, though a known brand in the Middle East and CIS, is not marketed. There are plans to launch high quality packet tea and introduce new formats in packaging. Joint teams have been formed to work on it. Tata Tea is on a plan to promote tea as a health beverage. Tata Tea's production at 58.4 million kg was marginally lower than previous year's 60.7 million kg. Though the south Indian estates produced close to last year's output but estates in Assam and Dooars lost 2.3 million kg. However, Agni which was launched this year has managed to corner a four per cent market share with 12.6 million kg, in its segment.

January 24, 2001 | Business Standard

Tata Tea on an African safari


Tata Tea, the worlds largest integrated tea company, has decided to revive plans to

acquire tea gardens in Africa. The acquisitions are meant to better synergise operations between Tata Tea and Tetley. The company, following the acquisition of Tetley, plans to enter new markets and the plantation acquisition drive is to push volumes in the new markets. RK Krishna Kumar, vice-chairman of Tata Tea, said: "We are eyeing acquisitions of tea estates in Africa. We buy significant quantities from Africa, but in view of the rising prices there, the acquisition of tea gardens is a more viable option." Labour costs are also around 50-55 per cent lower in Africa, he added. Krishna Kumar added Tata Tea, along with Tetley, will focus more on the US market as consumers there are slowly shifting towards tea. On the other hand, the UK market, the worlds largest, has saturated. The two will also focus on new markets in Russia, Poland and West Asia. Tata Tea and Tetley are present in these countries in a very small way, but growth potential is enormous. For its requirements, the combine will source tea from Tata Teas south Indian and Sri Lanka plantations. In India Tata Tea will launch some of the Tetley brands, but only in the premium segment, he said.

February 01, 2001 | The Economic Times

Tata TeaTetley merger makes sense, says Kumar


When Tata Tea acquired the Tetley group last February, it was hailed as a landmark deal-the coming together of a company that was very strong on the tea production side and one that was very strong on the marketing side. Naturally, the next logical step should have been the merger of the two entities. But senior Tata officials, at the time of the acquisition, maintained that both companies would remain separate entities. Now, after a year, a merger in future is making more and more strategic sense. At least, that is the thinking of Tata Tetley chairman, R Krishnakumar. "I see us fusing all these entities into one super global company-may be with a listing on the New York Stock Exchange, the London Stock Exchange, the Bombay stock Exchange and so on seamlessly operating as one entity, deriving all the efficiencies of integration and imparting the necessary aggression in the marketplace to gain market share, " said Mr. Krishnakumar, Chairman, Tata Tetley and vice-chairman, Tata Tea. "It will be a very successful global tea company, owned by the tatas, an Indian company and very successfully run across the globe," he added. The Tetley group has a strong marketing network in 35 countries across the world while Tata Tea has a strong production base in India and Sri Lanka. It is also looking at acquiring tea gardens in Africa. In addition to this, it is looking at large scale sourcing of tea from Bangladesh. "The synergies between the two companies are very strong and bringing them together does make sense. But this is only at a conceptualisation stage. We aren't working on anything. It may take a while to happen," Mr. Krishnakumar told ET. Tata Tea acquired the Tetley group in February last year at an all included cost of pounds 271-m. The acquisition was financed with pounds 70-m in equity, of which pound60-m was brought in by Tata Tea and pound 10-m by Tata Tea, USA, a 100 per cent subsidiary of Tata Tea. The equity investment was made into tata Tea Great Britain, a special purpose vehicle created for the Tetley acquisition. Tata Tea raised $75-m (pounds 45-m) through an issue of global depository receipts (GDRs) to help meet its contribution to the equity.

Of the debt component, pound 20-m was brought in through sub-ordinate vendor loan notes and the balance through debt offerings arranged by Rabobank International which acted as the advisor as well as the sole lead arranger for the transaction. The senior debt facilities consisted of four tranches that comprised an amortising term loan (pound110-m), a term loan (pound 25-m) and a revolving credit facility (pound 20-m). Tata Tea is one of the largest tea companies in the world and the second largest seller of packet tea in India. It has 54 estates spread across 57,000 hectares in the four states of Assam, West Bengal, Tamil Nadu and Kerala and produces over 57m kg of tea every year. Tetley is one of the leading tea companies in the world and is also the inventor of the tea bag. It is the leading brand of tea bags in the UK, by value and volume and is also among the top 20 grocery brands in the UK. Tetley blends, packs, markets and distributes tea products, principally in the UK and the US. It is presently the second largest tea bag concern in the world, producing approximately 20bn tea bags per annum. A year after Tata Tea acquired the Tetley group, merging the two entities is increasingly beginning to make strategic sense to the Tata top management, reports George Cherian in Mumbai. 'I see us fusing all these entities into one super global company-- may be with a listing on the New York stock Exchange, the London Stock Exchange, the Bombay Stock Exchange and so on -seamlessly operating as one entity, deriving all the efficiencies of integration and imparting the necessary aggression in the market place to gain market share," is how Mr. Krishnakumar, chairman, Tata Tetley and vice-chairman, Tata Tea sees it. Even though a merger was not in the making when the deal was announced a year earlier, Tata Tea is very strong on the tea production side and Tetley on the marketing side.

April 01, 2001 | The Financial Express

Tata Teas strawberry preserve


Tata Tea has launched the High Range Strawberry Preserve which it hopes will become an ideal breakfast accompaniment for all seasons. The preserve can be used to prepare desserts including souffles, crepes and puddings, and can be mixed with curd to make strawberry yoghurt. The company assures you that ripe and luscious strawberries picked from the hills of Kerala are processed and bottled at its Munnar estate. A 500-gm jar of High Range is priced at Rs 67.

April 23, 2001 | The Economic Times

Watch out for action


Tata Tea's fortunes have started looking up further with tea prices rising once again in South Indian markets and foreign tea unable to make an entry into the domestic market. The price rise is on the back of a hike in tea prices in global markets. Price realisation on the company's tea produce has risen significantly and margins have shot up, The Insider learns. Even after the commodity was removed from the list of quantitative restrictions some time back there have been virtually no imports into the domestic market while import duty on tea has been hiked sharply. This has prevented the earlier dumping of cheap variety of tea from neighbouring countries. While the last financial year for the company would show modest profits, the current fiscal (FY 2002) is expected to be much better in terms of operational profits. Watch out for action on the counter in the weeks ahead.

July 27, 2001 | The Economic Times

Tata to stir Tetley and make tea hip

The branded tea fraternity will soon have a high profile member. Tata Tea is all set to flaunt the international packaged tea brand Tetley which is expected to create some excitement in the rather staid branded tea market. Scheduled to hit shop shelves in the next two months under the Tata Tetley brand name, it will target tea connoisseurs in the upper end segment. Watch out Tata Tea fighting it out with HLL brands like Brooke Bond Taj Mahal and Lipton green label, both of whom have substantial presence in this segment. "We will launch high quality tea for the premium segment followed by speciality tea products. The product line will be extended in due course," Tata Tea MD Homi Khusrokhan told ET. He added that even though the brand is under the Tata Tetley joint venture, it will be Tata Tea which will launch these products. Tata Tea had launched Tetley tea bags as a mass product some time back. This will however, be replaced with premium bags aimed at the high-end segment. Khusrokhan however, refused to divulge the pricing strategy. Industry observers said that the Tata Tetley brand will help fill the upper end slot which so far had middle-low end brands like Tata Tea, Agni and Kannandevan in its portfolio. Analysts say that tea is more of a habit in India. Very few are discerning about the kind of tea they consume. Unlike coffee drinking, which has taken off in a big way thanks to the bar concept there is nothing hip about drinking tea. The branded tea market has been shrinking at 15 per cent every year. Since loose tea prices are at a historic low, the shift apparently is towards this segment. The tea market is estimated at 60,000 tonnes per year. Of this branded packaged tea account for 20,000 tonnes. To overcome the flat growth, market leader HLL is seen growing the market by positioning its tea brands on different platforms. While Taj Mahal is being marketed as Indias finest tea, Red Label is being marketed as a brand which has the perfect combination of taste and strength.

December 13, 2001 | The Financial Express

Tata Tea to launch two brands in next 75 days


Kolkata: Tata Tea Ltd. is planning to launch two more brands in the next 75 days, of which one will be from the portfolio of its UK acquisition, Tetley. The company has already launched its own brand Temptation late last month.
On Monday, Tata Tea placed before its shareholders a scheme to merge its wholly-owned subsidiary Bambino Investment & Trading Co. Ltd. with itself. The merger will come into effect from October 1 this year, after the statutory clearance of the high courts concerned is received. Bambino is an investment company of Tata Tea, having a portfolio of Rs.108.33 crore. The proposal was put to vote under the ageis of the high court appointed chairman, Mr. Dipak Deb. The results were expected late Monday or Tuesday. On the sidelines of the meeting, deputy managing director PT Siganporia said that the company will continue to launch a brand each quarter. Two more brands will be launched in the next 75 days, he said. Mr. Siganporia said the Temptation brand launched last month in south India is being rolled out in the western part of the country. By the end of calendar year 2001, Temptation will be launched here.

He hinted that one of the brands to be launched in the next 75 days will be from the Tetley portfolio. Earlier, vice-chairman R. K. Krishna Kumar had said that the company plans to launch Tetley brands by early 2002. Tata Teas proposal to merge Bambino was placed before the shareholders on Monday.

December 11, 2001 | Business Standard

Tata Tea set to unleash Tetley portfolio shortly


Tata Tea is likely to launch the Tetley brand in India in the next 75 days. Speaking on the sidelines of the company's extraordinary general meeting, P Siganporia, deputy managing director, Tata Tea, said the company would be launching two brands in the next 75 days and one of them is likely to be from the Tetley stable. Tata Tea recently launched its new brand "Temptation", in the premium orthodox leaf tea segment in the south, and has now taken it to the west. "By the end of the fiscal we will launch it in the east," said Siganporia. Apart from "Temptation", Tata Tea has decided to focus on its brands -- Tata Tea, Agni, Kanan Devan, Chakra Gold and Gemini. Siganporia said, "We will phase out any brand that the consumer is not satisfied with." As part of its brand rationalisation exercise, the company has already phased out support for its brands -- Brahmaputra, Lucky Cup, Leo and Chola. The brands, apparently, had shrunk in its potential for growth as well as profitability. While Leo catered to the economy segment of Maharashtra, Karnataka and Andhra Pradesh, Brahmaputra, a strong 100 per cent Assam tea, was marketed in Gujarat and Madhya Pradesh and Chola in Tamil Nadu. Tata Tea will offer a new brand every two months. The company is also working on a plan to tap the tea consumer retailing end such as Barista for coffee. "Our team is exploring various options at present," said Siganporia.

December 19, 2001 | The Economic Times

Co. against price wars to beat competition Tata Tea plans to focus on Core brands to boost volumes
Tata Tea has chalked out a strategy to focus on its three core umbrella brands-Tata Tea, Agni and the yet to be launched Tetley - in order to step up volumes, arrest falling market shares and beat competition from regional players. Announcing the introduction of its premium orthodox leaf tea, Temptation, the first branded orthodox tea in India, managing director Homi Khusrokhan said the company intended to strengthen its core brands. The company is against cutting prices, ad spends and giving out heavy discounts to the trade, he said. Tata Tea would hold margins and not enter into price wars, which destroy brand value, he said. Instead, the company would have alternate offerings at different price points. Tata Tea has a market share of 17 per cent in the packed tea segment in terms of volume. Tata Tea has been facing stiff competition from small and regional players who find it advantageous to capture markets of bigger brands amidst declining commodity prices. In addition to the focus on existing core brands, the company would introduce at least two new consumer offerings each quarter, deputy managing director P Singanporia said, adding that

Temptation was first in the line of its new products. Temptation is priced at Rs.55 per 250 gm pack and is being initially launched in Mumbai, Hyderabad, Bangalore, Chennai and Coimbatore. The company is also planning variants of tea under its Agni brand, which will be followed by launches of Tetley brands to create excitement in the market, Mr. Singanporia said. Its regional brandsKannandevan, Chakra and Gemini- will continue to get focus. Besides focusing on core brands, the company has implemented cost cutting measures in various areas. It has brought down working capital requirement by over 20 per cent in the first six months of the current year, Mr. Khusrokhan said. Tata Tea is also working with the Boston Consulting Group to identify overseas markets for branded tea, especially in areas not covered by Tetley. Asked whether the company was looking at marketing tea through vending machines, Mr. Singanporia said all options were being examined.

January 14, 2002 | The Financial Express

Tata Tea launches Tetley brand


Tata Tea has finally rolled out the Tetley brand of premium tea in Indian markets, almost two years after the brand acquisition. According to officials, the brand has been launched in target cities all over the country on January 10, for consumer sales. This is the first launch of the premium brand in the Indian market. According to sources, the brand has been currently roled out in Mumbai, followed by Bangalore, Delhi, etc. In a bid to explore synergies, the company has appointed Boston Consulting Group (BCG) for integrating its operations with Tetley to this effect. Tata Tea and Tetley will be jointly exploring overseas markets in a bid to explore synergies. Further, the company will be looking more at a revenue-sharing initiative rather than cost. The joint marketing strategy will start with the Middle Eastern and Russian markets. Tata Tea has recently launched "Temptation" the premium Orthodox leaf tea as the first product in the line of new products that the company plans to roll out in future. Initially launched in Mumbai, Hyderabad, Bangalore, Chennai and Coimbatore. Temptation sells at Rs. 55 per 250 gm pack. At present, the company owns five other brands apart from Tata Tea. These are Agni, Chakra Gold, Gemini, Kanan Devan and Temptation. In order to acquire Tetley, Tata Tea had created Tata Tea Great Britian (Tata Tea GB) as a special purpose vehicle. The purpose of setting up the SPV was to ring-fence Tata Tea from any liabilities that may have arisen, post-acquisition. However, the Group was reported to have decided to merge it with Tata Tea after meeting the debt repayment obligations. At the time of acquiring Tetley, Tata Tea GBs debt equity ratio stood at 3:1, but has since fallen to 1.8:1 and is expected to further fall to 1.7:1 by the end of this year. Moreover, Tetleys cash accruals have grown 2.6 times since the last year and thus the debt is expected to be retired faster. In the current year, $8 million of debt was reported to be repaid from internal accruals. Tetley controls 60 per cent of the business in the US. A Few months back, Tata Sons and Tata Tea together infused $30 million into Tata Tea GB to repay vendor loan notes, that it had taken from two venture capital firms, Prudential and Schroder, which held a majority stake of 78 per cent in Tetley UK, prior to the Tata acquisition. Tata Sons and Tata Tea have infused $30 million worth of equity in Tata Tea GB through the issue of 7 per cent convertible bonds, which has helped bring down interest costs.

January 25, 2002 | Business Standard

Tata Tea sells Tetley Pvt label line for $15 million
In a strategic move, Tata Tea has sold Tetley's private label tea business in the US to Harris Tea for $15 million. The private label tea business came into Tata Tea's kitty through the acquisition of the Tetley group. R K Krishnakumar, vice-chairman of Tata Tea and chairman of the Tetley group, said, "We have contracted to sell the private label business to Harris Tea, another private label manufacturer for $15 million." He has also confirmed having received an advance for the deal. Tetley's private label business which controls 60 per cent of the business in US has a turnover of around $6 million. For the period, March to December 2001, Tetley Group reported a 3 per cent increase in sales over the same period of last year. Earnings before Interest and tax has increased by 34 per cent. Tata Tea has appointed Boston Consulting Group to work out an operational integration agenda of Tetley with itself, and its findings will be discussed by the two companies. Senior officials from Tetley and Tata Tea will meet in Goa in February 2002 to kick start the process and develop a structure. "We expect to create a task force consisting of neutral members from the two entities", Krishna Kumar added. The task force will take up two 'live' projects. First, launching of Tetley in the subcontinent. It will start with packet teas, ice tea and ready-todrink tea. The second project will be the launch of Tetley iced tea in the United States, where it is now present only in the tea-bag segment. Tata Tea has the competency to develop instant products (it already supplies the ingredients for these to Snapple, the largest player in the readyto-drink segment). Tata Tea Incorporated, a subsidiary of Tata Tea, will work jointly with Tetley to market the latter's products in America. These are two of the exercises being undertaken to fuse the

organisations together. According to the management, the easy approach would have been to let Tata Tea run its business and Tetley do its own thing. But the strategic intent was to break down the two separate identities and make them one entity, have one central command that takes decisions, without any geographical bias, in matters such as restructuring global facilities, entry into new markets like Bangladesh, Pakistan, Dubai, Russia, Egypt and Saudi Arabia. Meanwhile, Tata Tea has finally launched Tetley, the world's second largest tea brand in India. Tetley will be positioned at the premium segment of the market. Priced at Rs 58 per 250 gm pack , Tetley will have a national presence shortly. The company plans to launch a host of variants and specialty products in the coming months and will be supported by vending machine operations across the country.

February 04, 2002 | The Financial Express Express

Tata Tea launches Tetley tea


Tata tea Ltd has announced the launch of Tetley tea primarily targeted at the urban housewife. Tetley tea will be available to the consumer both as packet tea in 500g, 250g, 100g, packs as well as in teabags. Competitively priced in its category at Rs 58 per 250gm pack, Tetley tea has been launched at Mumbai, Vijaywada and Delhi and is presently being rolled out in target cities all over the country.

