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1. Kartik Lakhotia (09D07034)

Team members

2. Ankur Abhishek (09D07035) 3. Devkishan Chauhan (09007022) 4. Alok Jharwal (09004048)

AnAlysis of mArket of teA

All along, the Indian tea industry has remained content because it remained the largest producer of the commodity worldwide. But unfortunately enough, few years ago it loosened out on the traded value in world market. Now, its strength as a market commodity needs to be redefined again. Increased domestic penetration should be balanced with an upsurge in exports. It’s time this industry can retain its earlier dominant global position.

In search of new segments Tea happens to be the second most widely consumed drink worldwide after water. Spreading across a wide spectrum of product forms, it offers large range of varieties and flavours. Today, it has converted from a mere commodity to a branded consumer product. Tea market in India directly employs over 1.1 million people of which 50% are women. Further it is an indirect source of income for approx. 10 million people. Tracking the chronological patterns, there appears to be a distinct demarcation of boundaries in the spatial context between tea treated as a commodity and the commodity used as a raw material.

Market Condition

1. Tata Tea

INDIAN tea has always been a global product. A look at the world export figures indicate this statement. Traditionally, India’s share of tea exports has been over 14 per cent, rising to 17 per cent in 2007. The total turnover of Indian tea market is around 10,000 crores INR with a rise of 7% per annum of which exports constitute 1,800 crores.

share of India’s exports in the world market

There are about 1000 different players in the Indian Tea Market 90% of which are small regional producers. Major brands involved in this market are –

2. Hindustan Lever // convert this into table giving share in market of these companies which need not be true 3. Mcleod Russel but keep in mind that tata and Hindustan lever are biggest. Calculate conc. ratio from that table 4. Dhunseri Tea draw pie chart also//

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Some of the other small players spread all over India are 1. Duncans 2. Goodrick Tea 3. Wagh Bakri 4. Private Label

Tea market is a MONOPOLISTIC type of market. Many brands offering varied varieties of tea(ranging from 100 INR per

kg to 600 INR per kg) are in competition for becoming controller of the market.

These days, competition has intensified and the threat of imports from neighboring islands has made it tougher.

What needs to be looked upon? With the advent of globalization, there is a need to relook at the competitive strengths of the tea industry, both internal and external. There is a strong feeling that industry needs to overhaul itself in terms of efficient lines of production, harness the economics of costs, product innovations and concentrate on value-chains concerning global standards.

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In the short term, the weather may lead to supply shortages, which could push up prices. But they will fall back, as over the long term, supply and demand for black tea will be in balance. However, tea prices have been high generally and "will be high in 2011". The trend should also be seen as opportunity.

The natural thing to do when raw tea price increases is to recover it at the retail level by passing on some of the cost.

Tea price

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Major tea producing areas include South-Asian countries with India and China sharing around 55% of production. Other major areas are covered in Latin America and some parts of Africa.

Tea production

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Percentage of total tea production in 2009

rePort of mAjor comPAnies in indiA

TATA TEA

Tata Tea Premium

Business Description Tata Tea Limited. The Group's principally operates in three segments namely Tea, Coffee and Other Products. The Tea segment engaged in Cultivation and manufacture of black tea and instant tea, tea buying and sale of tea in bulk or value added form.

Tata Tea managing director, SM Kidwai shared his views on the competitive positioning of Indian tea, deterrent government policies and the company's plans to move ahead. After the Tetley deal Tata Tea has grown up to be the largest Tea producing company in India offering varied products under the names of

Tata Tea Gold Agni Tetley Instant Tea Tetley’s Flavoured Tea PRODUCTS

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Company Profile:

2010 Sales: 1,380 crore INR

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No. of Employees: 34,000

Marketing strategy

In spite of a global presence, the brands are distributed differently depending on the location. As Tata tea is far better known in India and a powerful brand there, it is pushed on this market and countries with a large Indian population. Tetley is the company's global face and the largest market focus is on the Tetley brand. Where both brands co-exist in one market, Tetley is positioned as the premium brand.

