Tea in India

5/19/2018 Tea in India

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TEA IN INDIA

Euromonitor International

July 2013


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T E A I N I N D I A P a s s p o r t I

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1

Trends ......................................................... ................................................................. ................ 1Competitive Landscape ..................................................... ........................................................... 2Prospects ..................................................................................................................... ................ 3Category Data ........................................................ ................................................................. ..... 4

Table 1 Retail Sales of Tea by Category: Volume 2007-2012................................... 4Table 2 Retail Sales of Tea by Category: Value 2007-2012 ..................................... 5Table 3 Retail Sales of Tea by Category: % Volume Growth 2007-2012 .................. 5Table 4 Retail Sales of Tea by Category: % Value Growth 2007-2012 ..................... 6Table 5 Tea: Standard Vs Pods % Value Analysis 2007-2012............................. ..... 6Table 6 Tea Company Shares by Retail Value 2008-2012 ....................................... 6Table 7 Tea Brand Shares by Retail Value 2009-2012 ............................................. 7Table 8 Forecast Retail Sales of Tea by Category: Volume 2012-2017 .................... 7

Table 9 Forecast Retail Sales of Tea by Category: Value 2012-2017 ....................... 8Table 10 Forecast Retail Sales of Tea by Category: % Volume Growth 2012-

2017 ............................................................. ................................................ 8Table 11 Forecast Retail Sales of Tea by Category: % Value Growth 2012-

2017 ............................................................. ................................................ 8Table 12 Tea: Forecast Standard Vs Pods % Value Analysis 2012-2017 ................... 9


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T E A I N I N D I A P a s s p o r t 1


TEA IN INDIA

HEADLINES Tea registers strong retail value growth of 20% in 2012 to reach Rs92 billion

New product launches drive value growth

Black speciality tea bags is the fastest growth category with 23% retail value growth in 2012

Average unit prices increase by 15% in 2012

Unilever retains its leading position with a 29% retail value share in 2012

Over the forecast period tea is expected to grow at constant value CAGR of 8% to reach

Rs133 billion in 2017

TRENDS

The economic growth over the review period led to a change in consumer habits, mainly

among the urban population. These urban consumers with increased disposable incomes are

willing to spend more and are looking for convenience, as well as indulgence options in tea.

They are substituting their standard teas (such as loose black standard tea and loose black

speciality tea) for premium variants. As a result, the contribution of tea bags black standard

and tea bags black speciality to total tea sales was on the rise in 2012 and helped drive value

growth of tea.

Tea posted a retail value growth of 20% to reach Rs92 billion in 2012, marginally higher than

the growth recorded in 2011. Demand for tea continued to be high over the review period and

strong demand for speciality tea and green tea, along with significant increases in prices,

aided value growth in 2012.

Black speciality tea bags and black standard tea bags, with retail value growth rates of 23%and 22%, respectively, registered the highest growth within tea in 2012. Unilevers Brooke

Bond Taj Mahal and Twinings Twinings brand introduced a number of new flavours in black

speciality tea bags, driving growth. Brooke Bond, Lipton Yellow Label and Tata Global

Beverages Tetley also introduced a number of new flavours within black standard tea bags,

helping to drive growth.

A drop in production of tea in 2012 led to tea unit prices registering a rise of 15%. Unit prices

also increased as a result of inflationary pressures and rising input costs, as well as a growing

demand for tea.

Demand for green tea was also on the rise over the review period as consumers showed

greater interest in health and wellness products. Green tea was promoted as having a number

of health benefits, such as weight loss, helping to fight diabetes and cancer, healthier skin,

stronger immune systems and assisting in hair growth. These claimed benefits of green teawere highlighted by all major players in the category, through various promotional campaigns

and in-store activities over the review period, which helped drive the demand for green tea.

Some of the prominent green tea brands available in the market included Girnar Green Tea,

Golden Tips and Twinings Green Tea.