February 13, 2002 | The Economic Times Times

Tata Tea, Tetley begin to blend in run-up to merger


Tata Tea and the Tetley group have kicked off the integration exercise that will bring the operations of both companies together. Though a merger of the two companies into a single entity is envisaged in the long term, the managements of both sides as a first step, want to integrate operations. "This (the merger) is something that we have discussed at length many times, but in the first stage, we would have to move rather quickly on functional integration," said Ken Pringle, CEO, the Tetley group. Merging the two companies, according to some analysts, makes immense sense given the huge synergies involved. While Tata Tea is primarily a plantation company that stands to benefit when prices of tea increase, Tetley; a tea-buying and blending company, stands to benefit when tea prices fall. Thus if the two were to be part of the same entity, the ill effects of fall in the price of tea would be partly compensated by the gains to Tetley. Tata Tea has already appointed Boston Consulting group (BCG) to help it integrate the operations of Tetley with itself. The entire exercise is expected to be completed within the next 18-24 months. The two companies would have a single CEO overseeing the operations of both companies in the next eight months or so. Last week, nearly 50 senior managers from Tata Tea and Tetley met in Goa to get the integration exercise started.

For the nine-month period ended November 30,01, the Tetley group has reported strong trading performance with volumes 3.8 per cent higher than the previous corresponding period and sales three per cent higher. Earnings before interest and tax were 20 per cent higher. "We have been gaining volumes in all our key markets and with raw tea prices coming down, the cost benefits have been huge," said Mr. Pringle, in an exclusive interview with ET. The UK and Canada markets have been powerful contributors to the Tetley groups profits. Tetley has gained market share in its key markets with a 41 per cent share of the Canadian tea market, 11 percent of the US and 16.2 per cent of the Australia. In the UK, while the tea market has grown less than 1 per cent, Tetley managed to increase its share to 25 per cent. Its closest competitor, PG Tipps, has a 23.5 per cent market share. "We have relaunched the Tetley brand in the UK. The Tetley Tea Folk who have represented the brand for 28 years, have been dropping and the focus of Tetley tea would now be more on health. The packaging has also been changed and now has a more contemporary look," said Mr. Pringle. Tetley has launched a Pound 15-m ad campaign that focuses on the health benefits of drinking tea and features the strapline: You are the champions and this is your cup. Arch-rival PG Tipps has also axed its long-running chimp campaign for new animated ads.

February 28, 2002 | The Economic Times

Newfound Tata aggression boils over to tea with 'Sholay' brand


This is a battle brewing at both ends. Tata Tea is building up Tetley to be its own Taj for the connoisseur. But it will be Sholay that is expected to be its box office hit to set cash registers jingling. For the largest tea company in the world, this is the new aggression, to take the war for the low end of the market, right into competitors camp. Tata Teas high-end offering Tetley, priced at Rs.58 per 250 gms pack, is positioned against HLLs premium Taj Mahal brand. But the blitz at the low end will be spearheaded by Sholay, softly launched by Tata Tea recently, to take on regional brands and teas sold loose. We will continue to grow at the top end. But the action is at the bottom end and we cant afford to lose out there, PT Siganporia, deputy managing director, Tata Tea told ET. Tata Tea will come out with at least two new offerings every quarter, be it new brands of packet tea, acquisition of garden marks or organic tea. There is going to be a Tata Tea brand at every price point of the packet tea market, Mr. Siganporia said. In the last three months, Tata Tea has gone in for five new customer offerings. Compare this with just two brand launches over the last three years and signs of its newfound aggression in the market shows up. For the first time, Tata Tea is going in for total outsourcing for any of its brands. The entire logistics of packaging, branding and production of Sholay is being outsourced by respective local agencies. This brand priced at around Rs. 30 per 250 gms pack, will be catering to the northern and eastern markets to begin with. The other Tata Tea low-end brand of packet tea Agni, priced at Rs.35 for a 250 gm pack has now been pushed up to the mid-segment, positioned below its flagship brand Tata Tea priced at around Rs.43 for a 250 gm pack. Larger volumes of value-added teas may require additional outsourcing from the auctions. While around 25 per cent of Tata Tea's packet tea requirement is outsourced, the company-owned garden production is 60m kgs per annum.

Besides Tetley's high profile launch recently for the domestic market, Tata Tea introduced its Temptations brand of orthodox tea and Sholay now. The tea major has also introduced the concept of branding its tea estates through tea marks for the first time.

March 20, 2002 | Pioneer (Delhi)

Tata Tea ventures into lowest price segment


Tata Tea on Tuesday forayed into the lowest priced segment of the domestic packaged tea market with the launch of its new brand Agni Sholay. The launch follows the recent introduction of premium brands - 'Tetley' and 'Tata Tea Premium' - and is expected to complete the portfolio of the company that claims to be the largest tea marketing company in the world. "The brand will be our vehicle to compete in the fast growing lowest-end of the packaged tea market," company's deputy managing director Percy Signaporia said. The product, available in pack sizes of 250gm, 100gm and 50gm with a price tag of Rs 31.50, Rs 13 and Rs 6.50, respectively, in the first phase would be available all across north and eastern India. The states being targeted are Uttar Pradesh, Haryana, Punjab, Bihar, Rajasthan, Orissa, Uttaranchal, Jharkand, Himachal Pradesh and other north eastern states.

March 20, 2002 | Business Standard

Tata Tea concocts fresh thrust for Tetley brand


Tata Tea is brewing a new growth strategy for the Tetley brand it acquired last year. The company has decided to launch flavoured tea, iced tea and state-origin tea under the Tetley brandname and is also exploring the feasibility of setting up a chain of tea parlours in the top cities of the country. Conventional black tea, sold under the Tetley brandname, will also roll out across the country through vending machines this year. One machine has already been installed at the Churchgate station in Mumbai. P C Siganporia, deputy managing director of Tata Tea, said: "We will come out with lemon, peach and earl grey flavours along with state origins such as the Sri Lankan variety. In the long run, we also plan to roll out about 150-odd tea offerings from the Tetley stable. "These products will be in tune with demand from Indian consumer, who had hardly experimented value-added tea." On the launch of iced tea, Siganporia said: "We are interested in having presence in iced tea business. We will launch few other varieties soon. However, that will not be in this summer as the groundwork would have to begin two months before the season." He said the company was also exploring the possibility of setting up a chain of tea parlours in important cities. "We have a plan. But that will be rolled out in the medium term. We cannot reveal more about our strategies right now because this is an extremely competitive market," he added. FMCG major Hindustan Lever and many small private players are also evincing interest in the segment. Meanwhile, Tata Tea has already installed a tea vending machine in Mumbai and gauging consumers response. If all goes well, more such units will be seen opened. Siganporia said while tea was a normal drink in India, there was a huge potential in it to enter the premium segment. He added that as Tetley was already being positioned as a brand for the women, additional business launches through the Tetley brand will, therefore, have to be in tune with its image. One such launch will be the launch of state-origin tea. The company has a 49 per cent share in Watawalal plantations in Sri Lanka, under a holding company. Siganporia said the company would target state-origin varieties in the premium segment. Currently, in this segment, Tata tea is having presence through Tata tea temptation and Tetley brands. Its popular brands include: Tata Tea Premium, Kanan Devan, Gemini and Agni.

March 28, 2002 | Telegraph

4-pronged Tata Tea growth strategy


Tata Tea, the countrys largest producer of tea, has worked out a four-pronged strategy for growth in the next fiscal. The growth strategy includes tightening fiscal norms, enhancing brand equity, increasing profitability of the tea estates and restructuring plantations and operations. It has appointed Accenture to help tighten its finances. "A small team from Accenture is also helping us to enhance our brand equity," said P. T. Siganporia, deputy managing director of the company. He said Accenture is currently working out strategies for overhauling the entire supply chain management, to reduce costs. The consultant will also suggest areas of fresh investment, for higher returns. "Apart from enhancing our brand equity, the company is also trying to establish a quality profile norm for plantations and operations with relatively higher profit yields that benchmark operations," Siganporia said. The company is also closely observing the entire tea industrys restructuring plans in the face of low price realisation and high production costs. "It has to be a holistic approach. We cannot do it on our own. We hope that in the next financial year something will happen and accordingly we can implement those measures," he said. The company is also looking at various options like establishment of single estate brands and opening of tea parlours for growing its business. Commenting on the performance of the company in the current financial year, he said it has not been a favourable year for the Indian tea industry, including Tata Tea. Adverse weather conditions along with falling prices have affected the company. "In spite of all this, we shall outperform the industry," he said. The company, which produced 55 million kgs of tea this year, is the second largest buyer of tea in the Guwahati auctions. Tata Tea has also worked out a detailed structural framework for integration with Tetley. It has decided to constitute a supervisory board comprising vice-chairman Krishna Kumar, Homi R. Khusrokhan, managing director, P. T. Siganporia, deputy managing director, John Kelly and Peter Unsworth from Tetley. The supervisory board will manage co-ordination issues across Tata Tea and Tetley like strategy and portfolio decisions, communication, new initiatives for joint working, refinancing options and final plan and legal and statutory issues. The company has also set up eight working groupsgeographic growth, MIS and planning, general (non-tea) procurement, US strategy, research and development, IT, tea sourcing and HR. It has also decided to include Vish Govindaswamy of Watawala Plantations of Sri Lanka in the tea buying and sourcing group, since the company feels that Watawala Plantations will be an important part in the integration process with Tetley. Tata Tea has appointed Boston Consulting Group for working out the roadmap for smooth integration of Tata Tea and Tetley.

April 14, 2002 | Business India

Tea's some time away

Now a global tea major, Tata Tea proposes to use the international Tetley brand it has acquired to strengthen its bottomline in a gloomy tea scenario. Reading the tea leaves is currently a difficult task for a large section of the Indian tea industry as severely depressed tea prices continue into their second year against a background of increased production costs, mainly a result of high labour deployment. Auction prices have fallen and the packet tea segment has seen sluggish sales (according to Hindustan Lever sources the segment witnessed6.4 per cent growth) in the last year, yet players in the industry consider that a focus on value-addition is the only way out for the industry. A firm subscriber to the idea of value-addition has been Tata Tea, one of the oldest tea companies in the country and one which has both plantations and packaged tea. The current depression in th e industry is seen as a difficult phase at the company's spacious headquarters in Kolkata (in fact the company lost 3.5 per cent in market share as per ORG figures), yet by no means a lasting one. With the very recent launch of its Tetley brand in the Indian market, Tata Tea has embarked on its new course of growth which is in many ways a fundamental change from its earlier functional strategy. Tetley, which Tata Tea acquired more than 18 months back, is a leading tea brand in added-value teas in Britain and Canada, and is to be the vehicle for future growth especially in the international market, where Tata Tea intends to play a significant role. For the last two years most tea companies have seen profits decline as a result of lower sales of added-value products and lower realisation of prices in auctions and Tata Tea has been no exception. "We saw it coming," says the management, and it countered by buying out the Tetley brand. The price paid was 270 million or roughly Rs 1,900 crore at 1:3 leverage, which took many within the tea industry by surprise as it was considered an inordinately large amount to acquire a brand. Acquiring an international brand was not somehow thought of in an industry where brand-building exercises are lengthy and indigenous with the exception of Hindustan Lever, which has a portfolio of parent Unilever's brands. Tata Tea paid about 70 million from its own accruals, while the banks came up with 200 million. A subsidiary was floated in the UK, Tata Tea (GB) Ltd., which acquired the controlling interest in the Tetley Group. Tata Tea has further enhanced its stake in the subsidiary by contributing another Rs 30 crore to its equity by subscribing to a 7 per cent subordinated fully convertible bond issue by TTGBL. This infusion of funds enabled the company to replace some of the short-term high-cost debt taken at the time of acquisition. The debt ratio is now a much healthier 1:1.75. "For Tata Tea the future is clearly in the global market," says managing director Homi Khusrokhan. "The Tetley acquisition is expected to transform Tata Tea from a domestic packet tea manufacturer to a global player." The Tetley brand has a major international presence in over 35 countries worldwide, which will make Tata Tea a multinational company. Maybe, but the company's detractors say the tea has been losing out to new-generations drinks such as fruit juices and soft drinks, even in traditional tea-drinking markets such as the UK, Ireland, and Japan. Moreover, coffee's repositioning as a new-age drink has also affected tea's share in these markets. And, more ominously, Chinese flavoured tea has been posing a major challenge to established global tea marketers in these markets. Tata Tea's own strengths include its 55 estates in India that produce 60 million kg of black tea and two million kg of instant tea annually (of which over 80 per cent goes into its own packets), and 11 packaging units. The company spans the entire value chain in tea blending, packaging, branding, marketing, sales, and distribution. Its brand portfolio includes Tata Tea, Agni, and Kanan Devan, a successful brand in south India. In addition there is Chakra Gold, Gemini, and more recently, Temptations and Tetley. Tata Tea has a 19 per cent market share in packet teas, second after Hindustan Lever, which according to market research people has a share of over 36 per cent. These figures reflect the growing change in the packet tea sector, once controlled almost exclusively by Hindustan Lever and Tata Tea, with the former a more dominant presence with the much larger share. With production tilting heavily in favour of CTC teas (fine-cut granular teas grown specially in

Assam and the Dooars), compared to the orthodox varieties grown on the Nilgiri hills and more famously on the slopes of Darjeeling over the last three decades, the Indian packet tea market has emerged as a volume-driven commercial prospect given the output and variety of blends. Other tea companies, including the more prominent ones such as Goodricke or Duncans, became active in the packet tea sector, and currently there are many players both big and small and niche players as well, particularly in Gujarat, where packaged blends do very well. As a result these new companies have gained market share at the cost of Lever and Tata Tea. More recently, with the fluctuations in tea prices, regional players have entered the segment. Small players in the unorganised sector with a regional focus have undercut the bigger companies in the market. Low overheads and sourcing of teas at attractive prices have made regional brands very competitive in the business, which has been growing slowly at around 1-1... per cent in the last couple of years. "The main purpose of Tetley is the leverage it affords in the global tea business," says Khusrokhan, who sees the company concentrating on international business for the future, which would account for two-thirds of revenues. The projections are attractive and Tata Tea bosses hope that the Tetley brand will yield a turnover of more than Rs 500 crore in less than five years. "It would be money earned and owned by the company once the debt is out of the way," he says. Khusrokhan thinks that with the Tetley brand it will be possible to achieve a market share of 30-35 per cent in the Indian market itself by gaining critical mass. An overwhelming need is to reach a threshold in sales. "Once this is achieved we will spread the Tetley umbrella, phasing out the brand in different stages," he says. The first phase of the introduction of the Tetley brand took place in January. Refurbishing and repositioning brands has been an ongoing exercise, while a clear strategy now, he adds, "is to try and straddle as much of the market as possible at various price points and build up powerful brands. This will be achieved by turning four or five key brands into umbrella brands, varying blends, and catering to different parts of the country and different segments." This requires a major shift from a production-driven strategy to a quality-driven one and a new set of rules for the gardens regarding output and plucking norms. "The objective is to bring down costs," says Khusrokhan, "which is why companies opt for higher yields, but by sacrificing yield the output in relation to cost may go down, but it would give quality a preference." The company believes in dedicated tea estates for international-quality teas, including leaf tea estates. As the management points out, the quality of tea in a Tata Tea packet today is different from that two years ago. The decision to focus on quality or invest substantially in buying out a leading international brand like Tetley are strategies the company decided some time ago, when the tea industry in India was beginning to lose some of its bloom. Deputy managing director P.T. Siganporia, an old company hand, says: "We recognised Tetley has a premium leaf brand portfolio and Tetley is the logical vehicle to carry our portfolio through and not just abroad. We needed a suitable brand for our premium segment here. We had to acquire Tetley or else have a potential competitor at our doorstep." Siganporia adds that with the acquisition of the Tetley brand there has been a sea change in how the company is looked at. "Earlier we were seen as the underdog trying to stand up to Unilever. Now we are an MNC in an FMCG segment." Yet the fact of the matter is that both Tata Tea and Lever have been under pressure from smaller regional players, at least in the mass market. Moreover, the international trends have also caught up with Indian markets. Tea is increasingly being replaced by aspirational drinks, at least among the Indian youth. "What it means is that the conventional positioning of tea as a stimulant and relaxant is proving too narrow. The trend is away from home consumption of food and beverages, and tea-producers have missed out on it," says Sonal Shah of the advisory services (food and beverages) division of Rabobank International. "To improve their position they will have to reconsider repositioning tea as a lifestyle drink," she adds.

However, the current size of the premium tea segment in India is small but lucrative and contains both packaged tea and tea bags in select brands, some of which are Lever's Taj Mahal, Hasmukh, WaghBakri, and Twinings in small quantities, and now Tetley. There is a proliferation of brands at the bottom end. While it is as yet too early to say anything about Tetley's prospects in the domestic market, it must be remembered that Tata Tea's earlier effort at introducing the Tetley brand in India was not successful. In the mid-1990s Tata Tea floated a 50:50 joint venture Tata-Tetley. A company watcher says the reason behind its failure was that the launch of the brand was mainly confined to the south Indian market where the brand made absolutely no impression as the preference there was for local brands. With the launch of Tetley, this time as the company's own product, the chances are better. "We are trying to grow from a zero base," says Khusrokhan. The launch has been countrywide and preceded by a heavy advertising campaign none of the routine song-and-dance stuff, but a more emotive focus, says Khusrokhan, adding that the initial response has been positive. Priorities are changing, as is the way of doing business itself. "Of critical importance are the twin tasks of ensuring returns to the shareholder and building brands and laying the foundation for quality," says Siganporia. It is expected that the changes will reflect in the bottomline in the future. The last two years of poor returns have impacted performance adversely both by way of turnover and profits. Income from operations over the nine months ended 31 December 2001 was Rs 575 crore, compared to Rs 621 crore in the corresponding period the previous year. Profit before interest and depreciation was Rs 116 crore, compared to Rs 122 crore. Profit after tax is at Rs 88 crore, compared to Rs 91 crore. Profit figures include income from dividends and profit from sale of shares. In the last nine months the company has posted a higher PAT from operations at Rs 62 crore compared to Rs 56 crore in the previous year. Last year's accounts too show a decline. For the year ended March 2001 net sales declined to Rs 809 crore from Rs 899 crore in the year that ended March 2000. Other income rose significantly on account of sale of shares, from Rs 62 crore to Rs 68 crore and accounted for more than 50 per cent of pretax profits. Total income remained lower at Rs 877 crore compared to Rs 961 crore the year before. Profit before tax declined from Rs 165 crore to Rs l27 crore in 2001. The EPS has declined as well, given the sorry state of the stockmarket. The chief factors behind the decrease in profits were curtailed production in view of quality concerns, poor growth in packet tea, and a 6 per cent decline in instant tea sales, while employee costs and overheads increased. Again, Tata Tea's net worth stays strong. For companies less strong it has been closing time. In the face of unviable costs the industry is going through a shakeout of sorts. "Tea is going through a bad patch," says Khusrokhan, "but it isn't the end of the world." An international strategy to market the Tetley brand abroad is being put in place. Efforts to promote tea as a healthy beverage internationally have been on for some time, but it is not clear whether the strategy has paid off. At home the focus is on quality, which should start paying dividends. Tea is like any other FMCG product, says Siganporia, who points out the flip side: low prices will fuel consumption, and as the demand base increases volumes go up. The company's performance over the next couple of years will be worth watching.

