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Tea Industry in India By : Mai Mohammed Gaber

Industry overview :Tea isnt 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 IndiaTata TeaTata 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:TetleyVitaxGood EarthJemcaBrooke 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 TeaWagh 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.

The Emerging Trend of Tea in India

The 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.

Government Policies

Consumer Behaviour of Tea in IndiaThe behavioural attributes that may influence tea consumption pattern of the consumers considered as following:Popularity of the BrandBrand LoyaltyColourPrice

SocietyTeaTataTeaBrooke BondLoose teaTotal Popularity of a brand80625550247Brand loyalty75503423182colour60502520155Price 70542220166Total 285216136113750

Major Players Strategies

The Top 3 Tea brands in IndiaTata Tea 19%Brooke Bond 18.1%Lipton 6.2%

1- Tata Tea:Tata Tea is the Market Leader in 2014-2015.

Products :Its other brands are mentioned below:TetleyTata TeaVitaxGood EarthJemcaEight Oclock CoffeeTata CoffeeHimalayan WaterJoekelsGrand

Positioning :Based on the product Qulaity as its 15% longer superior quality leaves.

Most aromatic tea brandSuperior quality tea leavesSocially 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.

BrandTata Gold(Rs.)Taj Mahal(Rs.)Red Label(Rs.)Wagh Bakri(Rs.)

Price/250gm10011311290

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 SKUs 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 SpecialTaaza Dust (Popular Segment) Taaza Leaf (Popular Segment) Taaza Gold (Premium Segment) Taaza Masala Chaska(Premium Segment)

Pricing :Priced in 2 segments :Upper people segemtMiddle people segmentPlace :Well established distribution channels like Tata Tea.Wholesalers . RetailersPromotion :Celebrity of endorsement-Akshay KumarAdvertisementsWOM & 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 IndiaUrban & Rural Areas.Eg.: Hyperstarts, small retail stores..etc

Promotion :Advertisment.Sales promotionsInternet MarketingSponserships