Off-trade tea volumes registered 4% growth while on-trade volumes grew by 3% in 2012.The

strong retail growth was driven by new product development, consumers shifting from

unpackaged to packaged tea, as well as increased penetration of branded tea offerings in

rural areas. On-trade volume growth was aided by increased awareness of tea due to the

introduction of tea lounges, such as the Wagh Bakri Tea Lounges.


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Independent small grocers continued to be the major channel for tea as it alone accounted for

72% of retail volumes in 2012. The contribution of hypermarkets and supermarkets to sales of

tea continued to be strong in 2012, as they together accounted for 22% of tea volumes in the

same year. Some retailers introduced private label, such as Bharti Retails Easy Day Market

and Future Value Retails Big Bazaar, priced competitively, which helped tea sales over thereview period.

Tea vending machines in India are negligible and are mainly limited to offices, government

institutes and other institutional complexes. This is mainly due to the easy availability of tea

almost everywhere.

Green tea registered a retail volume growth of 12% and value growth of 21% in 2012. This

growth was supported by strong new product development launches in various flavours by the

top players in 2012, as more consumers shifted to green tea. There was an increasing

presence of green tea in different fruit flavours over the review period due to demand from

consumers, with leading brands showing a strong presence in green tea. Prominent green tea

flavours included GAIA Green Tea and Lemon, Golden Tips Of Darjeeling Jasmine, Lipton

Clear Green Tea Mint, Teekanne Green Tea Lemon, Tetley Green Tea Lemon and Honey

and Twinings Green Tea and Mint.

Unpackaged tea is still available in Indian markets. Unpackaged tea accounts for over 45% of

value sales of total tea sold in India according to ASSOCHAM (The Associated Chambers of

Commerce and Industry of India). Unpackaged tea is generally cheaper and is largely sold in

rural India. However, packaged tea sales are gaining ground as consumers have begun

favouring it over unpackaged ones. Packaged tea is available widely across modern retail

chains, as well as in smaller independent grocers. Manufacturers, such as Tata Global

Beverages and Unilever, took steps to increase their presence and distribution in rural regions

over the review period.

COMPETITIVE LANDSCAPE Unilever, with a strong retail value growth of 19%, remained leader of the tea category in

2012. The company accounted for 29% of retail value sales of tea in the country. The

companys Brooke Bond brand was the top selling brand in India with a retail value share of

20% in 2012. The company launched 11 new flavours in tea bags black standard, tea bags

black speciality and green tea for its two prominent brands; Taj Mahal and Lipton. The

success of these new launches aided the company to post strong retail value growth of 19%

in 2012, as compared to the 13% achieved in 2011.

Tata Global Beverages, with a retail value share of 25% retained second place in 2012. The

companys tea range includes four national and three regional brands, such as Tata Tea

Premium, Tata Tea Gold, Tata Tea Agni Dust and Tata Tea Chakra Gold, and its leading

brand, Tata Tea, had a retail value share of 19% in 2012. The company launched new

variants and flavours for its Tetley brand, such as tulsi, elaichi, ginger and aloe vera within tea

bags black standard, tea bags black speciality and green tea. The new launches helped the

company to post strong retail value growth of 20% in 2012 as compared to the 13% attained

in 2011.

Tata Global Beverages has been running a successful campaign known as Jaagore

(meaning Awaken/Arise) since 2010. The campaign took up various issues related to

elections, corruption and the contribution of common citizens to the country and has been

hugely popular among netizens (people active on the internet). The company also integrated

its brand campaigns into the Jaagore campaign and ran television commercials for Kannan


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Devan and Tata Tea Premium brands based on this concept. It also published a book entitled

"India Awakened and listed 25 change agents for society in 2012.

Wagh Bakri, the third-ranked player in tea, registered retail value growth of 24% in 2012. The

company was one of the significant players in Gujarat and Western India. It mainly caters to

the taste of its regional consumers and its tea is competitively priced. Wagh Bakris goodperformance was not just limited to the West India region and states where it has a presence.