April 15, 2002 | Telegraph

Tata Tea offers Lankan flavour


Tata Tea Ltd has decided to offer teas from its Sri Lankan tea estates for connoisseurs in the country, despite the high customs duty of 100 per cent.

The countrys largest tea producer has 18 Sri Lankan tea estates in its fold through its joint venture company Watawala Plantations. The tea will be available under the Zesta brand name. "It has been decided to arrange and sell some of our own Sri Lankan teas in the country," said P. T. Siganporia, deputy managing director of Tata Tea. The company has made a quiet launch in the south Indian markets, especially Chennai and Bangalore, besides Mumbai. Upmarket teas under the Zesta brand are also being sold through the Taj Group of hotels. "We know that the company has to pay a high import duty for Sri Lankan tea, but consumers are ready to pay. These teas are meant only for upmarket consumers. At the moment we do not have any intentions of sell Sri Lankan teas in volumes," Siganporia said. Zesta was first launched in Sri Lanka in a 250 gram PET bottle of premium leaf tea. Zesta also has an extensive range of tea bags, including several fruit flavours. He said Watawala Plantations might not pay any dividend this year to Tata Tea. "Last year they paid a maiden dividend of 10 per cent to Tata Tea," he said. Watawala Plantations is a joint venture between Tata Tea and Estate Management Services of Sri Lanka. In 1992, the Sri Lankan government decided to privatise the management of the then existing 22 regional plantation companies, which consisted of tea, rubber, coconut and palm oil. This paved the path for a strategic joint venture between Estate Management Services, a Sri Lankan firm, and Tata Tea, which took over the management of a multi-crop plantation companyWatawala Plantations. Watawala Plantations manages 18 selected prime tea estates with few rubber plantations, as well as Sri Lankas only palm oil factory. The total area of Watawala Plantations is 12442.13 hectares, of which 41 per cent is tea, 18 per cent is rubber, 8 per cent is palm oil and the rest 7 per cent is kept aside for the purpose of fuel wood. Siganporia said Watawala has fetched best prices in the Colombo auctions in 2001-02. The market for Sri Lankan tea remained buoyant following sustained demand from the Middle East, Russia and CIS countries which contributed to the higher price realised.

May 11, 2002 | Business Standard

Tata Tea to focus on core brands to up volumes


Tata Tea has chalked out a strategy to focus on its two main brands Tata Tea and Kannan Devan and the recently launched Tetley brands to step up volumes, arrest falling market share, and beat competition from regional players. The company is also planning to launch flavoured teas under the Tetley umbrella brand as well launch plantation brands, Homi Khusrokhan, managing director of Tata Tea said. "We will be focussing on Tata Tea and Kannan Devan brands. Tetley, following the launch in the domestic market, has received a favourable response from consumers," Khusrokhan said. Tata Tea plans to build Tetley into a Rs 100 crore brand over a period of 3 -5 years time. In addition to the focus on existing brands, the company will also be introducing at least two new consumer offerings each quarter. To increase out of the home consumption, Tata Tea will be setting up 200 vending machines across the country by the end of this year. Tata Teas competitor Hindustan Lever has done its vending machine foray in tea using two brands Taj Mahal for tea served hot and

Lipton for iced tea, including flavoured variants. Meanwhile, Tata Tea has phased out support for four brandsBrahmaputra, Lucky Cup, Leo and Chola as part of its brand rationalisation. The company recently launched Agni Sholay, targeted at the lower middle income groups. The consumption in the low price segment is around 80-90 million kg per annum.

May 20, 2002 | The Financial Express

Taste, Touch and Feel... That's what the (Tea) market needs
No milk and sugar please. Eight cups of black tea a day and a penchant for single malt whiskey are the singular tastes of the quiet and unassuming veneer of 59 year-old Tata Tea managing director Homi R Khusrokhan, who hides an aggression that has enabled the companies he has headed, to reach the pinnacle of their success. Armed with a Bachelor of Commerce from Sydenham College, a Chartered Accountancy degree and a Master of Science (Eco) from the hallowed halls of the London School of Economics, this Mumbaiite has traversed his way from working with Ford Motor Company to spending 29 years in Glaxo Laboratories (India) Ltd, before his current stint with Tata Tea. He has been the managing director of Glaxo and Burroughs Wellcome, the vice president of the Bombay Chamber of Commerce and a nonexecutive director on the board of Hindustan Lever Ltd (HLL). With a job that takes him to every part of the globe and rarely gives him time to play his favourite game of tennis, Mr Khusrokhan stopped to take a breather over a cup of tea with Namrata Singh and Maithreyi Seetharaman of FE. Excerpts: So, how has it been since you joined Tata Tea a year back? Well it was when? 19th February.... Yes, and then the issue of your being on the board of HLL came up...(remains silent )....So, how has it been from pharma to tea? Interesting. Its a different world, but I see a lot of similarities, particularly the similarity in the generics we had in the pharma industry and the regional players that we have here. Similar market place. Similar, in the sense, its crowded. Recently, Tata Tea has been on a brand launching spree.... We have significantly moved up the decibel levels on Tata Tea, which has direct and indirect benefits. The awareness about the company has a slightly more aggressive posture in the marketplace. That really seems to be coming through. We are actively trying to look at all the niches and plug all the gaps in our portfolio. We clearly have a large gap in the top end. Weve never had a premium tea offering, the best was the premium tea in the south, Chakra Gold. Weve never had a premium tea in the north. We also felt that since most of the growth is taking place at the bottom end of the market. There was an untapped potential there. Thats why we decided to attack the very bottom end of the market. So, part of the stuff were doing is strategic and longer term, but the immediate benefits are that we have a much more aggressive posture in the market place, showing that we mean business. Any changes in your market share position? As of now, all the big guys are losing market share, so I cant stick my chest out and say that weve started showing an improvement in market share. The challenge is to contain that block and start the process of reversal. Its not going to be instant. The big players have both lost considerable market share in the past couple of years. The process of reversal is now on. So its difficult for me to say weve started gaining. Are you losing out to loose tea? A combination of loose tea and regional players. I think the statistics seem to show that the share of

loose tea has also grown. The substantial increase in market share is the collective share of the regional players, which has moved up from 30 per cent to 37 per cent in one year. There is a 7 per cent growth there, which has come at the expense of the big players. Is that a matter of concern? It is a matter of major concern. How are you addressing it? Besides Agni Sholay, we have to really differentiate our product offerings and focus on premium tea, and the benefits to the consumer. So, we create an awareness of better quality teas, premium teas, the top end of the market, and aggressively drive quality in our packs. How are you going to differentiate your product offerings? Well it will be, (a) a combination of the actual inherent quality of the product and, (b) the perception, which needs to change. There are different teas. There are teas and teas in the market, you can pay a certain price for a certain quality of tea. But if you want a better quality then you have to pay a bit more. So you justify the value differentiation. How has Tetley done? Tetley has done well for a new product launched in a very small segment. I think the level of interest it has aroused is quite considerable. The numbers, of course, will take time. The challenge is not to take away share from somebody else in the segment because its such a tiny segment. That would be a mugs game! We have to really think in terms of growing that segment and making it more attractive. The focus will be on creating an awareness of better quality teas, not just trying to take away shares of that market. We have to collectively grow that segment through promotions and awareness campaigns. Actually, taste, touch and feel ... thats what the market needs. Just like we did for Temptation thats a great success because we were actually canvassing the quality of the tea, the feel of the tea. You have also been looking at launching Tetley in overseas markets. We have taken Tetley into Kazakhstan and we are looking at growth opportunities in Russia and some CIS countries. There are possibilities in the Middle East, but those are in the early stages. Are you going to do this through exports? It could be through exports, it could be through local manufacturing in those countries because exporting out of India may not be sensible for some of those markets. I cant tell you what the final model will be, but I think some of the local manufacturers would have to be there. Would you have to enter into some alliances? Sure, we will either enter into alliances, otherwise we will do it ourselves. The other regions where we have already made a start in trying to move business around India is to take Tetley into Pakistan, Bangladesh, Sri Lanka. See these are difficult markets. These are initial projects, they havent been launched as yet, but work is going on in those projects. What has been the progress of integrating Tetley with Tata Tea? We are not going through something that will culminate in the merger of the companies. We are really trying to create an organisation that works seamlessly. Now we are finding that some departments are already working seamlessly and, therefore, we are making progress along the right path. The process is divided into two parts. Project teams which are located on project-related activities where we say, here is a new geography, can we put a team together from both companies to research a new geography? And some are process-related. These think in terms of IT, common process of finance systems, common process in product development. Its a mixture of two things and there are varying degrees of progress in each of these teams. What is the status of the UK subsidiary, Tata GB? Its an SPV (special purpose vehicle). Its still very much there. Our holding, if you take the entire Tata stake, is 100 million. 70 million was the original contribution to equity and 30 million was put in later as bonds and multiple bonds, to substitute some very high cost debts.

Currently, the debt-equity is 1:1.75, but it will come down to 1:1.6 by end of next financial year. You said you wanted to become a global player rather than just a domestic company. What are the moves in that direction? I would say that we are already a global player. Its just that we have decided to use the brand Tetley for international markets and Tata Tea in India. I dont think it would make sense for us to try and create an awareness for Tata Tea internationally. Tetley is the big brand and thats what the company will use. Tetley will be our international face. As a Tata group company, are you looking at your own progress in terms of which areas you want to grow in? I think with the Tetley acquisition, it puts a huge piece on the plate, and I would sincerely hope that we first consolidate, grow our business internationally and then look at other things like acquisitions and diversifications. Our first priority would be Tetley and growing the international business. Once weve got a global integrated picture working, we can look at other things. That would take a couple of years. Are you planning to hike your stake further in Barista? No, we are very satisfied with the way Barista has performed. It has done spectacularly well over the last year. Theyve justified our full faith in them as a management team. They put in their best. From the long -term perspective, youve talked about tea-parlours. When will that happen? I can say that perhaps the learning experiences of the way coffee has been marketed is very valuable to us. I am not saying that we can identically replicate their (Barista) model, but it brings you closer to the customer, it gives you new ideas of how you can develop and create awareness of good quality teas. These are all valuable learning experiences from coffee. Whether it is replicable in tea, Im not sure. So far it has not been successfully replicated in tea anywhere in the world. We havent made any concrete plans to go for parlours. Tea isnt an impulse market, but there are other things that hav e come up, like ice tea, flavoured tea. Barista also takes a part of the consumer pie away. Does that affect your business? I think out-of-home, in any case, in India as a country, forget about the metros and big cities, is big business. If you look at our rural areas, the village tea shop is out-of-home. There is a pretty large volume of business which goes through these tea shops anyway. We have a working example of a rural Barista in India. So its nothing new. Ice tea is a new segment but its really on the borderline of whether its tea or a fruit juice or a soft drink were really getting into beverages there, a wider capital base... its more of a fun beverage. Would you look at beverages as a whole or would you restrict yourself to tea? Our company has a predominant focus on tea. We will stick to tea, for the medium term at least. I dont see us branching into all sorts of beverages. You havent launched ice tea this summer. Why is that? No, we havent. Basically it is a product where we have to watch and wait. If we want to do it in a big way, itll be the first mover in its market. Weve seen, nearly three-four years ago, the first launch of ice tea failed miserably. We want to see the experience and we could come in at any time. We have been dealing with instant tea and ice tea for God knows how many years as exporters. In the mid-80s we started exporting to the US. So we have the product ready. What brand? If we launch it in India, it will be under the Tetley brand associating it with a brand thats not really associated with conventional tea in India depends on how the market shapes. Where would you say your strength lies in the supply chain? It starts from the plantations. With having your own plantations you can produce the core requirement of high quality teas. All teas are not easily substitutable with other options. You need basic high quality teas which go into your blends, and having your own plantation base gives you that

advantage. Technically, you could buy the stuff from auctions but you would never be able to differentiate your products unless you control the core blend. So thats value addition in the plantations. The next point is where value additions come in blending, and the quality of the blends you produce. We have some of the finest blenders. Weve also learnt a lot through the Tetley acquisition, some of their blending techniques, because one of the things you have to do is use a very consistent blend right through. In India, there is a marked seasonality. You get certain teas in the north only in certain months and in winter you have no teas at all. You have to hold stock, and when you hold stock the tea does deteriorate in quality, so you have to adopt the fine art of getting a consistent blend every time. The consumer very often will buy a pack and say this doesnt taste like the last one and that is something that you cannot afford. You will lose a customer. So consistency in your blend, maintaining a certain quality and standard is an art. Thats where, I think, our greatest strength lies. Our distribution is very large. We have a very large reach through stockists and distributors and retailers which we service. That, again, is a great strength. And we dont have high cost of sales because we dont use a very large field force.

May 30, 2002 | Free Press Journal

Tata Tea launches Agni Dust


Tata Tea on Wednesday announced the launch of Agni Dust, the "Asli Kadak Chai", in a new avatar with reformulated taste and strength especially blended for the Maharashtra market, reports PTI. "Maharashtra is an important market for tata tea with a sizeable customer base. Hence we deemed it necessary to undertake an extensive research and development process to create quality offering to meet the requirement of the consumers in Maharashtra," company general manager Pankaj Dant said in a release here on Wednesday. July 22, 2002 | The Economic Times

Make Indian tea competitive


This year has been a bad one for most tea gardens with price realisations averaging lower than costs of production. So what does that mean for the bottom lines of the bigger players in the Indian tea industry and how can they cope with it? Shalini Singh interviewed Homi Khusrokhan, managing director, Tata Tea to find out. Given the low price realisations this year, could Tata Tea go into the red? The results have come out and the third quarter has ended with an increase in net profit at Rs 20.67 crore as against Rs 16.45 crore last quarter. Tata Tea has been relatively insulated from the severe problems plaguing the Indian tea industry because the Tetley acquisition took it into the international arena, which means its growth is no longer dependent on the domestic market alone. While average auction realisations have been low, better quality teas are holding their prices and Tata Tea has done better than industry averages because of quality improvements started two years ago. The company has also undertaken measures to reduce costs, divest non-core businesses, improve working capital management and enhance the number and variety of brand offerings. This has enabled us to outperform both plantation industry competitors and our benchmark FMCG competitors, in certain key industry metrics. The question of "going into

the red" does not arise. India has laws like the Plantation Act of 1947 that mean very high costs of tea labour. These make Indian tea costlier compared to overseas varieties. Will Tata Tea lobby with the government to raise some of these restrictions? Plantation operations will have to be made more efficient. This could be a combination of cost containment measures and productivity improvements. As responsible industry leaders, we have and will continue to encourage the adoption of measures that ensure the long-term health of the tea industry, irrespective of current obstacles. It is high time the government reduced the burden of levies like the Rs 2/kg excise duty and generally lowered other taxes, some of which are at the state level. The need of the hour is to make the Indian tea industry globally competitive and this cannot happen if the industry has no money to invest in promoting its teas internationally. To what extent does branding tea boost margins? Is branching out into derivatives like flavoured bottled tea or launching Tetleys herbal teas here a viable option? But for strong and powerful brands, Tata Tea would still be a plantation company. The brand "Tata Tea" is still Indias number one tea brand. Brand values tend to aggregate and grow as brand equity develops. These then flow through to the bottom line, providing operating costs are maintained at competitive levels. The successful management of growth of brand values encompasses providing a range of offerings in a market as diverse as India. The prioritisation of offerings will depend on the readiness of the market to assimilate products such as RTD teas and fruit and herbals. Is positioning tea as a health drink paying off? Can we expect new brand launches in the herbal tea segment? Yes, in all traditional western markets like Britain, USA, Canada and Western Europe, declining growth rates of tea consumption have been reversed to some extent and there is evidence that health and well-being are driving consumption. Tata Tea would be the last company to miss out on a market opportunity and herbal teas is no exception. Is the future of Indian tea going to depend on the government protecting the market through high tariffs? I think most sectors of the economy have realised the futility of waiting for governments to encourage or discourage private enterprise. The future of the tea industry is in its own hands. Only globally competitive players or niche value providers will survive. What should go is the senseless levy of multiple tariffs in the form of green leaf cess, high levels of taxation, excise and other burdens imposed on the tea industry, together with outdated legislation like the plantation labour acts which require to be rolled back. September 04, 2002 | Business Standard

Tata Tea leads quality campaign in South India


PT Siganporia, deputy managing director of Tata Tea, the worlds largest integrated tea group, swears by the FMCG maxim that its lot easier to

regain a customer who moved away than creating a new one. He has to be a believer for Tata Tea harvests nearly 29 million kg of the beverage at its estates in Kerala and Tamil Nadu out of its total all-India production of about 54 million kg. There are a number of consumer pockets here and abroad where south Indian teas were replaced by teas of other origins. Auction houses, where the final judgement on quality on lines of teas is passed, will, however, confirm that Tata Tea initiative to improve the standards of its south Indian beverage are yielding good results as reflected in the progressive improvement of auction rankings and higher unit value realisation. Tata Tea, as industry officials acknowledge, leads the quality campaign in south India, which saw a marked decline in standards of tea since 1980s. Tata Tea says its south Indian teas "command a distinct price premium in the auction room." While the claim is not disputed, it should be seen against the fact that the average auction price of south Indian teas in the first half of 2002 fell 12.88 per cent to Rs.42.13 a kg. Some lines sold at less than Rs.37 a kg, which is significantly below the production cost. According to analysts, Tata Tea is not representative of this plantation industry in the south. It has resources to fall back upon derived from its operation in Assam, where it grows nearly 21 million kg. The same, however, cannot be said about the companys tea manufacture in Dooars, the centre too having fallen on bad times. The surplus, albeit falling, has enabled Tata Tea to lift the quality of its south Indian teas "close to the top from below average to average" through the employment of best agronomic practices. Equally importantly, the company has developed systems to "continuously track customer satisfaction." At this point, Mr. Siganporia can rightly claim that Tata Tea has succeeded in "locating different customer groups for a substantial segment of its south Indian production." Tea growing conditions in south India and Sri Lanka are somewhat identical. But while Sri Lanka continues to make phenomenal progress in exports - its sales in the world market grew 2.1 per cent last year to a record 294.5 million kg, including imports for re-export after value addition the Indian export fall remains

unchecked. In the first half of this year, Indian tea exports were down 2.3 million kg to 74.1 million kg.

