TEA BAG GROWTH & TRENDS – 2010FAITTA – 28th Aug, 2010 New Delhi

SACHEN VERMASenior Vice President Marketing – JV Gokal & Co. Pvt Ltd

MARKETERS UNCERTAINTY

• IN INDIA TEA BAG IS A VERY SMALL CATEGORY, DOES IT MAKES SENSE TO ENTER IN IT AT ALL ?

• WHAT IS SIZE OF THE CATEGORY AND HOW IT IS CHANGING ?

• WHAT ARE THE OVERALL TRENDS IN THE MARKETPLACE IN TERMS OF SEGMENTS, PACK SIZES & FLAVOURS ?

• WHICH ARE THE NEW MARKETS TO ENTER ?

• SHOULD I BE LOOKING AT SOME NEW DISTRIBUTION CHANNELS, & INNOVATIVE PROMOTION STRATEGIES ? 

 

BRAND PRODUCT CATEGORY

HOUSEHOLDS IN MILLION

GHARI WASHING POWDER 132FAIR & LOVELY SKIN CREAM 116WHEEL WASHING POWDER 110COLGATE TOOTHPASTE 106PARLE G BISCUITS 92PARACHUTE COCUNUT OIL 88LIFEBUOY SOAP 87HALDIRAM SALTY SNACKS 86TATA TEA PACKAGED TEA 25

BRAND REACH IN HOUSEHOLDS AC NIELSEN 2009 REPORT

BRANDED TEA - PENETRATION

State No. of Household

(in millions)

Branded Tea Penetration %

Delhi 2.6 m 91%

Ahmedabad 1.0 m 90%

Bangalore 1.4 m 69%

Chennai 1.4 m 72%

Kolkata 2.9 m 20%

Mumbai 3.7 m 72%

Hyderabad 1.2 m 59%

Pune 0.9 m 64%

Major Branded players in the Indian market

350 m kg Packaged tea Market dominated by HUL & Tata

Sizeable Gap between the two Market leaders with a total 40%+ market share & the third player

Strong Regional brands in many states trying hard to enter new markets

Tea Bags Usage

• Tea bags account for about 12 percent of the volume of world consumption & in terms of Value it is much higher

• Tea bags Very Popular in Europe, US, CIS, Middle East, Australia & Africa

• Tea bags revolutionised tea brewing, Now volumes look set to grow as tea drinkers reach for Convenience,

Innovation & flavours

Global Tea bag Consumption

UK Germany USA Russia

96% 92%

60% 56%

Tea Bag Share - India

Packet tea97.5%

Tea bags 2.5%

Tea bags Statistics

Domestic Consumption – 7000 mt/annum

Annual Growth – 18 %

Production – 16000 mt/annum

Major Thrust by the two market leaders in the tea bag segment

Tea bag Exports

Exports – 8000 mt/annum

Major exporters – HUL, JV GOKAL, Tata Madhujayanti

Major Exports Market – Australia, CIS

Leading Tea bag Brands

Major brands – Tetley, Taj Mahal, Tata, Twinings, Nestea, Duncan

Regional players like Girnar, Waghbakri, Jivraj,

Jay, Society already active in the tea bag segment

North & West India Consumption is 70% of the tea bags Produce

              Value Added Tea bags

• Flavoured teabags showing 30% growth annum

• Flavoured teabag annual consumption – 700 mt

• Popular flavours - ginger, cardamom, lemon, Earl grey, and Tulsi

RETAIL CONSUMER PRICE (200 gm pack in Rs)

Taj Mahal TETLEY NESTEA

103

96

90

CONSUMER DRIVERS

• Wellness and convenience - These continue to play major roles for modern consumers. Consumers are now well aware for instance of the apparent health benefits of black & green teas. Pharma companies entering

• New flavours and functionalities - Today’s consumers want new flavours, functionality, interesting ingredients, and practical packaging that can be taken anywhere

• Convenience and portability - This shift is having a notable effect on tea bags with more intensely-flavoured blends and packaging solutions

            Forecast on Tea bags

• ICRA Management Consulting Services Forecast puts existing market size at 7000 tons/annum (2009)

• Their Forecast is bullish on teabags - sales to rise to as high as 15,400 tonne by 2012-13

    Tea bag Trends

• Private labels to take a boost with Modern trade format to grow from 150000 Cr in 2010 to 350000 Cr by 2013. In 2018 Forecast is 815000 Cr.

• Packaging Innovations on their way. Shift from 2 gm to 1.8 gm. Newer formats

• Companies now focusing on new products in the flavored tea, green tea, specialty tea and herbal infusion sectors

Appreciate Your Cooperation!

SACHEN VERMA