Hence it was able to maintain its third position between 2002 and 2012. The company is also

increasing its distribution in Rajasthan, Madhya Pradesh, Maharashtra and Delhi.

Domestic manufacturers continued to play a significant part within tea in India. Duncans

Industries continued to lead the category in the East and Northeast India region. Other

regional players, such as Sapat International, AVT Tea, Amar Tea and Dhunseri Tea,

continued to provide stiff competition to the national players. Unilever was the only prominent

multinational player present in the Indian tea category and continued to be the leader in terms

of retail value sales.

Apart from launches by the top brands Taj Mahal, Lipton and Tetley, a number of new

introductions were undertaken by Twinings for its Twinings brand in 2012. These included

green tea variants, such as Green Tea and Mint, Green Tea and Lemon, Elaichi and Green

Tea Jasmine. A. J. Tea House also launched a number of new products for its GAIA brand

including flavours, such as Green Tea and Ginger and Green Tea and Lemon. Most of these

launches were aimed at the growing base of urban consumers willing to spend and indulge in

different flavours.

Some of the packaging innovations in the tea category included folding carton boxes for Tea

bags, PET jars for premium tea products, such as Lipton and Taj Mahal brands. Some

companies, such as Wagh Bakri, Tata Global Beverages and Unilever, also provided exotic

tea in gift packaging. Although internet retailing of tea is negligible in India, some online tea

stores, such as buytea.com, teaemporium.net, Darjeeling Tea Xpress and Infinitea also

provided the option of gift packing for exotic teas.

Some of the major retailers in the country introduced private label in tea. The leading privatelabel ranges included the Great Value brand from Bharti Retails Easy Day Market and

Future Value Retails Big Bazaar private label offering. Private label is making a mark in the

tea category, although it still had a small presence at 3% of retail value sales in 2012.

Economy brands, which are priced competitively, form the bulk of tea sales in India. The

major tea players, Unilever and Tata Global Beverages, have a number of mass products in

their portfolios, which include Tata Tea Agni, Brooke Bond 3 Roses, Kanan Devan, Tata

Chakra Gold and Brooke Bond Taaza. The prominent premium brands, such as Tetley, Taj

Mahal, Brook Bond Red Label Special, Twinings and Honest Tea, cater to a niche market in

India and do not depend on mass marketing for attracting consumers. Green tea, which is

priced at a premium, is targeted at urban consumers who are willing to spend and are also on

the lookout for indulgence products.

PROSPECTS

Over the forecast period, retail value sales of tea are expected to witness a CAGR of 8% in

constant value terms to reach Rs133 billion in 2017. Premiumisation witnessed over the

review period in the black speciality tea and green tea categories is expected to continue over

the forecast period as manufacturers continue to launch products in these categories. A

number of new flavours and fruit variants were launched in the review period to target

consumers looking for indulgence products. This trend is also expected to continue over the


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forecast period as companies try to differentiate their products from competitors in order to

attract new consumers to their brands.

Tea is projected to grow at a CAGR of 3% in total volume terms over the forecast period. The

forecast growth is in line with the growth witnessed over the review period. Growth is

expected to come from higher demand for tea due to the increased awareness of its healthbenefits. More players are also expected to enter tea in India or increase their presence in

different regions. Consumers will also continue to shift from unpackaged loose tea to branded

tea offerings.

Indian consumers traditionally prefer hot drinks over cola carbonates. Per capita consumption

of tea in India, which stands at 0.32kg per person, is higher than consumption of cola

carbonates, which has a per capita consumption of 1.2 litres per person. The popularity of tea

is increasing as more players enter the market. Growth is expected to be driven by the

expansion of modern retail channels and availability of branded tea products in rural areas.

Over the forecast period, tea is likely to face competition from other hot and soft drinks in

India. There was an increase in demand for health and wellness products over the review

period. Consumers are more health conscious than ever before and are opting for healthy

fruit/vegetable juice, RTD drinks and flavoured soya milk. Demand for coffee also increased in

the same period, driven by increasing awareness of coffee due to various cafs opening up in

different regions of India.