September 17, 2002 | Telegraph

Tata Tea spotlight on brands


All the eight resolutions moved at the 39th annual general meeting of Tata Tea Limited, including adoption of profit and loss account for the year 2001-02, were put to vote today by chairman Ratan Tata following a demand made by few shareholders. Apart from the adoption of accounts, resolutions pertaining to payment of dividend, reappointment of Ratan Tata, Y H Malegam, K Pringle as directors and V Venkiteswaran as wholetime director and that of appointment of auditors too were put to vote. Earlier, addressing the shareholders of the company Ratan Tata said that the company would soon launch or relaunch a few branded teas. "We continue to focus on establishing our brands and will launch some flavoured and herbal teas soon." The company, which witnessed a decline of 1.4 per cent in its market share last fiscal due to over six per cent dip in the packet tea market, was confident that with brand value coming up there would be some improvement in the market share. "The value of the brand is uppermost in our mind," he said. To regain the export market, Tata said focus would be on five to six new markets, including Kazakhistan, UAE and others in West Asia this year. Tata Tea has made a firm commitment to the commerce ministry that they will export 15 per cent more this year compared to previous year. "We are aligning with the Tea Board Strategy and to export more we have to concentrate on orthodox varieties. We expect that exports will be at least 15 per cent more than what it was last year," he added. Earlier, Tata said the tea scenario in the country in 2002-03 looked as tough as in 2001-02 due to falling prices and increasing production. The company, he said, was planning to establish plantation marks to sell loose tea under a brand name. Lower production in the first half of the current year by about 32 million kg might bring some firmness in prices, he said. Despite the adversities, Tata said, the company paid much higher dividend of 70 per cent compared to other companies in the business. Later talking to newspersons H. R. Khusrokhan, managing director of the company, said that they have decided to come up with flavoured teas and herbal teas in the coming days. The company had offered a voluntary retirement scheme to its 3,500 employees including managerial staff across the country. About 12 per cent of these 3,500 people have accepted the VRS.

September 17, 2002 | The Financial Express

Tata Tea outlines new brand promo, export thrust

Tata Tea Ltd has outlined an innovative brand promotion strategy under which the company will focus more on promoting packet tea rather than loose tea, according to the Tata Tea chairman, Ratan Tata. "We have decided to shift our focus from loose tea to packet tea," Mr Tata told shareholders at their 39th annual general meeting here on Monday. He said that the Tata Tea management will focus on developing and promoting a number of brands. "The focus will be more on establishing new brands," Mr Tata said. Later, Tata Teas deputy managing director, PT Siganporia, said the management intends to launch two to three new brands every year. He said the company has set an ambitious target of increasing its exports by around 15 per cent during the current financial year. "We have identified a couple of new export markets and signs are there that we will be able to surpass our target for the fiscal," Mr Siganporia said. Earlier, Mr Tata had said that the tea industry is going through a difficult period. However, there had been a marginal increase in production during the current financial year. He admitted that Tata Tea is yet to get any returns from its acquisition of the Tetley brand, on which it invested Rs 500 crore. However, the Tetley brand is performing well and Tata Tea expects hefty returns within a short period. Admitting that the general decline in the Indian tea industry has slightly affected the trade margin of Tata Tea, Mr Tata said that decline has been lesser than that of the competitors. Replying to shareholders, Mr Tata said the management has no intention of increasing its stake in the Barista Cafe chain. "Tata Tea is currently holding 34 per cent in the chain and we are happy with it," he said. Comm-enting on the shifting of the research & development division from Kolkata to Bangalore, the Tata Tea chairman said that this was done to centralise the R&D operations for both tea and coffee. "In fact, this shifting will help us in optimising our R&D operations," he said. The managing director, HR Khusrokhan, told reporters later that there had been a decline in the market share of Tata Tea during the financial year 2001-02. "However, there have been signs of recovery during the fist few months of 2002-03," he said. He also said that the Tata Tea management increased the production of orthodox tea to 3 million kg during the current year. Mr Khusrokhan said the company expects to reduce the numbers of its non-plantation workers by around 12 per cent via the voluntary retirement scheme floated recently. "The total VRS outgo is expected to be around Rs 25 crore," he said. Tata Tea has around 3,500 non plantation workers.

November 13, 2002 | Business Standard

Tata Tea brews a fresh brand to corner big pie


Tata Tea, the countrys largest integrated tea company, has relaunched its flagship brand Tata Tea with an emphasis on the quality of the tea, packaging and communication.

The unorganised sector has fragmented and commoditised the entire tea market by con tinuous price-cutting measures. But we want to buck this trend and hence this is the right time for our brand to reposition itself, Percy Siganporia, deputy managing director of Tata Tea, said. He said the brand had lost a volume market share in the last two to three years and now, with its repositioning, Tata Tea hopes to take on the unorganised sector in the Indian tea market. Interestingly, in order to capture a significant market share in Mumbai and the Maharashtra region, Tata Tea has revised its prices downwards for Tata Tea with the 250 gm pack now available for Rs 46 instead of the earlier Rs 49 and the 500 gm pack for Rs 90 (Rs 96 previously). Siganporia said the company offered regional blends and tastes across the nation. The company aims to increase the market share of Tata Tea by one per cent during the next 12 months to inch towards a 7.7 per cent share in the branded tea segment of the country. As per ORG-Marg figures for September 2002, our current market share is 6.7 per cent in terms of volume and, after the repositioning of the Tata Tea brand, we aim to surge forward by 0.5 per cent each in the coming two six-monthly cycles, Siganporia added. HLLs Red Label has a market share of 6 per cent, while Taaza has a share of 6.3 per cent. Tata Tea has three research and development centres located in Assam, Munnar and Bangalore. Tata Tea has five tea brands along with their regional variants. It has 55 tea estates producing 60 million kg of tea.

November 23, 2002 | Telegraph

Tata Tea plans brand revamp


Faced with competition from regional players, Tata Tea Limited (TTL) has initiated an exercise to relaunch all its brands so as to increase its market share by at least 3 percent in the packet tea segment. The company today relaunched its flagship Tata Tea Premium brand, which was first launched in 1987. Tata Tea currently enjoys a 17.2 per cent market share of the packet tea segment. Tata Tea Premium alone controls 6.7 per cent market share in its category of teas. The company has also come up with a new promotional campaign for its Tata Tea Premium brand. Addressing a press conference, general manager marketing Pankaj Dant said, Emergence of local players in the packet tea market has resulted in a significant value loss for big packet tea manufacturers. It has also resulted in fragmentation of the market, as there are at least 300 local players. TTL has worked out a marketing strategy to tide over this problem. We are placing renewed emphasis on quality upgradation to deliver an even better cup of tea and improve our packaging, Dant said. The companys research and development facilities at Assam and Kerala have undertaken extensive research programmes that focus on agronomy, botany, plant nutrition, tissue culture and biotechnology, irrigation and water management and others. The company has also developed six clones at its R&D facilities.

Dant said the company is already exporting tea under the Tata Tea Premium brand name in West Asia. We are currently exploring export opportunities to other countries also, he added. The company is also exploring to sell teas in other forms like ready-to-drink and tea bags. It also plans to sell organic tea. The company initiated its relaunch programme a few months ago with its Kanan Devan brand that is popular throughout south India. The company sells seven million kgs of tea under the Kanan Devan brand. Apart from Kanan Devan and Tata Tea Premium, the company has five more brands within its foldAgni, Gemini, Chakra Gold, Tetley and Agni Sholay. With 55 tea estates in the country and an area of 26,500 hectares under cultivation, Tata Tea produces over 60 million kgs of tea. The company has 11 packaging units all over the country. It also produces instant tea for the export markets.

December 02, 2002 | The Economic Times

New launches to add flavour to Tata Tea


After relaunch of its flagship brand Tata Tea with new packaging and advertising, Tata Tea (TTL) is contemplating to offer a slew of new products within the next 12 months to the tea connoisseur in the form of new fancy brews including flavoured tea, ready-to-drink tea and instant tea, with a view to give the consumer a global tea experience. Besides, the company is also toying with the idea of opening tea bars somewhat akin to the coffee bars now dotting major metros in the country like Barista and Cafe Coffee Day. Driven by its garden to the cup concept, TTL's flagship brand Tata Tea being the largest packet tea brand in the country with 6.7% market share is contemplating a 20% growth in its market share during the current fiscal. Likewise, TTL which has six brands under its fold Tata Tea, Tetley, Agni, Kanan Devan, Gemini and Chakra Gold together commanding a market share of 17.2% also hopes to raise this by 20% during 2002-03. Talking to ET here today, Pankaj Dant, GM marketing, TTL, indicated that the company endeavours to offer to tea lovers ready to drink tea, either in powered form or in tetra packs/bottled form as a beverage. With its tea bags under the Tetley brand enjoying sales next only to the major player Taj Mahal, Tata Tea which took over Tetley in March 00 and deriving a 56% of the Tetley sales from the UK market therefore, as a strategy, feels this dependence must now fall. Hence, launching of Tetleys fancy brews are in the offing in the near future in the domestic market. The company is looking at certain variants of its existing brands and therefore, says Mr Dant, more of tea bags of our own brands will be launched. This may also include tea bags of its flagship brand Tata Tea, which has now been given a new packaging for a longer shelf life.

December 05, 2002 | The Financial Times

Tea producer seeks a stronger brew

Indias Tata bought Tetley to pursue global dominance. But first it must overcome cultural differences, writes Edna Fernandes When Indias Tata Tea took over Tetley of the UK in 2000 it pledged to cherish the flat-capped tea folk characters that over 28 years helped build the worlds second best-selling tea brand. The deal was a rare example of an Indian company taking over a British brand and the promise seemed to illustrate Tatas awareness that it needed to be sensitive to the potential cultural challenges of combining the two groups. But less than three years into the marriage, Tetley recently pensioned off the lovable tea folk. Tata wants to use the Tetley name to penetrate new global markets and oust Unilever, owner of the Lipton brand, as the worlds leading seller of tea - in bags and loose leaves. To do so, Tata decided, it would have to shed a working-class image in favour of a slick, modern campaign. Krishna Kumar, Tetley chairman and vice-chairman of Tata Tea (India), says the decision to get rid of the tea folk - Gaffer, Sidney, Clarence and Archie - was part of a strategy to turn Tetley into the cuppa of choice for the next generation. We wanted to get away from the old-fashioned tea folk and promote tea as a modern lifestyle choice which promotes good health, he says. The brands new ambassador, Trainspotting and Moulin Rouge actor Ewan McGregor, could not be more different from the northern English working-class figures he replaced. The decision to ditch Sidney for Ewan can be traced all the way to Tatas plantations in India. In the tea gardens of Munnar, in the mist-swathed foothills of Keralas mountains. Tata Tea estate manager I.D.S. Uppal laments the drop in prices at the local Cochin auction. The average price for locally produced tea is 53 rupees ($1) a kilo. The peak last year was 63 rupees, he says. This is one of the leanest periods weve ever gone through. Hopefully, a revival will come. Prices are suffering from a worldwide slump in demand for tea and a growing coffee-drinking culture, while new competition from tea-producing countries such as Indonesia, Vietnam and Sri Lanka has led to a fall in the price of the raw commodity. Assuming that prices remain under pressure, the best prospects for the tea industry lie in strong brands and international markets, rather than in Tatas traditional domain of selling loose tea to Indias chai-drinkers and sending part of its output to the tea-leaf auction houses. As a result, integrating Tetleys established brand into the Tata Tea empire and using it as a springboard into new markets is essential, says Mr. Kumar. The two companies currently operate as autonomous units with separate balance sheets. Tata bought Tetley in a highly leveraged deal. After the takeover, Tata ring-fenced the debt within Tetley, leaving it with a debt/equity ratio of 3:1. That has now been brought down to about 1.7:1 and Tata says once it has reached 1:1 the two companies will be ready to integrate their balance sheets and operations into a single operating company. With debt reduction already under way, the Tata and Tetley management have begun to hold regular meetings to devise common strategies on issues such as product development and new markets. Homi Khushrokhan, Tata Tea managing director, says the two management teams will meet in India in February to discuss the next push towards integration. The February summit will set out our road map to integrating both companies. Our common strategy is to use Tetley as the flagship brand internationally and Tata will remain key to India. Weve identified up to eight new markets for Tetley, including the Middle East and Russia, he says.

The legal merger of the two companies depends on getting the Tetley debt down to manageable levels - a debt/equity ratio of 1:1. That could be less than two years away. But in the meantime were creating a common culture and a virtual joint management structure. The debt level for Tetley is about pound 170m ($265m). Tatas debt is almost negligible, Mr. Khushrokhan says. Analysts say integration and debt reduction are the biggest challenges. Debt levels (in Tetley) remain very high and unless Tetley is able to generate the cash flow to repay the debt, the company will face trouble, says one Bombay-based analyst who follows Tata Tea. He adds that he rates the stock a buy, despite the challenges ahead. Tea prices are already at a five-year low and that is already factored into the share price. Plus if you strip out the debt, Tetleys underlying performance is very strong. Mr. Kumar says the joint supervisory board of both companies is currently working on a common vision that will be presented at a company summit in February. We have to leave behind the separate cultures of Tata and Tetley and move towards defining a single company. It is the first step towards a merger. Mr. Kumar adds that, after a difficult start, Tata and Tetley are beginning to gel. He points out that at the time of the takeover, Tata Tea was a third the size of its target. Cultural differences were also a big hurdle for an Indian company taking over a larger British group. Initially, culture was a huge issue and had to be handled very carefully. For example, Tata executives would complain about being kept waiting when visiting Tetleys UK head office reception centre, despite being the senior partners. Meanwhile, Tetley people would complain about being run by Tata which knew only about India and nothing about Western markets. It was like going through marriage counselling, says Mr. Kumar. But analysts argue that the best hope for the marriage lies in the simple fact that the two partners complement each other. Tatas domestic strength lies in India and tea production. Tetleys strength lies in a powerful international brand that can be pitched to new markets, as well as its expertise in blending and keeping track of new consumer trends such as ready -to-drink and herbal teas. If you look at the tea industry today, apart from a few high-quality grades of Assam tea, almost every other type and producer is losing money. The only people making money are those with strong brands. Says Mr. Kumar. This is the Tata-Tetley logic.

December 07, 2002 | The Financial Express

Tata Tea discovers multiple uses of tea


Equated with the green movement and good health, tea is fast becoming part of a lifestyle trend and with its entry into perfumes and other lifestyle products, Tata Tea Ltd is recognising the need to focus on the longevity of tea as a product. Stating that the face of tea was changing from milk, sugar, green, black or flavoured to products such as beverages with tea ingredients, anti-oxident pills, perfumes and other such products, Tata Tea deputy managing director PT Siganporia, said, people were now associating tea with being part of a green movement towards good health. Those of us who can see the shift in it, realise that the raw material can only come from a plantation. Thats how I believe that there is a longevity to the industry. Few people realise this, because the short term bizzare disaster scenario scares them, he said, referring to the companys vast plantation holdings. Tea, since the discovery of its health properties, has been used internationally in perfumes such as Elizabeth Ardens Green Tea, household fragrances, beverages with derivatives from tea,

medications etc. Tea globally has been recognised as a relaxant with anti-oxidant properties and is fast becoming a global new age drink. Stating that the company did not believe into rushing into any new trend, but was definitely recognising the new direction the commodity was taking. There is no point being the fastest and the first. You have to be effective and effective means you have to be at the right place at the right time, he added. The company is also biding its time to introduce its Ice Tea formulation, stating that the market needed to be ready for the same and that timing of the launch was of the essence. Mr Siganporia said that he could not comment on the launch date, but every initiative was being prioritised within the company. I wouldnt say the Indian market in its holistic sense is not ready for Ice Tea, there is a niche market clamouring for it. But, is there enough market in the niche is what operators have to determine, he added. Not wishing to rush into the launch of a new category product, he commented, There is a niche market for ice tea, there is a definite way of tapping into it and there is a means of catering to that niche market which would make economic sense. However if they set their sights on the wrong target in the large humanity that composes the Indian market, then they may get the equation a little wrong. Stating that the retail market was cluttered with new brands from different companies across the country, Mr Siganporia said that retail market was more an arena ripe for consolidation rather than deccipation.

