INTRODUCTION

Tea is a part and parcel of Indian social, economic and cultural life.  Indians cannot think of a

day without their favorite cuppa tea. Tea is the most popular non-intoxicating beverage in the

world enjoyed by the rich and poor alike.

In the early 1980s, the tea industry in India was experiencing rising input and labor costs and
dwindling margins as well as high taxes. India was facing competition on the world market not
just from China, but also from other countries entering the business.

In the 1990s, Tata Tea decided to take its brands into the global markets. It formed an export
joint venture with Britain's Tetley Tea in 1992.

Established in 1837, Tetley was the first British tea company to introduce the tea bag to the UK
in 1953. The tea bag was followed by the first round tea bag in 1989 and the 'no drip, no mess'
drawstring bag in 1997. Tetley now contributes for around two thirds of the total turnover of
Tata Tea.

An important step for Tata Tea was the acquisition of the Tetley Group (based in the United
Kingdom) in 2000.

From 2005 Tata Tea began a restructuring exercise to divest direct ownership of plantations in
India, a process facilitated by subsidised loans from the World Bank's International Finance
Corporation.[5]

In 2007, Tata Tea launched the campaign Jaago Re! to awaken youth to social issues. The
campaign was extemded into 2008. In 2009, their campaign revolve around the issue of
corruption with a new adline 'Ab Se Khilana Bandh, Pilana Shuru'.

The international trade union IUF criticised the company in 2009 for not allowing statutory
maternity leave to pregnant tea pluckers, and for locking out 1,000 workers on the Nowera
Nuddy Tea Estate in West Bengal for so long that the local government began distributing food
coupons for emergency rations to workers and their families

Tata Tea Limited, also known as Tata-Tetley, is the world's second largest manufacturer and
distributor of tea.[1] Owned by India's Tata Group, the Tata Tea Limited markets tea under the
major brands Tata Tea, Tetley, Good Earth Teas and JEMČA. While Tata Tea is the largest tea
brand in India, Tetley is the largest tea company in the United Kingdom and Canada and the
second largest in the United States by volume[2] and JEMČA is Czech Republic's leading tea
company.[3]
OBJECTIVES

Marketing objectives are to:

• Increase market share.

• Generate brand awareness within consumer target market and business target market.

• The road ahead promises plenty. The goal is to move the brand portfolio from its current 19 per
cent value share to a 25 per cent value share in the medium term
Market share

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0
HINDUSTAN LEVER TATA TEA LOCAL COMPANIES

Total tea consumption is estimated at 650 million kg, of which the share of packaged tea is 290 million
kg, which is growing at 1.7 per cent per annum
Problems faced by tat a tea

The case outlines the problems faced by the tea industry due to militancy in Assam. The case explores in
detail the problems Tata Tea faced following allegations that it was funding militants. The case also
presents arguments put forth by the company as well as the Assam government in the debate on
'militant-funding vs. protection payment.

The case is so structured as to enable students to gain an understanding of the special problems faced
by the tea industry in Assam due to the socio-political unrest and terrorism. The case touches upon
social, political and legal aspects of the Assam tea industry

March 27, 2003 | The Asian Age

Tea and more: Tatas set for challenge
Tata Tea Ltd has decided to diversify its business activities to tackle the emerging challenges faced by
Indian tea producers. Tea barons in India had warned that the survival of their industry is threatened by
plunging auction prices, a slump in export and falling quality. Mr V. Venkiteswaran, executive director,
Tata Tea Ltd said: "Though there are signs of revival in the tea industry by the middle of the current
financial year, we are in the process of taking effective steps to face threats which are likely to emerge in
the near future."

Planting medicinal plants with high export value, foraying into the organic tea market, launching iced tea
carrying out cost reduction exercises will be the major steps that the company will take, Mr Venkiteswaran
said. Mr P. Haridas, deputy general manager, research and development, Tata Tea said that there is a
good potential for medicinal plants in the domestic as well as international market.
Analysis of the Indian tea market
In 2007, India was the second largest producer of tea in the world after China. In the same
year, the annual tea production in India was 945 million kg. 24 India was also the fourth
largest exporter of tea in the world, with export volumes close to 178.75 million kg. 25 The
Indian market size for tea in 2007 in terms of retail value was $876.4 million and in terms of
retail volume 226.04 million kg.26 The year-on-year growth rate of the Indian tea market,
for the period 2006-07 in terms of retail value was 3.5% and in terms of retail volume was
2.6%.27 In 2007, per capita consumption of tea in India was 0.7 kg, which is far less than the
per capita consumption of tea in Russia, which was 1.3 kg in the same year. 28 The retail
prices for tea in India are very low. In 2007, the average retail price for tea in India was
$3.9 per kg, which is substantially less compared to the average retail price for tea in Russia
($20.2 per kg) and also to the average global retail price for tea ($13.2 per kg) in the same
year.29
Supply and Demand of Tea: For the period of 2005 through 2008, supply of tea in the Indian
market has exceeded demand. This, combined with the fact that global supply of tea has
also exceeded demand, is the reason for the prevailing low prices of tea in India. Table 4
below gives the supply and demand statistics for tea in India.

Supply and Demand of Tea in India

kg (in millions) Demand (consumption) Supply (production & imports)

2005 757 963

2006 771 1006

2007 786 961

2008 (E) 802 1000

30
: Forecast of Tea Volumes by Sub-Sectors for the Period 2007 through 2012:

Forecast of Tea Volumes by Sub-sectors: 2007-2012

Tonnes 2007 2008 2009 2010 2011 2012

Tea 226,045 231,273 235,790 239,745 243,099 245,822

Black Tea 222,724 227,769 232,111 235,900 239,101 241,683

Green Tea 3,321 3,504 3,679 3,845 3,999 4,139

Competitive Landscape Analysis of the Indian Tea Market: The top five players in the Indian
tea market, namely Hindustan Unilever Ltd, Tata Tea Ltd, Duncans Industries Ltd, Wagh
Bakri Ltd and Goodricke Group Ltd, contributed to more than 60% of the total sales in 2007.
Given below are the names of the major players in the Indian tea market and their
respective market shares.

Market shares of Major Players (as % of Retail Value) 2006 2007

Hindustan Unilever Ltd N/A 32.0

Tata Tea Ltd 22.5 23.8
Duncans Industries Ltd 6.6 6.5
Wagh Bakri Ltd 2.9 2.9
Goodricke Group Ltd 1.7 1.6
Golden Tips Tea Co Pvt Ltd 1.4 1.4
Gimar Food and Beverages Pvt Ltd 1.3 1.3
Twinings Pvt Ltd 0.8 1.0
Jay Shree Tea & Industries Ltd 0.9 0.9
Gopaldhara Tea Co Pvt Ltd 0.7 0.7