The share of Tata Global Beverages’ (TGB) green tea business in its tea portfolio is set to rise, as consumers increasingly opt for ‘good-for-you’ beverages, Managing Director Harish Bhat told Business Standard.
Currently, the green tea business accounts for about 10 per cent of TGB’s tea portfolio. However, the segment was growing at about 50 per cent a year, far more than the growth recorded by the company’s black tea business, Bhat said. Analysts estimate in the next few years, green tea would account for about 15 per cent of TGB’s tea portfolio.
About 70 per cent of the company’s turnover of Rs 6,631 crore is accounted for by tea, 25 per cent by coffee and two per cent by water. Bhat said the shares of the coffee and water segments would rise to about 30 per cent and 10 per cent, respectively, in the next few years. Though the share of tea would fall to about 60 per cent, green teas would occupy a significant position within the company’s portfolio, Bhat said.
Of the 800-million-kg tea market in India, green tea accounts for five per cent, or 40 million kg, experts say. In the next few years, its share is estimated to touch 160 million kg, or about 20 per cent of the market.
TGB currently has a share of 27 per cent in the green tea segment in India under its Tetley brand. It competes with players such as Taj Mahal from Hindustan Unilever and the UK-based Twinings. Tetley and Twinings, in particular, are fierce competitors especially in urban areas where green tea consumption is growing rapidly. This is not only the case in India, but also in other parts of the world.
Like Twinings, which has rolled out a number of variants in the marketplace in India, TGB has in the last few quarters also launched new products in the space. It has six different green teas in its portfolio at the moment in India. It proposes to take this number up going forward, getting innovations tried and tested abroad into the country. The company is also likely to play around aggressively with flavours within its green tea portfolio, Bhatt said.
In the December 2012 quarter, for instance, TGB launched four new products under the Tetley umbrella in green teas in Canada and the UK. Bhatt said that the pace of launches in green teas would continue to remain high. TGB, for the record, has market leadership in green teas in Canada and is number two after Twinings in the UK.
For the three months ended December 2012 the company reported a 25.28 per cent rise in its consolidated net profit to Rs 80.26 crore on the back of growth seen in value-added teas. Consolidated net sales of the company stood at Rs 1,901.99 crore for the quarter under consideration as against Rs 1,793.20 crore a year ago.