December 23, 2002 | Midday

Tata Tea reasserts No. 1 status


The country's largest selling branded tea Tata Tea - is gearing up to take its number one position in the market to greater heights. The new initiative from the world's largest integrated tea company involves renewed emphasis on the quality of the tea, the packaging and a complete revamp of the brand communication. The tea in a Tata Tea packet is from the company's own gardens - providing better and consistent quality. It reflects the tremendous amount of research invested by Tata Tea in understanding consumer preferences on the one hand and growing top quality product on the other. Tata Tea is a 'natural' blend, in that it captures the vigour and strength of upper Assam teas, thick and flavoury strains from gardens in Jorhat / Golaghat and the brightness and briskness of North Bank teas. "A brand cannot occupy the number one position for so many years without something being exceptional about it. People who have discovered its unique taste have given this brand the edge it has over others in terms of consumer loyalty," says Homi Khusrokhan, Managing Director of Tata Tea Ltd. He attributes the great taste to the selective plucking of quality leaves nurtured expertly in Tata Tea's own plantations.

January 21, 2003 | Business Standard

How Tata Tea reasserts its No. 1 status


Over the years Tata Tea has come to stand for trust coupled with a strong and credible plantation tradition. This mega brand typifies the beliefs and commitments of the company and the meganess of its 'bush to cup' vision. It sends out the message that the tea in a Tata Tea packet is from the company's own gardens providing better and consistent quality. It reflects the tremendous amount of research invested by Tata Tea in understanding consumer preference on one hand and growing top quality product on the other. Tata Tea is a 'natural' blend, in that it captures the vigour and strength of upper Assam teas, thick and flavoury strains from gardens in Jorhat /Golaghat and the brightness and briskness

of North Bank teas. This is the core strength of the brand and has made Tata Tea India's largest selling branded packet tea. "A brand cannot occupy the number one position for so many years without something being exceptional about it. People who have discovered its unique taste Tata Tea's great taste, have given this brand the edge it has over others in terms of consumer loyalty," says Homi Khusrokhan, managing director of Tata Tea Ltd. He attributes the great taste to the selective plucking of quality leaves nurtured expertly in Tata Tea's own plantations. What Makes Tata Tea Number One "Tata Tea's leadership position is the result of years of complete control over the entire 'bush to cup' process. Constant consumer and customer feedback traking, has enabled us refine our manufacture, selection and blending processes to ensure we maintain a competitive edge in satisfying their evolving taste preference across markets. This is instrumental in establishing Tata Tea as the No. 1 brand in the Indian tea market," said Percy Siganporia, deputy managing director, Tata Tea. The brand enjoys strongest mindshare among tea labels (2001 ET-ORG survey) and has the highest penetration in various markets (2001 IRS survey). It is therefore the nation's first choice in every sense of the phrase. The Communication Cascade Talking about the new communication campaign, Vivek Mathur, Tata Tea's vice-president (marketing), said, "The recent revamp in the brand's communication has been enthusiastically received and is working well in establishing the meganess of the brand. The advertising seeks to bring out the width and depth of the Indian consumer's relationship with the taste of Tata Tea. The new communication endeavours to define and add meaning to the company's 'bush to cup' vision. It emphasises on the detailing and the R&D efforts to ensure the finest quality by portraying vibrant, youthful and modern user imagery. While it cues upper middle class personality to build stronger aspirational values, it still retains an essence which is relatable by the cross-section of its varied-users. Customer Focus Tata Tea delivers a great cup of tea at a reasonable price to millions of consumers across the nation. Its top quality gardens span the length and breadth of Assam and North Bengal and cut across agro-climatic zones. This enables the company to create a superb tea blend, consistent at the core but customised to different geographical taste preferences. Tata Tea's general manager (marketing), Pankaj Dant said, Tata Tea takes care of the diversity of the Indian market in terms of taste. The brand is available in different regional blends, at appropriate price points, to satisfy consumers in each market. "As the nation's most preferred choice in branded tea we cater to regional preferences in taste and give our customers in all parts of the country, the exact taste that he wants in his cup of tea," he said. Ongoing Process ... To further strengthen the Tata Tea platform, the packaging construct has been significantly upgraded for better barrier properties. This keeps the tea fresh for a longer period of time. The package graphics have been modernised and up-dated to relate better to the

contemporary consumer. Pertinently, Tata Tea revolutionised branded tea retailing in India by offering the country's first poly-packed tea in the mid-eighties. The consistency in the taste of the tea is a result of continuous improvement in the company's plantation operations, blending and packaging processes that ensure delivery of consistent customer specific formulations in the blend. Improved packaging with enhanced barrier properties ensure that the product formulation is then delivered in pristine condition, to consumers. Tata Tea's continued focus on consumer feedback allied to its research and development at its three R&D centers in Assam, Munnar and Bangalore, leading to the delivery 'customer specific quality production' will ensure the company will consolidate and strengthen its leadership in the future. March 18, 2003 | The Financial Express

New brew: Tata Tea planning product, marketing revamp


To gain a competitive edge over rival brands in the Rs 4,000-crore Indian branded tea industry, Tata Tea Ltd is chalking out a new gameplan which includes marketing initiatives, product innovations, thematic advertising, online advertising plans and below-the-line activities. On the companys new initiatives, says Tata Tea Ltd vice-president (marketing) Vivek Mathur: "We are looking at innovations both in terms of marketing mix and product innovations. We are currently testing these innovations with consumers. Our focus is clearly on the brands theme advertising in an attempt to strongly establish the brand proposition." The company carried out its consumer research programmes with three leading research firms namely ORG-Marg, IMRB and NFL-MBO. In addition, Tata Tea also plans to focus on online adverting plans to promote its premium tea brand Tata Tetley this year. "We plan to promote Tetley on the Net because its still a niche medium in India," says Mr Mathur. As part of its strategy, the company is also looking at marketing tie-ups with major retail chains across the country. According Mr Mathur, the company has tied up with a few southern retail majors to promote Tata Tetley a few months back. "Also, we had tied up with Sony Music to promote our Tetley brand. Our focus will also be on below-the-line activities to promote our brands in major metros. We will be looking at tactical advertising as part of our marketing strategy too," he adds. As for the companys foray into the iced tea segment, Mr Mathur says the company is evaluating viable opportunities for this category in India: "People still opt for hot tea in this country. We are looking at adding regional flavours in our hot tea product portfolio," he adds. At present, Tata Teas products are handled by five advertising agencies which include, Rediffusion (Tetley), McCann Erickson (Chakra Gold), Publicis Zen (Agni/Kanan Devan), Vaishnavi (Tata Tea) and Saatchi & Saatchi (Gemini). "Many of these agencies have had a long association with the brand, which reflects on a better understanding of the brands communication needs," comments Mr Mathur. As for the companys adspend, Mr Mathur informs that Tata Tea has plans to increase its ad budget by 20 per cent this year compared to last year. With the entry of Godrej tea, competition is hotting up in the Indian industry. So, whats going to be Tata Teas marketing strategy this year? Primarily, Tata Teas marketing strategy is to offer choice to the consumer by having a portfolio of brands in every important segment of the market, replies Mr Mathur.

"Through our range of brands we straddle the premium, popular as well as the economy segments of both the CTC leaf and CTC dust market. And the pillars of our strategy are consumer focus, brandbuilding and product customisation," he adds. The company believes in investing behind long-term brand-building for sustained growth. "While we would have below-the-line spending on trade and consumer promotional activities to counter competition, when necessary, our focus on above-the-line would be significantly higher than other players," says Mr Mathur.

March 20, 2003 | Business Standard

Award for Tata Tea


Tata Tea has been adjudged the runner up for the Mother Teresa Corporate Citizen Award 2002 for its outstanding social responsibility. The contest is instituted by Loyola Institute of Business Administration (LIBA) to showcase a corporate that rendered services to the socially weak and disadvantaged sections of the society. The winner of this contest was Shriram Investments Ltd. A senior Tata Tea official received the award at a function held on March 17 at the LIBA premises. March 27, 2003 | The Asian Age

Tea and more: Tatas set for challenge


Tata Tea Ltd has decided to diversify its business activities to tackle the emerging challenges faced by Indian tea producers. Tea barons in India had warned that the survival of their industry is threatened by plunging auction prices, a slump in export and falling quality. Mr V. Venkiteswaran, executive director, Tata Tea Ltd said: "Though there are signs of revival in the tea industry by the middle of the current financial year, we are in the process of taking effective steps to face threats which are likely to emerge in the near future." Planting medicinal plants with high export value, foraying into the organic tea market, launching iced tea carrying out cost reduction exercises will be the major steps that the company will take, Mr Venkiteswaran said. Mr P. Haridas, deputy general manager, research and development, Tata Tea said that there is a good potential for medicinal plants in the domestic as well as international market. "We have already started planting Vetiver grass, a medicinal plant with high export value and initiated talks with various ayurvedic drug producers like Kottakkal Aryavaidyasala in Kerala to supply medicinal plants for the production of drugs." A kilogram of Vetiver grass is priced between Rs 7,000 to Rs 9,000 in the international market. Tata Tea officials said that with a view to improve the quality of the tea a major production restructuring initiative has been undertaken at its south India plantations. The company has identified production techniques which have enabled it to manufacture high quality tea equivalent to the Sri Lankan crop in its south India plantations. The products from the South will now earn significantly higher realisations. The company has started producing Assam like superior quality tea in the South, which is being exported to Tetley for use in its brands, the officials said. Mr Venkiteswaran added that the company is also exploring possibilities to export organic tea to the Europe and US markets where the demand is comparatively high compared to other world markets. Currently, out of the total 60 million tonnes annual tea production of Tata Tea, 50 per cent comes from South Indian plantation firm.

March 27, 2003 | Telegraph

Medicinal plants add new flavour to Tata Tea

Munnar: Tata Tea has decided to diversify into the business of growing medicinal plants in a bid to
shore up its bottomline. Executive director V. Venkiteswaran said: "We have decided to take this up as another line of business. The medicinal plants will be grown at our south Indian gardens and sold to ayurvedic institutions and pharmaceutical companies. Some of these firms have already shown some interest. We can develop it into a big business in future." The company is in talks with Kottakal Arya Vaidsala, a famous ayurvedic institute, to sell its products. The company can grow about 70 different kinds of medicinal plants at its south Indian gardens. "We are already producing these varieties on a small scale. But we plan to start production on a commercial scale," he added. About 15 years ago, the company used to grow medicinal plants for heart diseases that were sold to Wyeth Laboratories, Venkitswaran said. "The company, however, did not pursue this line of business. But now we have decided to develop this area as it could earn some revenue for the company," he said. With margins under pressure, the company has also firmed up plans to produce larger volumes of organic tea for export to European countries and the US. Iced tea from Tetley Tata Tea will launch iced tea under the Tetley brand in another six months to take on Hindustan Lever, which has already entered the iced tea market. "The work has already begun. We are testing the products in Bangalore. We will soon appoint a marketing research company to do a test marketing exercise," Venkiteswaran said.

April 18, 2003 | Business Standard

Tata Tea open to local brand buyouts


Kolkata: Tata Tea is open to acquiring brands
in select markets, as part of its growth strategy, Homi R Khusrokhan, managing director, said. Khusrokhan explained that, typically, in any market there is one established dominant global brand and some other domestic players, which were also fairly established. Tata Tea will look at picking up domestic brands, if it fits the companys portfolio. The company plans to adopt a mix of strategies for new markets. While Tetley will be pushed in some markets such as developing countries, in other markets, growth will come through acquisition of brands. Tetley, it may be mentioned, is eyeing emerging markets such as Bangladesh, Russia, Kazakhstan and in west Asia. In some of the markets where the brands are

already present, the group will look at launching tea variants. For instance, in India, Tetley will be launching four or five flavoured tea bags shortly. In the domestic market, Tetley apart, Tata Tea has brands such as Temptation, Agni, Chakra Gold, Tata Tea Premium, Kanan Devan and Gemini. Tata Tea is also exploring the possibility of introducing tea parlours in the domestic market. However, Khusrokhan clarified that even if the move fructified, it will not be a major revenue stream for the company, as in the lines of Barista, the popular nationwide coffee parlour chain in which Tata Coffee has a significant stake. The move will rather be aimed towards understanding the product better as well as better consumer insights. While the company is open to picking up brands as and when necessary, Tata Tea has no plans of a backward integration by acquiring more plantations. In fact, if the company found buyers it would exit some of the plantations. Khusrokhan said, "If we found buyers and if they could add more value to some of our gardens we would look at existing some plantations, but, selectively." With a production of 57 million kg, Tata Tea happens to be the largest tea company in the country. It has plantations in the north and south of India. South Indian gardens across the industry have been selling below cost of production for a while now. Khusrokhan said, the company is mulling to float a co-operative model for the green leaf side of the business. The other ways of coming out of this situation will be by improving quality and increasing productivity.

April 18, 2003 | Business Standard

'We need a model to raise tea consumption'


A shadow of gloom has stuck to the tea industry for the past few years. While some plantations have closed down, others are on the brink of closure. This year looks no better with a bumper crop looming large and uncertainty prevailing in key export markets. However, the pressure has not deterred Tata Tea, which made some aggressive launches over the last year, including the much-awaited Tetley brand.

On the operations front, the company not only embarked on a massive restructuring exercise but also introduced its maiden VRS. Homi R Khusrokhan, managing director, Tata Tea Ltd, spoke to Ishita Ayan Dutt and Pradeep Gooptu on these issues. Excerpts. The tea industry has been reeling under recession for the past few years. What are the problems facing the industry? And what is the remedy? The difficult phase in the tea industry will persist for two to three more years. Production cannot be absorbed by domestic demand and the industry has to rebuild its export base. This means that we have to build competitiveness, so that we can take on new entrants in the global market. We also need to make some internal changes. Production costs have to be fine-tuned and the quality of bought leaf has to be monitored closely. We have to learn to avoid the temptation for quantity. At the plantations, we would have to go in for mechanisation in the plucking and leaf handling stages. We have had excellent results with controlled shearing in some of our gardens. The bottomline is that the industry has to get out of substitutable, commodity type teas and focus on unique Indian varieties like Darjeeling and Assam that are our USPs. We have to protect these against cloning. Externally, we can only hope that some problems will get ironed out. Till such time as Iran lifts its ban on Indian tea, we have to fight an uphill battle in West Asia and CIS markets. New tea-drinking markets are not emerging so the focus on old drinkers has to continue. The fact that other producers are not trying to copy them in their plantations is a good sign. While African producers are sticking to producing of filler-type teas, its the Sri Lankan producers that we have to watch. The group has embarked on a massive restructuring exercise using a mix of business models. Is there any specific model that the company would adopt for all its operations? The Eaglescliffe plant in the UK has high-speed machines with phenomenal throughput ideally suited for huge brands. In contrast, the Indian plant, which has been strengthened with machines from an Australian plant, is ideal for producing brands of different types in smaller runs. The US and Canada operations are also unique; they are heavily dependent on outsourcing. The 4 million kg Canadian business is worth close to Rs 400 crore, yet it has only 11 people handling packets brought in from the UK. Everything else, like marketing, licensing and logistics, is outsourced. The second US plant has been sold under an arrangement with the buyer that Tetley would buy back a portion of the production under a payment-cum-royalty-sharing agreement for the brands. These are new business models that have to be absorbed and replicated to grow the business. Our resources are the uniqueness of Darjeeling and Assam varieties. Only a focus on quality can work. Bad teas injure the image of Indian tea overseas more than anything else. Indian industry vacated the orthodox space to Sri Lanka and this has to be set right by going for more orthodox and less CTC. By focusing on CTC, industry did a disservice to itself, because it restricted the customer base, restricted our export markets and led to overproduction in the domestic market. All said and done, tea continues to wear the staid image. What is the strategy that the industry and company would have to undertake to attract younger people? Tea has become a utility drink today. We have to recapture the romance of drinking tea and also create awareness of the health benefits that tea delivers. While the government, the Tea Board and industry have to work more closely, it is also clear that we need a model that will raise tea consumption and protect the market base.

Take the shift in consumer preference to cold beverages: the answer is within the industry itself, in the form of better iced teas. Perhaps we need to look at retailing models like Barista because it delivers invaluable inputs in understanding customer behaviour and in educating drinkers. But we should not look at the retailing model just from the economic angle, because start-up costs and long gestation periods of these businesses ensure that the bottomline is by no means rosy. The value of tea bars is in their delivery format through which variants can be tested and consumer tastes can be captured. There are two ways to come out of gloom cost reduction and improvement in pr oduction quality. Which path is Tata Tea adopting? As a member of the Tata group, Tata Tea has launched a campaign to be an EVA-positive company. We have implemented several changes and also revised the way we run the business to achieve this. For example, the concern at the plantation level was always on cost alone without regard for quality. This approach has been overhauled now we focus on the revenue benefits that come out of spending a little more to improve quality. The new drivers now are revenue and margins, with the underlying drivers being the cost of capital, agronomy practices and mechanisation. If we have to lower cost, we would buy some green leaf but not compromise on quality. The results are clearly visible in the prices that our teas have been fetching and even in the auction rooms the plantation marks translate into additional value. What has been the Tata Tea experience on the plantations front? Take our south Indian gardens. Gardens there are intrinsically not viable and several have been abandoned by owners. We have stuck on and are talking to workers, offering them management of the gardens with the assurance that we would buy back green leaf from them. It is at an early stage now and it is better than abandoning gardens or retiring them. Tata Tea would be selective and not aggressive about distancing itself from plantations. The acquisition of Tetley by Tata Tea was the largest leveraged buyout. Is there scope for further mergers and acquisitions (M&A) in the tea industry? Tea is different M&A in plantations do not add up because benefits dont work out. M&A delivers benefits only when it relates to brands and marketing, like our takeover of Tetley. In fact, building a brand or a marketing network companies do not require plantations. M&A deals are driven by returns and immediate benefits. Acquirers have to focus on the value chain and identify where it delivers the best returns. At this point of time, the best returns are in branding and marketing. At some point, if the production of tea worldwide were to drop, the best returns could be in the plantation link of the value chain, but it not so now. Even then, we have to mix strategies and not get focused on a single driver of strategy. As of today the focus is on retiring high-cost infrastructure, reducing costs and improving productivity.