Green tea and black standard tea bags are expected to be the fastest-growing categories

over the forecast period with retail volume CAGRs of 13% and 11% respectively. Increasing

demand for convenience, as well as new product launches by tea manufacturers, is expected

to drive this growth.

Unit prices of tea are expected to continue to grow over the forecast period due to production

issues, inflationary pressures, growing demand, increasing exports and rising input costs.

Price hikes will be more evident in premium tea categories, such as green tea, tea bags black

speciality and tea bags black standard. Price discounting is expected to be minimal as

manufacturers struggle to keep prices under control due to the various price pressures theywill face.

New launches in 2012, which focused on new flavours, such as tulsi, lemon, elaichi, ginger,

aloe vera, cinnamon and citrus variants by Unilevers Taj Mahal and Lipton brands and Tata

Global Beverages Tetley brand, are expected to perform well over the forecast period. These

launches are targeted at urban youth willing to spend on indulgences and health and wellness

products and hence are expected to do well.

In line with the new product launches in 2012, manufacturers are expected to continue

launching products in new interesting flavours in green tea over the forecast period.

Tata Global Beverages Jaagore campaign, which has been running since 2010, is expected

to be taken forward over the forecast period. The campaign takes up various themes,

depending on the mood of the nation, and taps into the underlying sentiments of the country.

CATEGORY DATA

Table 1 Retail Sales of Tea by Category: Volume 2007-2012

Tonnes2007 2008 2009 2010 2011 2012

Black Tea 222,723.6 230,962.5 239,592.1 247,236.3 255,860.1 265,672.1- Black Standard Tea 191,667.9 198,765.5 206,299.5 212,337.3 219,080.8 226,686.9


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-- Loose Black Standard 190,242.4 197,286.3 204,743.5 210,685.8 217,293.8 224,738.5Tea

-- Tea Bags Black 1,425.5 1,479.2 1,556.0 1,651.4 1,787.0 1,948.3Standard

- Black Speciality Tea 31,055.7 32,197.0 33,292.6 34,899.0 36,779.4 38,985.2

-- Loose Black 30,851.7 31,984.2 33,071.2 34,666.6 36,534.5 38,724.9Speciality Tea

-- Tea Bags Black 203.9 212.8 221.4 232.4 244.8 260.3Speciality

Fruit/Herbal Tea - - - - - -Green Tea 3,321.3 3,544.9 3,814.3 4,176.9 4,647.0 5,201.1Instant Tea - - - - - -Other Tea - - - - - -Tea 226,045.0 234,507.4 243,406.4 251,413.2 260,507.2 270,873.2

Source: Euromonitor International from official statistics, trade associations, trade press, company research,store checks, trade interviews, trade sources

Table 2 Retail Sales of Tea by Category: Value 2007-2012

Rs million2007 2008 2009 2010 2011 2012

Black Tea 39,947.1 46,324.2 52,738.0 60,853.1 72,194.5 86,308.6- Black Standard Tea 32,492.8 38,128.0 43,107.8 49,792.0 58,938.4 70,285.5-- Loose Black Standard 31,872.2 37,465.3 42,374.8 48,950.2 57,924.2 69,047.3

Tea-- Tea Bags Black 620.6 662.7 732.9 841.8 1,014.1 1,238.2

Standard- Black Speciality Tea 7,454.4 8,196.2 9,630.2 11,061.0 13,256.1 16,023.1-- Loose Black 7,291.4 8,023.3 9,443.3 10,855.8 13,007.0 15,716.7

Speciality Tea-- Tea Bags Black 162.9 172.9 186.9 205.3 249.1 306.4

SpecialityFruit/Herbal Tea - - - - - -Green Tea 2,965.3 3,163.9 3,403.5 3,777.7 4,509.8 5,459.4Instant Tea - - - - - -Other Tea - - - - - -Tea 42,912.4 49,488.1 56,141.5 64,630.7 76,704.3 91,768.0


