While modern trade and e-commerce are the focused trade channels for Tata Consumer Products for green tea distribution, the company plans to scale up its distribution in top outlets in general trade for better customer reach.
Modern trade and e-commerce play a big role for distribution of green tea as a category, said Puneet Das, president, packaged beverages, India & South Asia, Tata Consumer Products. “But we also need to cater to general trade if we want to become a mass brand. So we have launched the new Tetley green tea variant in top outlets in metros. And as months go by, we’ll keep expanding and adding more and more outlets,” Das said.
Tata Consumer has launched a new variant of its Tetley green tea in Tulsi flavour. The green tea category already has flavours like lemon and honey, ginger, mint and mango.
India is a largely tea consuming country. However, green tea constitutes a very small segment, with only about 2% household penetration in metros and tier-1 cities. However, Tata Consumer believes it is a rapidly growing market and is putting a lot of focus on it.
“…I think there is enough potential to unlock in the metros itself before really expanding to rural areas, where levers and triggers are very different,” Das said.
The company also has an innovation pipeline depending on market trends, but Das said for the foreseeable future, the company will focus on scaling up existing variants.
In the overall beverages market, while there was some softness in the category till the September quarter due to inflationary pressures, especially in rural areas, Das said October saw increased stocking by retailers due to the festive period, and buoyancy was seen in the first 18 days of November. “There are early glimpses of the category trying to come back, but we need few more months to define the trend,” he said.
Tata Consumer reduced prices in the tea category in Q2, but has not done so in Q3 so far.
During the September quarter, Tata Consumer’s India beverages revenue declined 7%, while volumes were down 1% due to price corrections and category slowdown.
