Darjeeling tea is the scotch whisky of India. There is more sold than produced,? quips Suresh Iyer, managing director of Twinings India, the super-premium tea brand. In India, the company packs and markets the musk-flavoured fine tea from the Himalayas, certified by the Darjeeling Tea Traders Association. Such is the exclusivity associated with the $1 billion vintage (1706) brand from the UK?s Associated British Foods stable that the dominant imagery used in all Twinings communication is of??Self-indulgence, ?time for myself?, ?a sensorial journey,? ?time to relish the moments? savour the experience??
Indeed despite the whopping price difference (almost eight times) between Twinings and other tea brands, if it?s been able to cultivate extreme brand loyalty with a handful of tea connoisseurs, it?s through a slew of strategic tie-ups with the likes of Fresh & Honest that caters to the top 100 corporates and is a preferred supplier to leading hotel chains, namely, ITC Hotels, Marriott, Le Meridian etc. In addition, it serves Jet International Airways and the business class travelers of Kingfisher Airlines. Twinings is also available at high-end retail outlets, grocery stores and super markets in over 30 cities. Next on the cards is the chemist/ pharmacy route for green teas and herbal brands, informs Iyer.
?Our brands are strictly reserved for guilty indulgence, only for the closest of family,? says Iyer, who joined the company eight years ago and has watched it grow from Rs 20 crore to Rs 160 crore packaged tea business in just five years (2004-09), especially with the boom in modern trade formats.
Premium tea (priced between Rs 100 and Rs 400 per kg) commands just 25% of the Rs 4,200 crore-branded tea market in India. Super-premium (Rs 400 to Rs 2,000 per kg) is 10%, with Twinings? share (in the super-premium segment) 34% (up from 5% in 2004) in three metropolitan cities (Delhi, Mumbai and Bangalore) that it markets to, according to Nielsen report of May 2009.
The Nielsen data however does not capture out of home (OOH) tea consumption (the premium tea market is split 43:57 between OOH and in home consumption), where Twinings claims a lion?s share. ?Over the past few years, we have expanded our reach through dedicated business to business (B2B) channels,? informs Iyer. It?s also been selective in the choice of these B2B channels in terms of quality footfalls and at least 50% shelf space.
For instance, although the company has strategic tie-ups with Kishore Biyani?s Future Media for wet sampling and branding, such promos are reserved only for select outlets. ?Indeed, you may find us in Spencer?s, but not in Subhiksha,? says Iyer.
Twinings however is not the only brand in this super premium segment. There are several key players above and below it. Right at the top of the pyramid is Typhoo (Rs 1,800 per kg), the celebrated Sri Lankan tea brand Dilmah (Rs 1,500 per kg, that has lately made big forays through tactical price cuts), followed by Tetley Green Tea (Rs 1,200 a kg), Unilever Flavoured Tea (Rs 1,000 a kg) etc. Specifically, in the tea bag category, Twinings has the biggest share of 35%, placing it ahead of both Tetley and Hindustan Unilever. (Tea bags are supposed to keep the freshness and flavour of various blends intact). Health has become a major driver for this category, with green tea varieties growing nearly 100% year-on-year (up from 17% in 2006) in comparison to 40% growth for flavoured tea and 20-30% growth for black tea?the ?routine?, oxidised tea that we continue to drink at home.
?It?s a complete sell-out. Whatever we produce gets sold, so it?s difficult to estimate the demand at the moment,? chuckles Iyer. That is significant growth for a price conscious market like India?green tea is priced almost four times over black tea.
The market is split as follows?black tea 65%, flavoured tea 30% and green tea as well as herbal concoctions made with camomile and peppermint 5%.
It was to tap the growing popularity of green tea that Twinings launched its first Health and Wellness range in 2007 in three variants?one general Green Tea and two herbal teas (Camomile and Peppermint). Recent additions include two more green tea varieties?Green Tea & Lemon, and Green Tea & Mint. At least three more are in the pipeline for 2010. All these variants are priced between Rs 35 and Rs 370 for a kg pack.
Free sampling (Twinings introduced assorted trial packs of 25 tea sachets, especially for the Indian market) through push girls and push boys combined with other below the line (BTL) activities account for 70% of the company?s media spend, that?s roughly about 10% of their sales. The rest 30% goes to trade magazines. ?North America is the only market where we use mass media, in the UK, Australia, France, Italy and Scandinavian countries we are already a household name, and the South Americans virtually survive on us,? says Iyer.
Although India is one of the major producers in the world (nearly 1,00,000 tonnes per annum) our per capita consumption of tea is much lower than that of Ireland or UK, even though 80% of the produce gets consumed at home.
?Lately, with the growth of modern retail formats, the occasions for consumption have grown, almost by 90%,? remarks Iyer. ?The shift in demographics has also helped,? he adds. The target consumer for Twinings is 25-50 years old, with no gender difference.
?Initial customer acquisition is difficult, but retention is exceptionally high for this category,? says Iyer, which is why the company concentrates on distributing free samples to customers at every luxurious touch point.
?Our market is very expertise driven, and blends make all the difference,? says Iyer. Twinings for instance has the biggest portfolio of 200 blends that are hawked in 115 countries. In green tea, it has 30 certified, unique blends.
