HUL planning to expand tea portfolio in heath & wellness, premium segments

FMCG major Hindustan Unilever (HUL) is planning to expand its tea portfolio in the heath & wellness and premium categories as its sees enough scope of growth in the black and green tea market in the country.

“We have quite a varied and complete portfolio but there are opportunities and there are a few things in the pipeline that will target emerging trends so watch this space for more action”, the company’s vice president of tea and foods business, Shiva Krishnamurthy told Business Standard on the sidelines of a CII event here.

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

In tea, products which address these two trends are green tea, value added black tea with health benefits and premium variants like white tea, sencha, matcha and others.

Recently, HUL launched the matcha tea under the Lipton brand on e-commerce platforms. This tea caters to the niche premium end of the market. 

“There is a lot going on in the top niche of tea and people (company executives and decision makers) have to pick up and choose where there can be a meaningful play. We believe matcha is a trend that we must cater to. And being the global leaders in tea, I think we are best placed to address and cater to many of the key trends”, Krishnamurthy told this newspaper.

On the other hand, besides its premium offerings led by the Lipton portfolio, HUL has also come up with Brooke Bond Natural Care which is the fastest selling value-added tea in the market. 

Krishnamurthy said the growth in green tea, as a category, has been outpacing black tea in India. 

Moreover, contrary to popular belief that the black tea market is on its way to stagnation, HUL is of the view that there is enough headroom for growth in this segment.

“Black tea is growing as much as or rather more than India’s population. There is a massive opportunity to upgrade customers from loose tea to discount tea, then to popular tea and finally to premium tea. I don’t agree to the statement that black tea (market) is saturated”, he told this business daily.

HUL has been the market leader in the organised retail market in terms of value and Krishnamurthy claimed HUL is “miles ahead” than competition. However, in the recent past, it overtook competition to become the volume leader as well.

“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 are volume leaders as well”, he added.

HUL is also open to acquisitions which the company official said, is a trend now.

“Acquisition is always an option and this is a trend also,” he concluded.

In the recent past, Tata Global Beverages, the market leader in terms of volume, signed a deal to acquire the packet tea business of Dhunseri Tea and Industries in a Rs 101 crore deal which has made this Tata Group company the market leader in Rajasthan.

In its current portfolio, HUL’s black tea business is primarily led by Brooke Bond, while green teas are placed under the Lipton brand. Darjeeling tea, although a black tea, is sold under the Lipton brand.