Power brands driving Tata Tea

Biggest tea volumes grosser aims to be a leader in value too

MUMBAI: With branded volumes up by 15% and value growth even higher, at 16%, Tata Tea has now become the largest tea brand in India.

A C Nielsen annualised figures for 2007 show that Tata Tea’s volume share was 19.4% while Hindustan Unilever, the leader in the branded tea market till now, lagged at 19.1%.

Riding on brands such as Tata Tea premium Gold and Agni along with Tetley, the company overtook the rival in June and increased the gap every month.

For December, the numbers were 21.2% and 18.9% respectively, establishing its lead in the Rs6500 crore tea market. In value terms, the company still lags HUL which owns successful brands such as Taj Mahal, Brooke Bond and Lipton.

Sangeeta Talwar, executive director, marketing, Tata Tea, said, “We have taken a bit of share from everywhere including the market leaders as well as large local players. In value terms, we are just 1.2 points behind and will soon overtake on this front too and then there will be new horizons to cross.”

The new horizons could well be establishing its latest venture, the out-of-home tea outlets under the name - Chai Unchai.

The first two outlets have recently been opened in Bangalore and the company aims to make it as widespread as the tea stalls sprawled across the country. Officials are not ruling out taking the retail venture overseas, once pan India presence is established.

Also, in the offering would be international products from the ready-to-drink portfolio being retailed or served at these outlets.

Tata Tea recorded standalone net sales of Rs355.38 crore for the quarter ended December 21,2007, up 22% from last year for the same quarter with profit before tax and exceptionals at Rs86crore, an improvement of 96% year-on-year. Consolidated net sales stood increased by 7% to Rs 1,184.9 crore.

The net profit for the quarter, which rose 11-fold, includes the proceeds from sale of stake in US company Glaceau.

With this, Tata Tea has started clearing all its debts and by the end of this financial year we will not have any debts, said L K Krishnakumar, vice president, finance, Tata Tea. Most of the debts have already been cleared since the stake sale was completed in October. The net debt position today is of a few hundred crore, Krishnakumar added.

 s_tanvi@dnaindia.net