Mint - Mumbai

Wednesday, 18 Feb 2009

Page# :6

Size : 430.16 sq.cm. (95.59 col cm)

NEW MARKET

HUL brews Sehatmand tea for entry into economy segment

The firm has already launched its Brooke Bond brand in Madhya Pradesh, Chhattisgarh and Bihar in January
BY SATISH JOHN

satish.j@livemint.com
MUMBAI

h e o w n e r of t h e p r e m i u m Brooke B o n d a n d Lipton tea b r a n d s in In dia, Hindustan Unilever Ltd (HUL), h a s t a k e n a decisive step towards regaining abso l u t e m a r k e t l e a d e r s h i p from Tata Tea Ltd by e n t e r i n g t h e so-called e c o n o m y s e g m e n t of t h e m a r k e t as well. HUL a l r e a d y l e a d s t h e d o m e s t i c tea m a r k e t in t e r m s of value and has been narrowing t h e gap in v o l u m e sales, w h e r e Tata Tea's economy brand Agni, p r i c e d at a r o u n d R s l 5 0 p e r kg, gives it t h e e d g e . HUL l a u n c h e d its Brooke B o n d S e h a t m a n d tea in M a d hya P r a d e s h , C h h a t t i s g a r h a n d Bihar in l a t e J a n u a r y , u s i n g non-governmental organiza t i o n s a m o n g o t h e r c h a n n e l s in a low-profile promotional campaign. "We h a v e p u t p i e c e s in p l a c e for t h e future," Vikram Grover, c a t e g o r y h e a d ( b e v e r a g e s ) at HUL, h a d said in a n i n t e r v i e w o n 13 F e b r u a r y . "It w a s o n e thing that was missing, though we are market leaders and par t i c i p a t i n g in 30% of t h e t e a market." T h e n e w tea, p r i c e d at R s l 7 0 - 1 8 0 p e r kg, i n c l u d e s fo

lic acid, c a l c i u m a n d o t h e r vi t a m i n s as p a r t of its i n g r e d i e n t s . "It is a h u g e issue. A b o u t 60% of t h e p o p u l a t i o n in t h e s e states is u n d e r n o u r i s h e d , " said Grover. "They a r e t a r g e t i n g a differ ent proposition," Sangeeta Talwar, Tata T e a ' s executive d i r e c t o r ( m a r k e t i n g ) , said over the p h o n e on Tuesday. Brooke B o n d S e h a t m a n d ' s h e a l t h i n g r e d i e n t s m i g h t serve as a differentiator, b u t it is a tea m i x t u r e a n d n o t t h e s t r o n g tea t h a t I n d i a n s prefer, s h e a d d e d . "Let's wait for a while a n d see w h e t h e r they'll take

this b r a n d n a t i o n a l . It's n o t easy to e s t a b l i s h tea b r a n d s . " India h a s a b o u t 700 tea b r a n d s c o m p e t i n g for a t t e n tion. At t h e t o p are Tata T e a ' s Tetley, K a n a n D e v a n , C h a k r a Gold a n d G e m i n i b r a n d s a n d HUL's Brooke B o n d a n d Lipton. A c c o r d i n g to r e s e a r c h firm ACNielsen, HUL's s h a r e in t h e tea b u s i n e s s i n c r e a s e d m a r g i n ally in t e r m s of v a l u e to 22.7% in D e c e m b e r , from 22.6% at t h e start of 2008. Tata Tea, w h i c h c o u n t s Tetley a m o n g its p r e m i u m b r a n d s , saw its s h a r e slip to 21.6% from 22.3% d u r -

WHAT'S IN THE CUPPA?

How Hindustan Unilever and Tata Tea stack up.
Market share (in %) Value share Jan

22.6 223 22.7 21.6

Gap increased from 30 basis points in Jan '08 to U0 basis points in Dec '08. Volume share

HL U
I Tata Tea

Dec

Packaged tea category growth (in %) Value growth

22.1

ing this p e r i o d . In t e r m s of a b s o l u t e sales volume, both companies s l i p p e d . HUL's m a r k e t s h a r e in the tea business fell to 18.2% in December from 18.7% in J a n u a r y 2008, while T a t a T e a ' s s h a r e d e c l i n e d to 19.8% from 2 2 . 1 %. D u r i n g this t i m e , t h e pack aged tea b u s i n e s s g r e w by 13.1% y e a r - o n - y e a r c o m p a r e d with 11.3% in t h e p r e v i o u s year, in t e r m s of value, a c c o r d ing to ACNielsen d a t a . In t e r m s of sales v o l u m e s , t h e m a r k e t grew by 8.9% y e a r - o n year, c o m p a r e d with 8.8% t h e p r e v i o u s year. HUL expects Brooke B o n d S e h a t m a n d to c r e a t e a n e w s e g m e n t in t h e 850 m i l l i o n t o n n e s (mt) a year tea in d u s t r y . Of this, p a c k aged tea a c c o u n t s for less t h a n 3 5 0 m t . Both t h e c o m p a nies a r e n o w tar geting t h e loose tea m a r k e t to take a d v a n t a g e of its larger size, a n d a r e eyeing the h u g e re gional tea brands t h a t give t o u g h c o m p e t i t i o n to o r g a n i z e d p l a y e r s . "As o n e m o t o r s d o w n from district to dis trict, o n e finds tea b r a n d s changing in distant t o w n s , " Grover said.

Gap reduced from 340 basis poi; Jan '08 to 160 basis points in Dec 1
Source: ACNielsen

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