June 27, 2003 | Business Standard

Tata Tea to split plantation, branded tea business New products under the premium tea category to carry Tetley tag
Tata Tea has decided to separate its plantation and branded tea business into two separate strategic business units.

The company said that while it is working on strategies to revive its ailing plantation business, its focus is on the packaging and branding side of the business, which account for around two-thirds of s the total revenue. Homi Khusrokhan, managing director of Tata Tea said: "Our plantation and branded tea business would now be treated as separate profit centres. We are laying further emphasis on cost reduction initiatives that would enable us to stay afloat under adverse market conditions. All fresh launches and innovations under the premium tea category would be done under the Tetley brand." The companys prime national brands are Tetley, Tata Tea and Agni, while its regional brands include Kanan Devan, Gemini and Chakra Gold. According to Khusrokhan, the tea business is facing rough weather with falling tea prices. Regional brands have dented the profitability of the company. With exports to Iraq affected by the war, the company is now focusing on exports to neighbouring countries like Pakistan and Bangladesh. Meanwhile, the company has managed to reduce the average cost of borrowing from 11 per cent to around 8 per cent by restructuring its debt basket. Tata Tea has replaced high cost debt to the tune of Rs 75 crore with fresh loans having a lower interest rate of 5.85 per cent. The total debt of the company stands at Rs 190 crore. Interest outgo for the year ended March 31, 2003, stood at Rs 14.4 crore, as against Rs 21.4 crore the previous fiscal. Company executives said around 490 employees had accepted the early separation scheme last fiscal. Currently, the total employee strength of the company is around 57,000, out of which around 56,000 are employed in the plantation business. Tata Tea posted a net profit of Rs 70.6 crore for the year ended March 2003, as compared with a net profit of Rs 71.9 crore the previous year.

September 03, 2003 | The Financial Express

Turnover of Tata's Tea brands tops Rs 2,900 crore


The combined global turnover of Tea brands by the Tata Tea group of companies, including the Tetley group, is now over Rs 2,900 crore. This was pointed out by the company in its latest annual report for 2002-03. This would mean the turnover of the groups global branded tea business now accounts for approximately 86 per cent of the consolidated turnover. This is significant as the company, as part of the broader group thinking, is transforming from a commodity operation to a worldwide consumer products company. This transformation has greatly strengthened Tata Teas growth and stability of its performance and profitability. During the last fiscal, the company managed to stabilise and grow the domestic branded tea operations. Tata Tea Premium, the flagship brand of the company, registered a growth of about five per cent in the second half of the year, reporting volumes similar to those in the previous year. Tetley tea bags,

which were introduced towards the end of last year, also received encouraging consumer response, the company said. Volumes of other tea brands, such as Chakra Gold and Gemini, were more or less at the previous years level, but in Kanan Devan and Agni the company had to accept some loss of volumes. The company said that necessary action has been taken to arrest the decline. The group also recorded improved market shares in the UK, Canada, France and Australia, as well as a 30 per cent increase in earnings before interest and tax. Tetley, which was acquired by Tata Tea, maintained strong marketing pressure in its principle markets, resulting in improved market share. During the last fiscal year, Tetley group restructured its operations in the US by selling its Private Label business, outsourcing its entire manufacturing operations to a joint venture company and formed another joint venture company to retain a presence in the food services sector.

September 14, 2003 | The Financial Express

Tata Tea to upgrade image of power brands


New Delhi: In a bid to fuel growth in its domestic tea operations, Tata Tea Ltd has identified Tata Tea, Agni and Tata Tetley as three power brands within its portfolio of six tea brands, Tata Tea vicepresident marketing Vivek Mathur told FE.
Towards that, the company has flagged off an exercise to strengthen and upgrade the image of its flagship brand Tata Tea with the launch of a new variant of Tata TeaTata Tea Gold, a blend of 85 per cent CTC and 15 per cent long leaf tea and a new advertising campaign that positions the brand as young, modern, spontaneous and vivacious. Tata Tea Gold will not only address a key segment but is also expected to play a positive role in upgrading the image of the flagship Tata Tea brand, Mr Mathur said. Priced at Rs 45 for 250 gm, Tata Tea Gold is slightly higher priced than Tata Tata Premium which is available at Rs 42.50 for 250 gm. According to Mr Mathur, tea as a category has lacked innovation and upgradation in recent years and hence has a very fuddy duddy image. Further, according to Tata Tea Ltd deputy managing director Percy Siganporia there has been a resurgence in big tea brands in an otherwise declining tea market. While small local regional brands have been losing out to store brands, big brands have stepped up , he said. The Tata Tea brand has been on an upswing ever since its relaunch last year, registering double digit growth rates in a declining packet tea market. Tata Tea Gold will help further strengthen the brands leadership position, Mr Mathur said. Tata Tea brand which has a volume market share of 7.4 per cent and value share of 8.4 per cent (as per ORG MARG retail audit) is hoping to achieve a value share of 10 per cent by next year. According to Mr Siganporia, the company has also arrested the decline on the volumes of other tea brands, such as Chakra Gold, Gemini, Kanan Devan and Agni where the market share has gone up from 2.2 per cent last year to 2.4 per cent. The combined global turnover of Tea brands by the Tata Tea group of companies, including the Tetley group, is over Rs 2,900 crore, as per the companys latest annual report for 2002-03. During the last fiscal, Tata Tea, the flagship brand of the company, registered a growth of about five per cent in the second half of the year.

January 12, 2004 | The Financial Express

Tata products abroad to sport A Tata Enterprise


All products marketed by the Tata group companies based abroad will carry the words A Tata Enterprise on product packs. In line with this, Tata Tetley, for the first time, will use A Tata Enterprise on its product packs. Tetley, being a different legal entity, would pay the licence fee in due course after meeting all the conditions of the licence agreement of the Tata group. This can be viewed as a step further towards the integration of the operations of Tata Tea and Tetley. The focus is on creating a global database and having a common system for both the entities. According to Tata Tea managing director Homi R Khusrokhan, It was decided recently that as part of creating a global awareness of the Tata name, all products marketed by the Tata companies outside India, which would include the Tetley Group, will hereafter, over the next year progressively, carry the words A Tata Enterprise on all packs. The move endorses what the Tata group chairman Ratan Tata stated in his New Year message to all group employees, that globalisation is an important new phase in the groups growth plans. As far as the restructuring initiatives of the manufacturing hubs of Tetley are concerned, Mr Khusrokhan said, The creation of global manufacturing hubs are an on-going process. However, these plans will not impact Tata Teas sites in India. In order to be a cost efficient player, Tetley plans to have a few manufacturing hubs around the world. However, these hubs may not be directly connected with their original markets. For example, Tetley, which has recently entered into two joint ventures one in Bangladesh and the other in Pakistan will help the company leverage on their manufacturing and distribution networks for serving its other markets. In Australia, it closed its manufacturing facility and is now sourcing its requirement from Tata Tetley Ltd, the joint venture company in Kochi. During 2002-03, Tetley restructured its operations in the US by selling its private label business, outsourcing its entire manufacturing operations to a joint venture company. It also set up another joint venture company to retain its presence in the food service sector. Further, on the road to globalisation, Tata Tea is eyeing certain overseas markets where it plans to introduce its brands through soft launches. These markets include the Middle East, the Gulf countries and the Far East. The Tetley group will continue to have a presence in most of the developed countries along with Russia, Bangladesh and Pakistan. March 12, 2004 | Business Standard

Tata Tea to overhaul brand strategy


Tata Tea is set to overhaul its brand management strategy, as part of the operational integration with Tetley.

Two years after Tata Tea decided to give the largest leverage buyout of its time, the Tetley acquisition, a shape by integrating the two companies operationally, the company was now readying to implement the result of the rigorous studies undertaken during the period. Percy Siganporia, deputy managing director of Tata Tea told Business Standard, that Tata Tea will integrate next fiscal. The company would inculcate the Tetley brand management process, which implied a dramatic change in brand proposition, agency brief and product formulation. There would be changes on multiple frontsbenchmark process, customisation and customer interaction. "All these would be unified under the composite operation", Siganporia said. Product formulation, for instance, would be more consumer insight driven.

April 02, 2004 | The Financial Express

Tata Tea rolls out new blend for west Asia


Kochi: Tata Tea has launched a special blend for West Asia. Riding on the success of yet another of its brand there, the company decided to launch its select-finest Assam premium tea in the UAE and other West Asian countries, according to company special adviser and Taj Hotels vice-president T Damu. He told mediapersons that the new blend of richer taste and unique flavour was picked from the best gardens of Assam, the worlds largest tea-growing region, which produced high quality teas. The company decided to have a blend stronger in liquor and richer in colour from the choicest tea leaves picked from the best gardens of Assam. The company, which made its presence in West Asia two years ago with its brand of Kannan Devan catering to the large Indian population there, had this time gone in for a blend stronger in liquor and richer in colour aimed at the Arab population in particular. It would be available in both bags and packets. The Kannan Devan brand had a market between 400-500 tonne a year in West Asia and the target fixed for the new blend was between 200 and 300 tonne in the first year, Mr Damu said. The company with its subsidiary Tetley Group Ltd had a presence in 47 countries and the total business was around $620 million, making it the second largest branded tea portfolio in the world. The company owned 55 estates in the country and produced around 60 million kg and 2 million kg of instant tea annually. It was already into production of 400 tonne of organic tea for which it had receivedcertification and would be exporting it in bulk to Europe and Japan. January 17, 2005 | The Asian Age

Tata's Tetley now in tea bags


Tata Tea has given a fresh look to Tetley with additional flavours to capture a larger slice of the market. The Tatas acquired Tetley in 2000 and introduced the brand in India in February 2002. Mr Percy T. Siganporia, managing director, Tata Tea said, "We have just redone Tetley in a very big way and have come out with Indianised flavours in tea bag formats." He said that the company has used a lot of consumer insight and development processes, including imported flavours. Positioned in the premium segment, Tetley has been launched in customised flavoured tea bags-lemon, masala and ginger and Earl Grey. Tetley has a market share of less than one per cent in value terms. a Mr Siganporia calls the relaunched Tetley as "Tetley the new expression of tea." Tea bags account for a small share of the 700 million kg tea market in India.

February 09, 2005 | The Asian Age

Tata Tea's stronger flavour


Tata Tea is one of the largest players in the branded tea business with an annual turnover (consolidated) of more than Rs 300 crores. It has posted an improved performance in Q3FY05 on the back of stringent cost control. This has resulted in a sharp improvement in operating margins and profits. The company has posted a 24.8 per cent growth in operating profit and a 43.3 per cent growth in profit after tax or PAT. Some of the key investee companies have posted an improvement in their profitability. This has resulted in the share of profit from associates turning around from a loss of Rs 6.22 crores to a profit of Rs 4.29 crores in Q2FY05. Industry scenario India is the largest producer of tea in the world, contributing to around 28 per cent of the global production and it is the largest consumer as well. Its share in export pegs at around 12.5 per cent, putting it at the fourth position in the export market. After a slow-down of three successive years, the tea industry has turned around with a rise in prices. Moreover, the export has grown on the opening up of new destinations. The rise in the Indian exports is mainly attributed to the import by EOU/EPZ/SEZ units. Valuation Tata Tea trades at an EV/EBIDT of 8.1x its consolidated trailing twelve months Q3FY05 EBIDT and at 1.4x EV/Sales. On both these parameters, it is the cheapest among the leading FMCG companies in India. Currently it is quoting at a P/E multiple of 10.6x its ttm December 04 quarter earnings. Risks Tea could become a low involvement category, leading to its com-moditisation.
y y

Regional and local brands pose a threat. There has been a negative market growth due to the reverse migration from branded packaged tea to loose and store-packed tea.

Growth
y y

It plans to focus on its major three brands to promote top-line growth. The company expects Tata Gold, its new offering, to do well.

On the consolidated front, Tetley could drive earnings growth, given its strong global presence and restructuring efforts.

March 01, 2005 | Businessworld

Tea sector needs addressed


Percy Siganporia Two major requests of the tea plantation industry have been addressed removal of additional excise duty at Re 1 per kg and thrust on incentives for replanting and rejuvenation. These measures would contribute towards reduction in cost of production and address the viability of the plantation operations. The decision to define a road map for agricultural diversification into fruit, flowers, dairy, fishery and so on will help in supplementing and increasing the returns of tea plantations. The agricultural diversification along with credit availability through micro financial institutions will provide a source of alternate income to the tea workers and reduce corporate social cost burden. The main enabler for growth of the branded tea business from this years Budget has been the implementation of the VAT rate of 4 per cent across all states. This is the one of the best news for the Tea Industry. The initiatives to promote agriculture, infrastructure and rural economy has a consequential lag impact of boosting demand for tea consumption. A combination of measures in the financial sector will improve rural entrepreneurship and will open up distribution and product placement opportunities. These will enable the FMCG operations to flourish for tea.

The finance ministers initiatives to raise the countrys tele-density from the current 8.75% and get over 66,000 villages wired to the world are welcome. The importance given to education is long overdue. The highest ever outlay on education, and the decision to create Rural Knowledge Centres, each of which will have at least one computer, will have far-reaching impact. The move towards public-private partnerships in the Skills Development Initiative for upgrading industrial training institutes is an exciting trend. The minister also desires to create institutions of great learning in India comparable to Oxford, Cambridge, Harvard and Stanford and he has chosen my alma mater, the Indian Institute of Science, Bangalore, as the pilot project. This recognises clearly the role of knowledge in todays world as world-class universities are critical for the country to leverage its pool of knowledge workers. Also, institutions like the IISc can well become a hub for cutting edge R&D. And, if the IT industry is to create 70 lakh more jobs by 2008, many more institutions will have to follow its path. The only area where the Budget has failed to push the envelope is to enhance the adoption of IT in the country, especially in the e-governance area, although some initiatives were taken last year. Adoption of IT in governance needs a fillip especially with the implementation of VAT, and to keep tabs on the development schemes announced. Further, while basic education has been emphasised, little has been done to integrate IT education with mainstream education a step

critical to ensure the steady supply of IT professionals in the country. Another significant proposal is the ministers announcement to make Mumbai a regional financial hub. Though to make it a regional financial nerve centre will mean renewed investment in the technology and communication aspects of FIs, and best global business and tax practices. The IT industry is well positioned to further strengthen FIs in terms of the latest technologies and practices. March 07, 2005 | Businessworld

A new makeup
The timing was perfect. As Sania Mirza sweated it out to win the WTA Title at Hyderabad, Tata Tea couldn't have asked for a better person to endorse it. The 18 year old tennis star had been recently signed on as the brand ambassador of the packaged tea company. Mirza is part of the Rs 783 crore Tata Tea's effort to contemporarise its largest selling brand, Tata Tea Premium. The brand was relaunched in January this year with the Taste Kamyaabi Ka (Taste of Success) baseline. The ad has Mirza struggling to concentrate. Disappointed, she chucks her racquet on the court, until her coach brings her that refreshing cup of tea, after which she goes on to win the match. This is the first time that sports has been used to advertise a tea brand. Says Tata Tea executive director Sangeeta Talwar: "We needed to represent ourselves in the youthful and contemporary platform. This is to reinforce the idea that it gives you the energy to succeed." So far, the company has been placing its Tetley brand as the young face of tea. According to the company, there was no immediate trigger to do a relaunch except the need to evolve the brand and make it more appealing to young consumers. Although market shares were steadily increasing, consumer surveys indicated the brand was perceived to be too mature and fuddy duddy for current times. The reasons are not hard to find. Since it's inception in 1985, Tata Tea Premium has been all about garden freshness, based on the claim that Tata owned its tea estates. In the nineties, the brand evolved to include the rejuvenation and the health benefit platform, but it still largely spoke about Asli Taazgi, and Perfect Taste. Other brands, meanwhile, had evolved to appeal to a wider spectrum of consumers, though retaining , the 'for the woman of the house to decide' feel. Tata Tea Premium, on the other hand, has remained what Talwar calls "a housewife brand". However, it competes with Red Label and Taaza, both seen as 'young' brands. These Hindustan Lever brands, along with some others are its greatest competitors. They have a combined volume share of 16 per cent against Tata Tea Premium's about 10 percent. Over the past six months since it introduced the Rs 10 pack, Brooke Bond Red Label, has been gaining ground. Therefore the need to rejig Tata Tea Premium. The company decided to look beyond propositions like 'perfect taste' and 'freshness' to include vitality and energy. In the new packaging, the usual cup of tea has been replaced by a mug of tea to appeal to the youthful and contemporary platform .Youth icons Sania Mirza and singer Sunidhi Chauhan have been roped in to endorse the product in different media. Will this alienate the core 'housewife' audience? According to Talwar, Tata Tea Premium remains a housewife's brand. But within that spectrum, the Mirza campaign is still an effort to

make it seem more contemporary and address more to the housewife of today. The focus is on the ability to succeed. Hence the line: Taste of Success. April 19, 2005 | The Asian Age

