Tea Industry in India By : Mai Mohammed Gaber

Industry overview :• Tea isn’t simply tea in India but it is like a staple beverage here and a day

without it is impossible and incomplete.

• Originally tea is indigenous to the Eastern and Northern parts of India, but the tea industry has expanded and grown tremendously over the years, making India one of the largest grower and producers of tea in the world. 

• The tea production in India was 979,000 tonnes as of 2010. In terms of consumption and export of tea, India is the second world leader. It accounts for 26.5% of the global production of tea. 

• India has retained its leadership over the tea industry for the last 150 years. The total turnover of this industry is roughly Rs.10, 000 crores. 

• Since 1947, the tea production in India has increased by 250% and the land are used for production has increased by 40%.

• Even the export sector of India has experienced an increase in the export of this commodity. The total net foreign exchange in India is roughly Rs.1847 crores per annum. 

• The tea industry in India is labor intensive, meaning it depends heavily on human labor instead of machines. This industry provides employment to more than 1.1 million Indian workers and almost half the workforce constitutes of women.

• There is a wide variety of tea offered by India; from Green Tea to CTC tea to the aromatic Darjeeling tea and the strong Assamese tea, the range of tea available in India is unparalleled.

Top Tea Brands in India• Tata Tea• Tata Tea is the most popular tea brand in India and presently holds the

maximum share of tea segment in India. Tata Tea is a tea brand of Tata Global Beverages Limited, a subsidiary of Tata Group, involved in production and distribution of non-alcoholic beverages.which was set up in 1962 as a joint venture of James Finlay and Company and Tata Sons. The company currently operates in all the continents of the world. Its other brands are mentioned below:

• Tetley• Vitax• Good Earth• Jemca• Brooke Bond Taaza• Brooke Bond Taaza is a famous and popular tea brand from the British-Dutch

consumer care conglomerate called Unilever. Taaza is the name given to a new type of tea introduced by the Brooke Bond tea company. The tea leaves of Taaza provide a unique taste and the much-needed refreshment to the minds of people.

• Brooke Bond Red Label • Like 'Taaza', Brooke Bond Red Label is also another popular tea brand from

Unilever. It has been comforting the taste buds of millions around the world since 1869. It is a special tea processed from the tea leaves procured from Assam. The strong taste and the aroma of Red Label are simply unmatchable.

• Lipton Green Tea• Lipton Green Tea is a Lipton product. The company was named Thomas J.

Lipton Co. at the time of its inception in 1890. Its factory and head offices are in Hoboken, New Jersey, U.S.A. With people across the globe becoming more health conscious, the demand of green tea has gone up manifolds in the recent years. Consequently, Lipton introduced a green tea variant that became an instant hit amongst the green tea lovers.

• Brooke Bond Taj Mahal Tea• Taj Mahal Tea is also a Hindustan Unilever product. Heavenly freshness and

unique taste that one gets having sipped Taj Mahal Tea are the result of the special type of tea leaves that are chosen for this brand. Some of the most famous names in India like Tabla maestro Ustaad Zakir Hussain and Bollywood actor Saif Ali Khan have endorsed Taj Mahal Tea.

• Wagh Bakri Tea• Wagh Bakri Tea is a product of Wagh Bakri Tea House, which was

incorporated in 1892 in Ahmedabad by Sir Narandas Desai. Wagh Bakri Tea enjoys a huge fan base in the national capital of Delhi, Rajasthan and Gujarat.

• Tulsi Green Tea• Tulsi Green Tea is a unique product from Organic India founded in 1990 by

a group of people. Tulsi Green Tea has earned quite a reputation in the herbal tea segment of the Indian tea market. The health conscious section of the society prefers Tulsi Green Tea over other available brands in the market. This tea helps in maintaining weight and improving metabolism in addition to strengthening immunity.

• Society Tea • Society Tea is a Hasmukh & Co. product. The company was

incorporated in 1933. Tea lovers who prefer the taste choose Society Tea. It has got a refreshing aroma that works like a stress buster.

• Pataka Tea• Pataka Tea is the main product of the beverages division of the well-

known Pataka Group founded in 1952. Pataka Tea was set up in 2000, so that the group could venture into the business of packed tea. This company has done fairly well in the tea segment since its inception and has won a lot of appreciation and huge success within a very short span of time.

Market Segmentation of Tea

• Indian tea market is huge with large number of local and regional players. With the passage of time and due to change in the consumption pattern, there has been diversification and value addition in tea production.

• In India, tea is consumed in two forms: packaged (branded) or loose. While a major share of the market is of loose tea suppliers, branded tea manufacturers are also fast increasing their market share. The demand for packet tea is driven by rising consumer incomes, quality of tea and product diversification with flavoured tea production.