Table 3 Retail Sales of Tea by Category: % Volume Growth 2007-2012

% volume growth

2011/12 2007-12 CAGR 2007/12 Total

Black Tea 3.8 3.6 19.3- Black Standard Tea 3.5 3.4 18.3-- Loose Black Standard Tea 3.4 3.4 18.1-- Tea Bags Black Standard 9.0 6.4 36.7- Black Speciality Tea 6.0 4.7 25.5-- Loose Black Speciality Tea 6.0 4.7 25.5-- Tea Bags Black Speciality 6.3 5.0 27.7Fruit/Herbal Tea - - -Green Tea 11.9 9.4 56.6Instant Tea - - -Other Tea - - -


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Tea 4.0 3.7 19.8


Table 4 Retail Sales of Tea by Category: % Value Growth 2007-2012

% current value growth2011/12 2007-12 CAGR 2007/12 Total

Black Tea 19.6 16.7 116.1- Black Standard Tea 19.3 16.7 116.3-- Loose Black Standard Tea 19.2 16.7 116.6-- Tea Bags Black Standard 22.1 14.8 99.5- Black Speciality Tea 20.9 16.5 114.9-- Loose Black Speciality Tea 20.8 16.6 115.6-- Tea Bags Black Speciality 23.0 13.5 88.0Fruit/Herbal Tea - - -Green Tea 21.1 13.0 84.1Instant Tea - - -Other Tea - - -Tea 19.6 16.4 113.8


Table 5 Tea: Standard Vs Pods % Value Analysis 2007-2012

% retail value rsp2007 2008 2009 2010 2011 2012

Pods 0.0 0.0 0.0 0.0 0.0 0.0

Standard 100.0 100.0 100.0 100.0 100.0 100.0Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 6 Tea Company Shares by Retail Value 2008-2012

% retail value rspCompany 2008 2009 2010 2011 2012

Hindustan Unilever Ltd 31.2 30.9 30.6 29.3 29.0Tata Global Beverages Ltd - - 26.2 25.0 25.0Wagh Bakri Ltd 4.5 4.6 4.9 5.4 5.6Duncans Industries Ltd 3.0 3.2 3.4 3.3 3.1Girnar Food & Beverages 1.9 1.8 1.8 1.8 1.8

Pvt LtdAmar Tea Pvt Ltd 1.3 1.4 1.4 1.5 1.5Goodricke Group Ltd 1.4 1.4 1.5 1.4 1.4Twinings Pvt Ltd 1.1 1.1 1.2 1.3 1.3Golden Tips Tea Co Pvt 1.3 1.2 1.1 1.1 1.1

LtdMadhu Jayanti 0.8 0.7 0.7 0.7 0.7

International LtdKho-Cha Darjeeling Tea 0.2 0.2 0.2 0.2 0.2

Bureau


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Tata Tea Ltd 24.7 25.4 - - -Hindustan Lever Ltd - - - - -Private Label 2.3 2.5 2.6 2.6 2.6Others 26.4 25.6 24.4 26.7 26.6Total 100.0 100.0 100.0 100.0 100.0


Table 7 Tea Brand Shares by Retail Value 2009-2012

% retail value rspBrand Company 2009 2010 2011 2012

Brooke Bond Hindustan Unilever Ltd 20.5 20.4 19.8 19.9Tata Tea Tata Global Beverages Ltd - 20.5 19.4 19.4Lipton Hindustan Unilever Ltd 6.3 6.2 5.8 5.8Wagh Bakri Wagh Bakri Ltd 4.6 4.9 5.4 5.6Kanan Devan Tata Global Beverages Ltd - 3.3 3.3 3.4Duncans Duncans Industries Ltd 3.2 3.4 3.3 3.1Girnar Girnar Food & Beverages 1.8 1.8 1.8 1.8