Tata Tea launches Agni at Rs120 per kg


Tata Tea is on a consolidation drive. The global tea major has added the Agni brand to its stable, marking its foray into the economy segment which comprises of tea in the range of Rs 120 145 per kg. The economy segment forms 60 per cent of the total tea leaf market of which the company has set a target to capture 10 per cent market share in value terms nationally in FY 05-06. The current market size for packaged tea in India is around 300 mn kg per annum. With the launch of Agni, Tata Tea will now have its presence across all the segments of tea leaf market in India. The company is entering the economy segment with a 10 per cent extra strong leaf. The other two brands of the company include "Premium" and "Gold." Mr Percy Siganporia, managing director, Tata Tea Ltd said, "Tata Tea has demonstrated a robust performance in its key markets, making significant gains in its market share and mind share. This initiative will allow us to provide a tighter focus to our brand building efforts and also enlarge opportunities for further reinforcing our equity. September 26, 2005 | Business Standard

Agni Dust launched


Tata Tea Ltd has entered the economy segment and made a major foray into the southern markets with the launch of 'Agni Dust'. The blend is available at Rs 30 for 250 grams and Rs 110 for one kg pack. May 10, 2006 | The Free Press Journal

Tata Tea to make 'Premium' a mega brand


Tata Tea, the single largest tea brand in the country, has set a target of making Tata Tea Premium a mega brand by the end of fiscal 2006-2007, reports UNI. As part of its strategy, the company has launched its latest advertising campaign featuring Sania Mirza for Tata Tea Premium. The advertisement campaign has been directed by renowned filmmaker Nagesh Kukonoor and the concept of the ad has been devised by advertising agency Dentsu Marcom. Tata Tea Premium's future roadmap is to leverage the brand's strength in geographical spread and the brand loyalty to further expand its market share, Ms. Sangeeta Talwar, Executive Director Marketing, Tata Tea said. May 22, 2006 | The Economic Times

Tata Tea to buy regional brands

Tata Tea, the largest branded tea company in the country, is firming up plans to acquire some regional brands to expand its presence in the domestic market. The company, which has made some successful acquisitions in the Czech Republic and USA, is also repositioning its popular Tata Tea Gold brand. The company has appointed the ad firm, Lowe, to come up with a new campaign for the Tata Tea Gold brand. The campaign, involving youngsters, will try to add 'futuristic' flavour to Tata Gold. The campaign will hit the market in July. The company has recently launched its flagship brand Tata Tea Premium with tennis sensation Sania Mirza as the brand ambassador. Talking to ET, Ms Sangeeta Talwar, executive director (marketing) said, "There are some strong regional tea brands in the Indian market. We may look at them if there is any opportunity. It's on our agenda. But there is no concrete plan as of now." There are a whole lot of regional brands like Society, Wagh Bakri, AVT, Lal Ghora, Kala Ghora and others in the Indian market. A recent survey says that some of the regional brands are doing extremely well in certain pockets of the country. Some of them are even doing much better than the national brands and in certain markets they have emerged as the lead brands. Elaborating the growth plans of its packet tea business, Ms Talwar said, "We also have plans to integrate our regional brands with the national brands. We are currently working on it." Tata Tea Premium, Tata Tea Gold, Tata Tea Agni, Tetley are some of the national brands from the Tata Tea stable. The regional brands are Kanan Devan, Gemini and Chakra. Nearly 86% of the company's revenue comes from the packet tea segment. The company's packet tea business is growing at a rate of 8% -10% as against a national average of 3%, Ms Talwar added. "In the last two years we have done extremely well in packet tea business," she said. Even though Tata Tea is present in all categories of tea, its presence in the Darjeeling tea is insignificant. The company is exploring possibilities to come up with Darjeeling tea in packet form. August 25, 2006 | Business Standard

Tata Tea: Quenching thirst


With the growth in tea market worldwide not anything to write home about, Tata Tea's testing of waters with a stake in Energy Brands Inc (EBI), which makes enhanced waters, couldn't have been better timed. The move is evidence of the company's intention to diversify into non-carbonated and non-alcoholic, ready-to-drink beverages which can only help grow the business at a faster pace and puts it into an altogether new league. The acquisition of 30 per cent stake in EBI together with Tata Sons will give it access to brands [like] the mother brand Glaceau and sub-brands in a fast growing segment. Moreover, the company will gain control over the distribution in 40 states of the US where EBI is the market leader. Of course, the option to sell Glaceau and other brands in markets where Tata Tea has distribution presence, is always available. In other words, Tata Tea will help manage the growth of Glaceau which hopes to grow at 70 per cent compounded annually, over three to five years, creating an enterprise value of $10 billion compared with $2.2 billion at present. In the last three years, Glaceau has grown at a CAGR of 200 per cent. At over six times trailing sales $355 million or at around three times current sales (CY06), the bill at $677 million is a tad expensive. Moreover, the interest burden will be heavy since the deal is to be funded by debt of around $400 million. Thus, it will take time for Tata Tea to digest the deal

and in the immediate term an earnings fall of around 15 per cent cannot be ruled out. However, the stock should get re-rated from here on, given its size, global presence and product mix. Traditionally, the stock has traded at an average P/E of around 12 times, which could move up to 15 times. The valuation at Rs 830 of 12 times FY08 expected earnings (prior to the acquisition) appears to be undemanding from a longer-term perspective. March 13, 2007 | The Hindu

Flavoured products from Tata Tea


With an aim to capture the top slot in the Rs 6,000 crore organised tea market in India, Tata Tea on Monday announced its foray into the health and wellness segment of tea by launching new flavoured products, 'Tata Tea Life'. Company executive director, Sangeeta Talwar, told media persons that the company's new product would not be positioned as a niche product but would be marketed as a mainstream one with an additional taste of herbs and spices known to provide overall health and wellness. "We have been achieving double-digit growth while the industry is growing only at 3.3 per cent. We aim to be the number one in the Indian market," Tata Tea managing director, P T Siganporia, said on the occasion of the launch. At present, the organised tea market in India is led by Hindustan Lever with about 19 per cent market share, closely followed by Tata Tea with 18 per cent. "We are not yet there but very close toby next year we should be able to be the number one," he said, adding that in the current fiscal, they were already significantly ahead of its target, but did not give out the figures. In the third quarter ended December 2006, the company reported profit after tax of Rs 94 crore against Rs 61 crore in the corresponding quarter in the previous year, up 54 per cent. Its total income during the quarter stood at Rs 299 crore against Rs 282 crore. June 05, 2007 | Financial Express

Tata Tea to launch range of Himalayan sub-brands


After acquiring the management control of Mount Everest Mineral Water Company, Tata Tea is planning to introduce a range of sub-brands of 'Himalayan' in the domestic market to start with. The company also plans to take its new acquisition to select global markets recognising the growing demand for mineral water across the globe. On the other hand, Coca-Cola India is evaluating the option of launching Glaceau's Energy Brands in India. Meanwhile, Parle Bisleri is increasing its manufacturing facilities to meet the

growing demand for its new launch 'Bisleri Natural Mountain Water', according to Ramesh Chauhan, chairman of Bisleri International. On the company's new initiatives, Sangeeta Talwar, executive director-marketing, Tata Tea said, "After our foray into the bottled water sector in India, we are planning to launch a range of value-added water which will be offered to consumers at different value points." July 30, 2007 | Hindustan Times

Tata Tea plans JV to boost India brand in Russia


Tata Tea is teaming up with Tata Coffee and a few other institutions to aggressively promote Indian tea brands in Russia. Russia has traditionally been one of the strongest markets for Indian teas and the move is aimed at regaining India's market share in Russia. Tata Tea managing director Percy Siganporia said that plans were still in a fluid state but confirmed such a proposal has been floated. "A new enterprise will be formed which will promote Indian tea brands in Russia," Siganporia said. He, however, did not divulge further details. Siganporia was speaking to reporters on Saturday at the Indian Tea Association's annual general meeting. Union minister of state for commerce Jairam Ramesh, who was also present in the ITA meeting, said that Russia is currently the second biggest importer of both tea and coffee from India. Russia accounted for 20 per cent of India's coffee exports during 2006-07, close behind Italy at 27 per cent. It imported 32 million kg of Indian tea of India's total export basket of 185 million kg. While Russia, Iraq and Pakistan have remained a stronghold for India's tea exports over the years, the union commerce ministry has identified new markets in Egypt and Iran. The ministry is keen to set up a tea marketing office in Cairo for which it has written to East India Hotels, which currently operates a luxury hotel in Cairo, seeking help. "We are hopeful that the tea marketing centre will be a reality soon," Ramesh said. Earlier, the ministry had planned to set up a similar centre at the Air-India office in Cairo but had to back out owing to objections from the landlord. October 01, 2007 | Business Standard

Tata Tea on rural thrust with Jaago Re


Tata Tea, one of the country's leading tea companies, has launched Jaago Re, a holistic 360degree advertisement campaign. The company plans to expand in smaller towns and villages through the campaign, which is created by advertisement agency Lowe Lintas. Percy Siganporia, managing director, Tata Tea, said, "The company wants to associate the campaign with social apathy and create awareness about the social problems in the country." The company executives claimed that Tata Tea is the largest volume player in the packed tea market, which is growing by 3-4 per cent. In June this year, Tata Tea has attained 19.2 per cent market share against 18.6 per cent that of its nearest competitor.

October 02, 2007 | The Hindu

Tata Tea to unify four brands


Tata Tea has announced that its four leading brands, Tata Tea Premium, Tata Tea Gold, Tata Tea Agni and Tata Tea Life, have now been brought together under one umbrella brand Tata Tea. According to a company statement, this consolidation and unification of the four brands is aimed at communicating to the consumers a single, unified message in terms of emotional connect. Jaago Re, a new campaign, will kick-start on October 1. It leverages the unique position that tea enjoys in Indian culture and attempts to project tea from being a physical and emotional revitaliser to becoming a catalyst for 'social awakening'. Tata Tea Premium, the flagship brand of the portfolio, is now the largest packet tea brand in India accounting for an all-India value share of 10.4 per cent. The brand dominates in the North, East and West geographies. Tata Tea Gold is recording double-digit growth and is already 20-per cent size of the flagship brand. Tata Tea Agni was launched in mid-2006 and has established its foothold in the economy segment of the market while Tata Tea Life, the latest introduction to the portfolio, is a mass market brand launched in the health and wellness platform. Our Kolkata Correspondent writes: Company officials in Kolkata told The Hindu that while TTL was now the largest branded tea company by volume, in value terms it was the second largest. The 450-million kg Indian branded tea market is valued at Rs4,000 crore. Speaking on the exercise, Percy Siganporia, managing director, said, "A key mission towards achieving leadership is to establish the Tata Tea market and thought leadership for branded tea in India." Sangeeta Talwar, executive director, said the campaign would motivate people to internalise the tea experience and externalise their social awakening." October 23, 2007 | The Economic Times

Tata Tea plans to launch rebranding campaign


In an attempt to woo back the growing breed of youngsters who are turning to coffee, Tata Tea is launching a nationwide 360 degree re-branding campaign. The campaign will focus on the demographically young crowd and also focus on a key social message. We are trying to show tea as a youth drink not just for people who are demographically young but also for people who aspire to remain young. The demographically young account for 40% of the population right now, said Sangeeta Talwar, executive director, marketing , Tata Tea.

Our last campaign with Sania Mirza brought about an emotional connect with the brand. We are moving one step forward and bringing in awareness of social causes. The brand is now wearing the mantle of social responsibility, she added. Apart from 10-second commercials across TV channels on social issues like water, responsibility of cops, role of politicians and women in sports, the company also plans to start a website. We are launching a website, www.jagoindia.org, that will allow young people to chat about social issues . Through this forum , they can discuss relevant social issues, she said. With the tagline, Har subah sirf utho math... Jago re, the company is also focussing on retail points, multiplexes and shopping malls to increase awareness. While it is a nationwide campaign , we are focussing on 8-10 cities with all our campaign, said Ms Talwar. While tea has 91% penetration in the country, in the case of coffee width of penetration has increased but not the depth, she added. November 16, 2007 | The Hindu

Tata Tea launches Tetley green tea leaf packet


Tata group company, Tata Tea, on Friday launched its Tetley green tea leaf in packet format. With the launch of Tetley green tea in leaf format, the company aims a wider consumer-base which currently use green tea leaf and prefers a leaf format as opposed to a tea bag, a press release issued here today stated. It also targets to offer an economic option for current regular green tea consumers as compared to a tea bag. The 125-gram box of Tetley green tea leaf will be available at MRP of Rs 50 which offers a price-point of Re 1 per cup for green tea consumers, the release said. Tata Tea had launched Tetley green tea in tea bags format in November 2006 and in regular and two delicately-flavoured variants - green tea with lemon and honey and green tea with ginger, mint and lemon. The company's Executive Director, Sales & Marketing, Sangeeta Talwar, said, "In keeping with our understanding of the growing importance of well-being to our consumers, we have launched Tetley green tea in a leaf pack to cater a more mainstream tea drinking segment who also seeks a healthier alternative." October 20, 2008 | Economic Times

Tata Tea goes for an image makeover


Bangalore: The country's largest tea company (by volume) Tata Tea is trying to give the humble 'chai 'an image makeover to ensure that the youth continues to remain loyal to the beverage.

Be it their 'jaago re' campaign or their retail initiative of 'chai unchai', the company is sprucing up the desi chai with its new communication strategy, mainly centred on social issues, and newer products like ready-to-drink beverages. Tea has traditionally always been marketed to the housewife who made the tea. We made a conscious shift from this positioning to connect emotively and intellectually with every consumer, Sangeeta Talwar, executive director, marketing, said. The ongoing 'jaago re' campaign was rolled out in October to establish a social awakening among the youth to encourage them to vote. From a media-based activity, the campaign will soon be extended on the ground level across 200 colleges in the country. Our communication will go beyond tea and be focused on social consciousness. We want to change the mindset of the youth from one that is apathetic to realising that they have the power to make a change, Ms Talwar said. Some of the other communication off late has also been centred on environmental issues like saving fuel and water. Although Tata Tea is clear it will not be roping in any brand ambassadors to promote its brands, in 2005 tennis player Sania Mirza has been roped in to alter the brand communication from 'taazgi' or freshness to that of 'taste kamyaabi ka' or success. On the products side the company is betting big on its tea bags, the ready-to-drink market and rolling out two new formats for its chai unchai outlets. With two-thirds of the country being young and seeking quick fix beverages, we not only refreshed our packaging but have also introduced tea bags across seven of our brands, Ms Talwar said. She also said that the ready-to-drink segment is a large and growing category across the world and the trend is likely to catch on in India too as there will be a growing market for lighter teas. The company will also extend its 'chai-un-chai' retail outlets by experimenting with two new formats to appeal to the hangout crowd. Besides the high street format, similar to cafes, the company is also toying with the idea of combining the outlet with bookstores or malls. March 13, 2009 | The Times of India

Go, cast your vote, India Inc tells employees


Excerpts: Corporate India, among the worst hit by the 26/11 terrorist attacks in Mumbai, is using the emotional momentum that tragedy generated to get its employees to go out and exercise their franchise. From informal gatherings around water coolers, overflowing with conversations underlining the importance of ones right to vote, to mailers being sent out to demystify the electoral process, all attempts are being made to encourage employees to cast their votes during the upcoming general elections. Tata group company Tata Tea, which has been running a brand promotion campaign called Jaago Re built around the theme of voter rights for over a year, has been actively taking the campaign to various IT and telecom companies like Infosys, Wipro, TCS and Tata

Teleservices. Since IT companies house a large number of employees, the idea is to target a base of young techies. TCS, for instance, is the largest employer with 1.14 lakh employees on its rolls. The Jaago Re campaign carries a social message and promotes voter registration. It targets the younger generation of first time voters. Said Sushant Dash, associate president, marketing at Tata Tea: "Various IT companies have been approached to create an awakening among the youth on the importance of exercising their right to vote as a means to bring about the change they seek."

March 21, 2009 | The Economic Times

Tata Tea forays into branded cold drink market


Tata Tea on Friday announced its foray into the branded cold drink market with launch of its cold beverage T!ON. The product has been launched in three flavors - Mango Rush, Peach Punch and Apple Buzz and will be initially launched in Chennai, a press release said here today. "This is a defining moment in the history of Tata Tea as it symbolizes the transformative change taking place in the company," Tata Tea, Executive Director, Sangeeta Talwar said in the release. The 400 ml bottle has been competitively priced at Rs 22, the release said. The move is significant for Tate Tea, which has been steadily transforming itself from a company with primary focus on tea to a beverages company focusing on the wellness and health platform, the release said. Tata Tea has operations in over 40 countries.

August 26, 2009 | Business Standard

Tata Tea launches new 'Jaago Re' campaign, on corruption


Buouyed by the success of Jaago Re, its earlier campaign which exhorted people to wake up and vote, Indias largest tea manufacturer, Tata Tea, today launched another campaign titled Aaj Se Khilana Bandh, Pilana Shuru. This version takes the issue of corruption and urges citizens to awaken and fight against it. Sangeeta Talwar, Executive Director, told reporters here: As the world recovers from one of the worst financial crisis, there will emerge a new world economic order, in which India will play a significant role. However, one of the single largest deterrents of the speed at which public and private investment and sectorial and social reforms can impact the life of the Aam Admi (common man) is corruption.

