Hindustan Unilever beats TGBL to be top tea firm by sales volume

After becoming the leading player in value terms in the tea retailing space, Hindustan Unilever (HUL) has now claimed to have emerged the country’s largest tea company in terms of sales volume in the past few months.

“In terms of value, we are leaders by many miles, and even in terms of volume, we are neck and neck. In fact, in the last three months, we have been volume leaders as well,” HUL’s Vice-President of tea and foods business Shiva Krishnamurthy told Business Standard. 

In the past few years, while HUL, with its more premium portfolio, had secured market leadership in value terms, it has been Tata Global Beverages (TGBL) which has been the market leader in terms of sales volume. 

The Tata Group company, which is undergoing restructuring by merging the consumer business under Tata Chemicals with itself, has been vying to regain its hold as market leader in value terms as well.

Asked about this, a TGBL spokesperson told Business Standard, “According to MAT (moving annual total) for June 2019, TGBL retains clear volume leadership at the all-India level. TGBL is the leader in market share — in volume as well as value — in north and east zones. These zones are two of the biggest tea consuming zones despite aggressive price cuts by competition.”

MAT refers to total sales for a product over the course of the previous 12 months. It is a rolling yearly sum where changes at the end of each month with data from the new month get added to the total and data from the first month of the period is taken away.

Quoting Kantar World Panel, a company engaged in consumer knowledge and insights, TGBL said actual household consumption shows that it continues to have a clear volume leadership in the Indian tea market.

While HUL has been focusing on the premium end of the market, TGBL has been maintaining its focus primarily on the economy segment.

“Leadership is a consequence; the ultimate measure is value leadership. Volume is a rout to value and we have a very premium portfolio,” said Krishnamurthy.

On the other hand, the TGBL spokesperson said, “TGBL is deeply committed to the growth of its business through initiatives. They include our renewed focus on the economy segment by driving upgrades from loose/local tea through Tata Tea Agni and offering consumers value-added variants like Tata Tea Elaichi & Masala.” 

However, even as HUL is readying to strengthen its premium portfolio by focusing on health and wellness as well as the value-added market, TGBL has also started concentrating on the premium end of the market. It recently re-staged Tata Tea Gold and its flagship brand Tata Tea Premium. 

“We are also accelerating growth in the green tea portfolio through our global brand Tetley,” the TGBL official said.

HUL, however, refused to elucidate further on its claim of having secured volume market leadership recently.

Krishnamurthy said HUL is eyeing a “massive opportunity” in black tea as there is a scope to upgrade customers from loose tea to discount tea to popular to premium tea. “I don’t agree to the statement that black tea is saturated. Green tea is growing fast and exploding the market where we are the market leaders again,” he said.

According to Krishnamurthy, emerging trends in the country show an increased consumer preference for the health and wellness category and their desire for indulging in premium products.