23%

16%

6%

6%5%

44%

Top Five Tea Consuming Countries

India 23%china 16%Russia 6%UK 6%Japan 5%Others 44%

The Emerging Trend of Tea in IndiaThe Emerging Trend of Tea in India

• Tea production is expected to inch up marginally higher than last year in 2014-15 on account of better productivity from North India.

• India is the second largest producer of tea in the world with a 25% share of total production, but the country consumes 75-80% of its own production. Annual production of tea in 2013 stood at 1200 million kg, with North India accounting for 79% in total production and the rest coming from South India.

• Tea production in India in 2013 grew by 6.5% with a production of 1200 million kgs as compared to 1,126 million kgs in 2012. The production increase had little impact on exports as the majority of this tea was CTC grade and effectively all was consumed by the fast-growing domestic market.

2011-12 2012-13 2013-14 2014-15 2015-160

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north indiasouth indiaall india

Government Policies

Indian Tea Association

Founded in 1881, the Indian Tea Association is the premier and the oldest organization of tea producers in

India. The Association has played a multi-dimensional role

towards formulating policies and initiating action towards the development and growth of the Industry, liaising with the Tea Board, Government and other

related bodies. 

Consumer Behaviour of Tea in IndiaThe behavioural attributes that may influence tea consumption pattern of

the consumers considered as following:• Popularity of the Brand• Brand Loyalty• Colour • Price

Society Tea Tata Tea Brooke Bond Loose tea Total 

Popularity of a brand

80 62 55 50 247

Brand loyalty 75 50 34 23 182

colour 60 50 25 20 155

Price 70 54 22 20 166

Total 285 216 136 113 750

Major Players Strategies

The Top 3 Tea brands in India• Tata Tea 19%• Brooke Bond 18.1%• Lipton 6.2%

1- Tata Tea:

• Tata Tea is the Market Leader in 2014-2015.

Tetley 39%

Tata Tea 29%

Eight O’clock 17%

Products :Its other brands are mentioned below:• Tetley• Tata Tea• Vitax• Good Earth• Jemca• Eight O’clock Coffee• Tata Coffee• Himalayan Water• Joekels• Grand

Positioning :• Based on the product Qulaity as it’s 15% longer

superior quality leaves.

Most aromatic tea brand

Superior quality tea leaves Socially responsible

Price :• Price

• Pricing appropriate for target segment i.e. Middle class.• Proposition of value for money by offering high quality tea leaves.• Competitive pricing, lesser than most of its competitors.

Brand Tata Gold(Rs.)

Taj Mahal(Rs.)

Red Label(Rs.)

Wagh Bakri(Rs.)

Price/250gm 100 113 112 90

Place :• Place• The tea leaves are cultivated across 51 tea estates owned

and controlled by Tata Global Beverages• After plucking, leaves are fermented, filtered and

packaged in Tata owned factories• Packaged SKU’s sold at convenience grocery stores &

exclusive stores like Easyday, Food Bazar etc.

Promotion :• Promotion• ‘Jaago Re’ campaign• ‘Gaon Chalo’ Abhiyaan• ‘Power of 49’ campaign• Blogs on latest social issues• Dedicated pages on social media sites like Facebook• ‘Voter Registration’ campaign

2- Brooke Bond:• The top competitor of Tata Tea. The brand has the biggest tea

market share in India 18.1%.

• Products:• Red Label  • Red Label Natural Care   • Red Label Dust   • Red Label Special• Taaza Dust (Popular Segment)  • Taaza Leaf (Popular Segment) • Taaza Gold (Premium Segment)  • Taaza Masala Chaska(Premium Segment)

Pricing :Priced in 2 segments :• Upper people segemt• Middle people segment

• Place :• Well established distribution channels like Tata Tea.• Wholesalers . Retailers

• Promotion :• Celebrity of endorsement-Akshay Kumar• Advertisements• WOM & Digital Media

3- Lipton:

• Products :• Lipton Iced Tea • Lipton Fresh Brew Iced Tea• Lipton Tea & Honey • Lipton Iced Tea Mixes • Lipton Flavored Black Tea • Lipton Black Tea • Lipton Herbal Tea • Lipton White and Red Tea

Pricing :• Premium pricing strategy: to encourage favourable

perceptions among buyers.• Value based pricing strategy: • Value for the customer and not production cost.

• Place :• All over India• Urban & Rural Areas.• Eg.: Hyperstarts, small retail stores..etc

Promotion :

• Advertisment.• Sales promotions• Internet Marketing• Sponserships