The new campaign will be a 360 degree integrated marketing campaign, which will connect equally with consumers across the retail network of Tata Tea, as also through online and mobile touch points. Various on-the-ground initiatives will take the message closer. Tata Tea will also come out with a Jaago Re Corruption Index. This will gauge the perception of people on corruption and quantify it. It will also promote December 9, internationally marked as Anti-Corruption Day, to make it into a national activity. The earlier campaign in 2008, which focused on urging youth to vote, boosted their sales significantly and helped Tata Tea to get an annual turnover of Rs 4,800 crore. The company says these campaigns are not for a particular brand but for Tata Tea as a whole, and that the investment in this campaign is much higher than the previous one. Tata Tea has a 21 per cent market share in terms of volumes. It said its promoted website, jaagore.com, had more than 28 lakh visitors and more than a fourth of them did finally vote. Even with two similar campaigns, one after the other, there will not be consumer fatigue, as these are persistent issues, though their creative rendition would be different every time, concluded Talwar. September 01, 2009 | Business Standard

Tata Tea hits out at corruption in the second edition of its Jaago Re campaign
Jaago Re (awaken) is back. After a point-blank shot at politicians qualifications to do their job and a stirring campaign urging the youth to vote, Tata Tea now wants a pledge from you against corruption. Last week, the countrys largest tea brand rolled out its new television commercial targeting the rampant problem. A clerk cleans food from his mouth with his fingers and says Khaenge nahin, toh kaam kaise hoga? Haan? (If we wont eat, how will we work?). He then pushes an empty container from his lunch box towards a man with a briefcase sitting opposite to him and asks, Toh laiye, kya hai? (So what is that you have?), obviously hinting that he wants a bribe to do the work. Two young boys whove been watching the clerk come to him and one of them says: Haan haan khaiye, ungli chaat kar khaiye (Eat and lick your finger too). The shot changes to several other instances showing corruption at work a clerk counting rupee notes, a ticket inspector on a train accepting bribe from a passenger and so on along with a narrative that says Koi chhup ke khaata hai, koi jhuk ke khaata hai...koi bhagwan ke naam par khata hai (Some hide while they accept it, some bend...some even accept it the name of god). Next, the shot gets back to the two boys who now ask, But do you realise, why do people accept bribes? Thats because we offer them one. One of them puts a cup of tea in front of the corrupt clerk and says, Aaj se khilana bandh, pilana shuru Tata Tea peeyo aur kaam karo (Drink Tata Tea and do your work). The commercial created by Lowe Lintas for Tata Tea is a part of a high-pitched 360-degree campaign titled Khilana band, pilana shuru that will run across mediums such as radio, internet, mobile phones, outdoor, in-store, traders and so on, and will urge people to take a pledge against corruption they will not bribe to get their work done. The one-minute film will run across a variety of channels general entertainment, news, youth-focused for

over 45 days. There is also a 45-second version that will be interspersed with the longer one after a while. The current commercial will be followed by another one on the same theme. We have a very robust plan ready to take this campaign forward. This is going to be at least as big as the Jaago Re campaign before the election, says Tata Tea Executive Director Sangeeta Talwar. The core idea The core thought behind Jaago Re goes back to 2007. That was when Tata Tea became the largest branded tea company in India in terms of volumes. It edged past the long-dominating market leader, Hindustan Unilever, in volumes with a 19.2 per cent share of the branded tea market. Being the top brand in the worlds largest tea market was surely a feat. Thats when the company decided to take the brands identity to another level. Tata Tea was now a mega brand and we thought instead of the usual communication, lets see if there is a big, mega idea that communicates the brand to consumers at a different level altogether, says Talwar. Communications relating to tea had so far been mostly about physical and mental rejuvenation. It is a boring category. Tea is sold as a waking-up product. You wake up in the morning and have a cup of tea. We wanted to break out of that mould, says Lowe Executive Director Tarun Chauhan. The brief to Lowe was to come up with an idea that linked to the mega nature of the country, its people and the fact that tea is its largest beverage, as also to make the brand younger, more contemporary and exciting. Tea has been the single largest consumption beverage in India with 91 per cent penetration. It is embedded in the DNA of an average Indian and cuts across various earning groups, age groups and both urban and rural populations. So we were looking for an idea that can embed itself into the heart, mind and soul of the average Indian citizen, says Talwar. Lowe then came up with the idea of Jaago Re the thought being not just wake up with a cup of tea but awaken to whats happening around you and the big issues you face everyday. The agency then looked into ideas that related to some of the issues facing the people of the country and found the one questioning the political system most appealing. In 2007, Tata Tea came up with its first Jaago Re campaign where a politician was questioned about his qualifications. In 2008, 2009 being an election year, the company took the idea forward with a campaign which urged the youth to vote, to select better leaders for a better democracy. The thought behind the campaign was if only 10 per cent of youth vote today, imagine the potential if 100 per cent went to vote! You would get 10 times more votes, says Talwar. The company thus came up with a campaign urging the youth to vote on the election day. The campaign was supported by several enablement initiatives: The Jaago Re website was built to help voters register themselves in 35 cities. Tata Tea says about 3 million people visited the site, of which about 600,000 registered for voting. In January and February 2009, Tata Tea did a consumer study through IMRB on how the Jaago Re concept has been accepted by the consumer and how did the campaign do. The sample size was over 3,500 consumers across urban and rural India. While 85 per cent of the consumers from urban parts recalled the campaign and related it to the Tata Tea brand, the figure was 70 per cent for rural consumers. Clearly, there was a good connect with the brand and the likeability was high, says Talwar.

Next big issue Post-elections, Tata Tea looked into the next big issue facing the country. After the politician issue, the big issue staring in our face is corruption. To come up with the thought was a no-brainer, says Chauhan. The task for us was how to convert it effectively into our brand idea (Jaago Re). Corruption was obviously the next big issue. Its the largest impediment to growth and development. So we chose it as a theme for this years Jaago Re campaign. But then we brought a twist to it, says Talwar. If you look at the way the Khilana bandh, pilana shuru commercial has been done, says Chauhan, it is not about people being corrupt but about people encouraging corruption. If you stop corrupting, the corrupt will stop that is the thought behind the campaign. It is about when you have a cup of tea, it awakens you and therefore you can do things in life that are either for the betterment of the society or question current paradigms. A part of the 360-degree campaign will be the Jaago Re Corruption Index in three metros on who has paid a bribe in the past three months. The index will gauge the perception of people on corruption and quantify it on a quarterly basis. The campaign will be supported by several ground-level activities. For example, across 70,000 trade outlets throughout the country, the company will have drop boxes where people can drop their pledge that they will not bribe. These booklets will then be collected and the retailer with the highest number of coupons in the area will be rewarded. The online campaign will provide an opportunity to users to make a pledge through www.jaagore.com. Pledges can also be made over mobile phones through SMS. The crux of the campaign will be the number of people who pledge. It will be a cumulative figure of all the pledges that we will receive through internet, mobile phone or trade channels, says Talwar. So lets see how many are awakened through the campaign. Will you make a pledge? September 11, 2009 | DNA

Tata Tea's second wake-up call


Mumbai: 450 billion cups a year -- that's the potential reach for an average tea brand in India. Small wonder Tata Tea, the market leader in this far-reaching category, hit the bull's eye when it launched the Jaago Re campaign, which went on to become a non-partisan movement. With the pitch, the company successfully built an emotional connect with its target audience. Explaining the logic behind the campaign, Sangeeta Talwar, executive director, Tata Tea, said, "There was only one question at that time -- can we step back and reach the essence of the message that tea gives us. Tea wakes us up but we looked beyond the cliche of 'waking up in the morning'. We thought, how about waking our thoughts, minds and start questioning."

The campaign, which kicked off as a speak-up drive initially, took the shape of a revolution in 2008 when it endorsed the idea of democracy. The opportunity lay in the fact that only 10% of youth cast their ballots and the target was to encourage the remaining 90% to vote. This movement was not just a call for action but a platform (www.jaagore.com) that provided a potential voter all the information and the facilities for becoming a part of the electoral process. "The impact was immense. We did a study in March measuring the impact on the brand. 85% of the respondents narrated the campaign back to us. It was the same target group we tried reaching through the campaign. In terms of sales, the results were overwhelming. While tea industry in India is growing at 3%, we have been growing much faster since the campaign was launched," Talwar added. The success of the campaign led to further improvisation. "We decided to move from one issue to another and this time the target was corruption," Talwar said. The new Jaago Re -christened'Aaj Se Khilana Bandh, Pilana Shuru' -- urges the citizens to wake up and fight against corruption. Talwar explains, "Corruption is a malaise that is endemic to our everyday life. It's our next connect point with our consumers. It's one problem we all detest but still are part of." The 'Khilana Bandh, Pilana Shuru' campaign will be a 360-degree integrated marketing effort, which will connect equally with consumers across Tata Tea's retail network and through online and mobile touch points. A myriad of on-ground initiatives will take the message closer to people. Tata Tea will also come out with a 'Jaago Re Corruption Index' to gauge people's perception about corruption and quantify it. Tata Tea will also promote December 9, which is internationally celebrated as 'Anti-Corruption Day'. "We have kept about 1,00,000 pledge books with kirana stores across the country, and the focus this time is on people at the grass-root level," she said. This time Tata Tea hasn't put a number to pledges it wants (unlike the one billion figure it had for the last campaign), but Talwar said, "a billion wouldn't be bad."

October 30, 2009 | Business Standard

Tata Tea quits beverage retailing, to focus on branded products


Excerpts: Tata Tea, the second largest branded tea maker in the world, will exit the beverage retailing business, including Chai Unchai, as part of the groups strategy to focus on its branded products. Tata Coffee, another group company, which sold its 34.3 per cent equity in retail chain Barista to NRI investor C Sivasankaran five years earlier, has also dropped its plan to re-enter the business.

In a move to refocus on growth of brands, the company has decided to exit from caf business like Chai Unchai in Bangalore, said Sangeeta Talwar, executive director marketing, Tata Tea. She confirmed that Tata Coffee, a listed subsidiary of Tata Tea, would not pursue its plans in the caf business. Tata Coffee was waiting for the non-compete contract it signed with Barista to expire for launching its caf network. The largest coffee plantation company in Asia is also running its branded coffee powder retail business through Mr Bean Coffee Junction. Tata Tea is going through a transformation and consolidation phase, focusing more on branded products and reducing exposure in commodities, said Tetley chief executive officer Peter Unsworth, while announcing the quarterly results. The group markets beverages mainly under brands such as Tata Tea, Himalayan and Tata Coffee, in addition to the acquired brands like Tetley, Good Earth and Eight OClock Coffee. Though the company was called Tata Tea by the outside world, Unsworth said that the name of the entity was Tata Beverages for insiders. Finding a new unified brand name is still on the cards, he added. Sangeeta Talwar said the recently introduced cold drink brand, TiON, was a success in Tamil Nadu, with a three per cent market share in Chennai. The company plans to enter other South Indian states with the drink. The company is hunting for opportunities in beverages segments across the world, said Tata Tea Managing Director Percy T Siganporia. West Asia South America and Africa will be the targeted geographies for fresh forays. In France and Australia, the company will soon begin operation. Tata Tea, which is exploring takeover opportunities in the US and Africa, has Rs 3,000 crore cash and cash equivalents on books. December 19, 2009 | The Financial Express

Branded teas: Tata Tea pips HUL in value


Excerpts: Mumbai: With a value share of 22.6% in November, Tata Tea is now the market leader in the Rs 7,000-crore branded tea market, having overtaken peer Hindustan Unilever (HUL) which has a value share of 21.3% (source:AC Nielsen). The companys best-selling brand is Agni, which caters to the mass segment and other brands include Tata Tea Gold, Chakra, Gemini and Kanan Devan. The Rs 5,100 crore Tata Tea, which has been the market leader in terms of volumes since June 2007, clocked a volume share in November of 19.9%, about 250 basis points higher than HULs 17.3%. HULs branded teas portfolio comprises the Brooke Bond and Lipton brands. Sangeeta Talwar, executive director, Tata Tea, said, We are looking at several innovative products targetted at both the premium and mass markets and are planning to spend more on pushing our brands.

The company has just soft-launched a soft drink Tion in Tamil Nadu to take on cola drinks and a national launch for the product is expected in a year. Talwar said the Jaago Re campaign, which was rolled out a couple of years back, had resulted in a strong connect with the consumer. The other reason for the strong sales, Talwar said was the better reach that the company had achieved through organised retail. In the six months to September 2009, the companys advertising and sales expenditure was close to Rs 450 crore higher than the Rs 417 crore that it spent in the corresponding period of 2008. The company was able to maintain its operating profit margins at 12% for the first half of 2009-10. Over the past two years, Tata Tea has been pursuing several strategies including launching value packs to be able to compete with local brands across the country. The company repriced some of its brands including Agni, which paid off. In addition to that, the company also strengthened the brew and supported the brand with better packaging and communication.

February 04, 2010 | The Financial Express

Tata Tea: staying awake and ahead


Tata Teas campaign Jaagte Raho has attracted a lot of attention. Much of this, along with its distribution and product widening strategies, enabled the company to bring about price increases even as volume growth remained steady. Sales for the quarter ended December 2009, on a consolidated basis, grew by 20.7% over the same period of the previous year to touch Rs1,549.2 crore. And even if the revenues of Rs 120 crore originating from its newly acquired Russian beverage major Grand are removed, the company saw an 11.4% growth in the December 2009 quarter over the previous year. However the campaign, along with the launch of the T!on brand of soft drinks in Tamil Nadu would have taken a toll on the margins. The December quarter saw the advertisement and promotion (A&P) costs increase to 18.1% from 17% levels recorded in the September 2009 quarter. And then to add to the woes, the costs of key inputs rose. In the December 2009 quarter, the average price of raw tea stood at Rs112.4 per kg which was 22% higher than Rs 89 per kg recorded in December 2008. As a result, material costs, as a percentage of sales, grew to 40.3% during the December 2009 quarter versus 39% in the September 2009 quarter and 37.5% in the same period of the previous year. Consequently, the companys operating profit margin declined by 115 basis points over the same period of the previous year to 12.6% in the December 2009 quarter. Going ahead, analysts expect that the company would keep facing margin pressure from the rising input costs and also from additional A&P spend. However, this will be in the short-term in the longer period, the company is expected to benefit from its wide presence in the global markets it has 20.1% volume share in India, 26.8% in the UK, and 40.8% in Canada.

Additionally, its widening portfolio will fade out the effect of the lower profitable Tetley brand. Already, in the current quarter, Tetley contributed 40% of revenues as against 45.9% last year. Overall, the Indian tea business contributed 30% to its revenues as against 27.8% last year. So the company will be depending on a mixed brew to stay awake and ahead.

April 09, 2010 | domain-b.com

Tata Tea, PepsiCo in beverages alliance


Tata Tea Ltd has signed a memorandum of understanding (MoU) with global beverages major PepsoCo Inc to explore the possibility of forming a joint venture for the production and distribution of non-carbonated ready-to-drink beverages, focused on health and enhanced wellness. "The board of Tata Tea Ltd today approved a non-binding memorandum of understanding with PepsiCo Inc, with the intention of exploring the formation of a joint venture in the area of non-carbonated ready-to-drink beverages, focused on health and enhanced wellness," Tata Tea said in a regulatory filing. Tata Tea said the two companies would finalise definitive agreements for the joint venture over the next few months. The proposed joint venture will not be in conflict with any existing arrangements of either parties and the transaction will be subject to corporate and statutory approvals as may be required, the release said. Tata Tea has a 100 per cent export-oriented unit manufacturing instant tea in Munnar, Kerala, which is the largest such facility outside the United States. The unit uses a unique process developed in-house for extraction from tea leaves, giving it a distinctive liquoring and taste profile. Instant tea is used for light density 100 per cent teas, iced tea mixes and in the preparation of ready-to- drink (RTD) beverages. The Munnar unit is KOSHER and HACCP certified, according to information available on the company's web site. With about 15,900 hectares under tea, Tata Tea produces around 30 million kg of black tea annually. It has five major brands in the Indian market - Tata Tea, Tetley, Kanan Devan, Chakra Gold and Gemini - catering to all major consumer segments for tea. The Tata Tea brand, a mrket leader in terms of both of value and volume sales in India, has been recognised as a `Super Brand' in the country. With a distribution network of 38 C&F agents and 2,500 stockists, the company caters to over 1.7 million retail outlets in the country. The Tata Tea group of companies, which includes Tata Tea and the UK-based Tetley Group, is also the world's second largest global branded tea operation with product and brand presence in 40 countries. With a focus on branded product offerings in tea anda significant presence in the tea producing and consuming regions, Tata Tea is also India's first

multinational companies. PepsiCo India, part of the US-based global consumer products giant PepsiCo Inc, is increasingly focusing on health foods even as it continues its lead in carbonated beverages and convenience foods.

May 06, 2010 | The Times of India

Tata Tea changes name to Tata Global Beverages


MUMBAI: With a view to build a new and strong global brand, Tata group company, Tata Tea, today said that it has decided to change its name from Tata Tea Limited to Tata Global Beverages Limited. The company's Board of Directors has approved a change in the name of the company from Tata Tea to Tata Global Beverages, a statement issued here said. Tata Tea, Tetley, Eight O Clock Coffee and other company names will change to one corporate name--Tata Global Beverages Limited--subject to the approval of the shareholders and the approval of the Central Government, the statement said. The approval of the shareholders is proposed to be sought by way of postal ballot in accordance with the provisions of Section 192 A of the Companies Act, 1956, the statement said. Following the operational integration of its five beverage businesses announced last year, Tata Global Beverages will unite all the beverage interests, marking another step in its transformation to become a global leader in 'good for you' beverages. Current brand names will remain for its products, it said.