Pvt LtdSociety tea Amar Tea Pvt Ltd 1.4 1.4 1.5 1.5Goodricke Goodricke Group Ltd 1.4 1.5 1.4 1.4Twinings Twinings Pvt Ltd 1.1 1.2 1.3 1.3Golden Tips Golden Tips Tea Co Pvt Ltd 1.2 1.1 1.1 1.1Jay Green Tea Madhu Jayanti 0.7 0.7 0.7 0.7

International LtdTetley Tata Global Beverages Ltd - 0.5 0.5 0.5Kho-Cha Kho-Cha Darjeeling Tea 0.2 0.2 0.2 0.2

BureauTata Tea Tata Tea Ltd 19.6 - - -Kanan Devan Tata Tea Ltd 3.4 - - -

Tetley Tata Tea Ltd 0.5 - - -Agni Dust Tata Tea Ltd - - - -Brooke Bond Hindustan Lever Ltd - - - -Lipton Hindustan Lever Ltd - - - -Private label Private Label 2.5 2.6 2.6 2.6Others 31.5 30.3 32.2 31.6Total 100.0 100.0 100.0 100.0


Table 8 Forecast Retail Sales of Tea by Category: Volume 2012-2017

Tonnes 2012 2013 2014 2015 2016 2017


Tea-- Tea Bags Black 1,948.3 2,134.4 2,349.5 2,598.6 2,887.7 3,224.1




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SpecialityFruit/Herbal Tea - - - - - -Green Tea 5,201.1 5,831.8 6,550.7 7,371.6 8,310.2 9,385.2Instant Tea - - - - - -Other Tea - - - - - -

Tea 270,873.2 281,362.9 292,036.5 302,870.3 313,874.3 325,004.2Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 9 Forecast Retail Sales of Tea by Category: Value 2012-2017

Rs million2012 2013 2014 2015 2016 2017


Tea-- Tea Bags Black 1,238.2 1,417.4 1,662.5 1,972.1 2,375.2 2,880.6



SpecialityFruit/Herbal Tea - - - - - -Green Tea 5,459.4 6,176.8 7,134.1 8,305.2 9,782.6 11,562.8Instant Tea - - - - - -Other Tea - - - - - -Tea 91,768.0 99,187.2 107,128.2 115,527.2 124,250.0 133,244.6

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,trade sources

Table 10 Forecast Retail Sales of Tea by Category: % Volume Growth 2012-2017

% volume growth2016/17 2012-17 CAGR 2012/17 Total

Black Tea 3.3 3.5 18.8- Black Standard Tea 3.0 3.2 17.1-- Loose Black Standard Tea 2.9 3.1 16.7-- Tea Bags Black Standard 11.7 10.6 65.5- Black Speciality Tea 4.7 5.2 28.8-- Loose Black Speciality Tea 4.7 5.2 28.8

-- Tea Bags Black Speciality 7.0 6.7 38.5Fruit/Herbal Tea - - -Green Tea 12.9 12.5 80.4Instant Tea - - -Other Tea - - -Tea 3.5 3.7 20.0


Table 11 Forecast Retail Sales of Tea by Category: % Value Growth 2012-2017


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% constant value growth2012-17 CAGR 2012/17 TOTAL

Black Tea 7.1 41.0- Black Standard Tea 7.1 41.2

-- Loose Black Standard Tea 6.9 39.6-- Tea Bags Black Standard 18.4 132.6- Black Speciality Tea 7.0 39.9-- Loose Black Speciality Tea 6.7 38.3-- Tea Bags Black Speciality 17.6 125.2Fruit/Herbal Tea - -Green Tea 16.2 111.8Instant Tea - -Other Tea - -Tea 7.7 45.2


Table 12 Tea: Forecast Standard Vs Pods % Value Analysis 2012-2017

% retail value rsp2012 2013 2014 2015 2016 2017

Pods 0.0 0.0 0.0 0.0 0.0 0.0Standard 100.0 100.0 100.0 100.0 100.0 100.0Total 100.0 100.0 100.0 100.0 100.0 100.0


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