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Hindustan Unilever Ltd

It is the second largest tea producing company in India and the company with largest share of Beverage market in India. Newly appointed CEO and MD of the company, Nitin Parinjpe has said that the company will

Business Description Hindustan Unilever Ltd. This group operates in large range of consumer products from every sector of F&B to soaps and detergents and cosmetics. The 2 important faces under which it produces tea are Lipton and Brooke Bond.

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continue to focus on volume growth of production in tea sector. The premium brand names of Tea under this firm are as follows Lipton flavored and Instant sachet tea Brooke Bond Taaza Red Label, Green Label, Yellow Label Taj

Bru

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Company’s Profile: Hindustan Unilever Ltd. , Lipton India Ltd. Sales in 2010 : 1,140 crore INR

Marketing strategy

With the launch of new Brooke Bond Tea Council along with its brand new product Brooke Bond Sehatmand and a growth rate in sales of 10.7 % per annum this company is soon to emerge as the largest share holder of tea market in India. Investing good amounts in advertising of its tea brands, this company has an advantage of people knowing much better about its products as compared to Tata Tea. Offering a large variety and large price range this company tries to suit Economic and Luxurious tastes of all people of the country.

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Business Description

Company’s Profile: McLeod Russel India (MRIL)

McLEOD RUSSEL

Sales in 2010 :

MRIL MD Aditya Khaitan said: ''Our current market share in the world's black tea market of 2 billion kg is 4 per cent. We expect to double our market share in the next five years. However, it all depends on whether we get estates at the right prices, which can enhance our profitability.''

Khaitan said, ''Global shortfall of approximately 140 million kg at the beginning of 2010 and strong consumption growth, along with production revival in Kenya and Sri Lanka should stabilise the global prices at last year's level. However, stagnant production in India and carry forward shortage should lead to firmer prices in the country. Tea prices are currently ruling Rs 5 per kg higher than last year in North India. The price of quality tea is higher by Rs 15 per kg,'' he said.

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In 2009-10, MRIL's net sales were up 28.7 per cent to Rs 1,076.8 crore from Rs 828.9 crore in the previous year. The net profit of the company has shot to Rs 240.3 crore in FY10 from Rs88.8 crore in FY09. ''The net profit has surged 171 per cent largely due to improved prices of our tea. In 2009-10, we have been able to sell tea at Rs 137.3 per kg compared with Rs 111 per kg in 2008-09,'' the MRIL MD said No. of Employees: 90,000

Marketing strategy

McLeod Russel India (MRIL), the largest integrated tea company in the world with a 102 million kg annual production aims to emerge a 180-200 million kg company in the next five years, with a turnover of Rs3,000 crore by FY15 and to this end plans to acquire tea estates in Africa, Vietnam and India.

In the current year, the MRIL plans to produce 80 million kg of tea from its estates in India, 5.5 million kg from Vietnam and 16 million kg from its recently acquired gardens in Uganda.

Incidentally, MRIL's Ugandan operations are this year expected to yield cash profits of $11 million while the Vietnamese operations are expected to contribute $1.5 million in FY11.MRIL MD Aditya Khaitan said: ''Our current market share in the world's black tea market of 2 billion kg is 4 per cent. We expect to double our market share in the next five years. However, it all depends on whether we get estates at the right prices, which can enhance our profitability.''

Meanwhile, the company's investment in D1 Williamson Magor Biofuel Ltd, a 50:50 joint venture between group company Williamson Magor & Co Ltd and D1 Oil Plc of UK will see its first crop in next 12 months.

The company entered into a joint venture with the UK-based global producer of biodiesel from renewable energy crops, with an agreement to develop jatropha plantations with farmers in north east India. Around 75000 hectares have been covered as of now, under the plantation project.

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Business Description

DHUNSERI TEA

Company Profile

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2010 Sales: 1,200 crore INR

No. of Employees: 28,000

Marketing strategy

Advertising

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Tea companies have produced many advertising campaigns, including:-

Using various famous celebrities eg. Zakir Hussain, Saif Ali for Taj etc. By campaigning to various cities and offer their free samples of the product. By telling the qualities of their products and specialty.

• From internet (http//:www.welcome-nri.com, websites maintained by Tata Tea, Hindustan Lever and Lipton India and Tea Board of India)

BiBliogrAPhy

• From magazine (business today) • Google

THE END