Battle for the right brew

Font Size

Print

Feedback

Email

Discuss

: Imagine drinking tea from a gold cup. In this day and age. No, that’s not a figment of someone’s fancy. To live that moment, walk down to the nearest super market and pick up a pack of Brooke Bond tea.

Hindustan Unilever Ltd (HUL), India’s largest FMCG company and marketer of Brooke Bond, has unleashed an aggressive consumer promotion to celebrate “the special bond it has enjoyed with Indian households for over 130 years” now. “We have announced a special promotion to reward our loyal consumers by giving away 60 gold cups that are 22 karat gold each and assured prizes worth Rs 15 crore this summer,” says George Kohsey, marketing manager, Brooke Bond.

All in all, a total of Rs 15 crore worth of gifts and 60 gold cups designed by Gitanjali Jewels are up for grabs over the next two months. Consumers can avail of this offer on pack sizes above 100 gm of Brooke Bond teas—Red Label, Taj Mahal, Taaza, and 3 Roses. Cine star Soha Ali Khan and her mother and yesteryears’ actor Sharmila Tagore unveiled HUL’s consumer promotion in Mumbai a few days ago.

To announce its brand new consumer promotion for Brooke Bond, HUL is getting ready to launch a mass media campaign. And to ensure high visibility for its flagship brand, HUL is also looking at in-store advertising in major metros across the country. Interestingly, HUL has also launched India’s first ever Taj Tea Trails, an exclusive tea tasting and appreciation workshop with film star Saif Ali Khan in Mumbai a few months ago.

Arch rival Tata Tea is not sitting on its laurels. Enthused by the response to its Jago Re ad campaign, Tata Tea is now charging ahead to woo tea drinkers across the nation. The company is planning beef up its distribution strategy to reach out to a wider audience this year. As a step in that direction, the company is also taking its retail outlet Chai Unchai outside of Bengalooru.

Chai Unchai is designed as a retail space in the out-of home segment that connects with the youth. The format is cool—neither a kiosk nor a parlour—but with an ambience that is unpretentious and fun. And Tata Tea wants to be the leader in this out-of-home beverage segment. The company plans to initially invest around Rs 20 lakh per outlet, which will be opened in malls, shopping complexes, corporate parks and educational institutions.

“Consumer promotions bring short-term benefits. Our long-term strategy is to connect with consumers emotionally,” says Sangeeta Talwar, executive director, Tata Tea. The Har subah sirf utho mat/Jago re campaign of October 2007 laid the foundation of this strategy. “With that campaign, we had taken the route of social awakening to drive home the benefits of our brands—for the first time,” adds Talwar. “And it had worked very for us well for us.”

If living down its staid image with the new generation was a challenge, fighting fast food brands wooing the crowd with ready-to-drink flavoured teas seems like a battle of wits for tea marketers. Now the fangs are clearly visible and the two national players in the Rs 5,000 crore Indian branded tea industry will use all the weapons in their armoury—including freebies and discounts, accompanied by some slick advertising—to get their points across. They are beginning to focus more on the actual construction of the retail packaging, pushing marketing beyond the typical tea tin or cardboard box.

These players have a good reason to be upbeat. While India’s tea production is estimated to have declined to 940 million kg in 2007 from 957 million kg in 2006, domestic consumption rose to 810 million kg last year from previous year’s 785 million kg.Demand is growing reportedly in response to promotional efforts on the health benefits of tea. Medical research suggests that moderate consumption of tea offers protection against heart and blood vessel disease, some cancers, and bacterial infections, points out an industry observer.

This growing demand has also pepped up local brands such as Wagh Bakri, Good Morning, Society, Girnar, Jivraj and others. “Very soon, the branded tea sector will also witness a major tussle between national and regional players as Wagh Bakri, Duncan Tea, Society and Ganesh Tea are also sprucing up their acts to grab market share,” said an analyst based in Mumbai. With increasing competition, the sector is expected to register a 15% growth this year, predict industry analysts.

Wagh Bakri (Tiger and Goat), the third biggest player after HUL (Brooke Bond and Lipton) and Tata Tea is extending its presence, manufacturing facility and distribution network to make up for lost time. The group’s plan includes retail initiatives, a high-voltage mass media campaign and export initiatives. Says Piyush Desai, chairman and managing director of Wagh Bakri Tea Group, “Our main objective is to become a national player by the end of this year.

We are setting up a new facility at Nadiad (Gujarat) soon.” At present, Wagh Bakri has presence in Gujarat, Rajasthan, Madhya Pradesh and Maharashtra.

According to Desai, the group is planning to foray into southern states as part of its growth strategy. To start with, the group is planning to introduce its flagship brand

Wagh Bakri in Karnataka. To pump up volumes, the group is also hiking its ad budget by 50% this year.

With the tagline Perfect Rishtey Banaye, the company’s print ads have already started appearing in the major dailies in Mumbai. “To support our print ads, we are also beaming television commercials on leading channels,” adds Desai. “We are strengthening our pan-India distribution network along the way.” Currently, the company is exporting its brands to the US, the UK and some of the gulf countries.

In this battle for the consumer’s cuppa, distribution is becoming the major focus area for the various brands. The Rs 2,000-crore Duncans Tea, for instance, has opted for exclusive tie-ups with Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). DTL tea packets will now be available with the LPG suppliers as they go about delivering LPG cylinders at the consumers’ doorstep.

The Kolkata-based company has a distribution tie up with IRCTC (Indian Railway Catering & Tourism Corporation Ltd—the catering arm of the Indian Railways) to serve Double Diamond tea bags to passengers traveling on select routes across the country. “This tie-up will help Duncans Tea tap the huge captive audience provided by the Indian Railways,” says MC Appaiah, COO, Duncans Tea. We are actively exploring innovative channels of distribution. Such tie-ups will help us reach a wider audience base.”

Duncan has also entered into a tie-up with CSD canteens of the Indian Army to cater to the armed forces even at remote locations. “We are offering the Sargam brand at a very low price to the custodians of the nation,” says Appaiah. DTL has a similar tie up with the Central Police Canteen.