Dabur makes an entry into Rs 5,600-crore premium tea market with Vedic tea

Looks to get aggressive in segment dominated by Hindustan Unilever and Tata Tea

Dabur India has entered the Rs 5,600-crore premium tea market with the recent launch of Dabur Vedic Tea, a premium category black tea under the health supplements segment, as it looks to get aggressive in the competitive packaged tea market.

It entered the Rs 19,500-crore tea market back in 2020 with the launch of Dabur Vedic Suraksha tea, taking on leading brands like Brooke Bond Red Label Natural Care, Tata Tea Gold, and Taj Mahal from the stables of Hindustan Unilever and Tata Tea. According to Nielsen MAT data, the packaged tea market is growing at a compound annual growth rate (CAGR) 8 per cent.

“Innovation is critical to our sustained success and we will continue to introduce new products to strengthen our portfolio. We are launching a range of new products to increase our addressable market. We have not only increased our research and development (R&D) spends but we are also ensuring that innovations are targeted and quick to market. Today, new products contribute to 4-5 per cent of our sales,” said Dabur India’s Chief Executive Officer Mohit Malhotra.

Dabur Vedic Tea is available in three stock keeping units — 100 gms for Rs 60, 250 gms for Rs 150, and 500 gms for Rs 295. Dabur is positioning the product at the premium end of the market, which is growing around 15 per cent.

Malhotra said Dabur also plans to enter the loose tea market. He added that the Real Drinks brand, which was launched last year, touched Rs 100 crore-mark in its very first year and is poised to cross the Rs 200 crore mark this year.

“We are also rolling out a series of digital-first products, especially for e-commerce. Our strategy is to use e-commerce as the launch platform for many new-age formats, build up scale here and then roll them out in other channels. Our digital-first brands are also performing well and we are set to cross the Rs 100 crore-mark this year with this portfolio,” he said.

In the premium tea market, the size of the green tea segment is Rs 900 crore and premium loose tea is much larger at Rs 4,700 crore.

The western region contributes 33 per cent to the total premium tea segment with market size of Rs 1,551 crore — Maharashtra contributes Rs 812 crore, Gujarat contributes Rs 584 crore, and Madhya Pradesh Rs 155 crore.

Dabur also launched Hommade Tasty Masala on Monday, which marked its entry into the spices market. Meanwhile, the firm has lined up a few more aggressive launches including honey-based sweets, Ratnaprash sugar-free-based chocolates, and peanut butter in three variants, a new segment altogether, in the coming weeks.