Tea biggies pack a punch during Covid – Times of India

MUMBAI/KOLKATA: Procurement constraints and spiralling tea costs post-pandemic has been a disaster that changed into a possibility for packaged tea gamers.
When costs of the commodity got here to a boil following the lockdown, it hit the unfastened tea market and knowledge suggests that customers transformed to packaged tea. Massive gamers with a various portfolio had been in a greater place to soak up a few of these exterior shocks to handle product pricing higher.
Trade sources mentioned the transferring annual whole (MAT) of the Rs 20,000-crore packaged tea market in worth is rising by round 19% in August 2021, over MAT August 2020. Pre-pandemic, the expansion was round 7% (2019 vs 2018). In-home consumption quantity MAT, in accordance with Kantar family panel, has grown by round 6% in August 2021 over 2020 as towards 2.3% pre-Covid (2019 vs 2018), mentioned these sources.
This has modified the market dynamics too. Each Hindustan Unilever (HUL) and Tata Consumer Products (TCP) gained market shares in each worth and quantity, in accordance with knowledge supplied by business sources. Nevertheless, HUL has gained a management place in quantity (22% in MAT August 2021) and has strengthened its worth management (25% in MAT August 2021) as nicely. Correspondingly, TCP’s shares are at 21% in quantity and 22% in worth for the given interval.

HUL VP (tea & meals) Shiva Krishnamurthy mentioned: “The packaged tea class has grown sooner throughout the pandemic. Our development has been considerably forward of the market. We’ve been market leaders in worth for 3-4 years, and in volumes, we gained a management place extra not too long ago. The nice factor is that post-pandemic, now we have consolidated and strengthened our management and now we have widened the hole versus our closest rivals.”
TCP, which was fashioned in February 2020, started its transformation journey, together with a revamp and enlargement of its gross sales and distribution. “Given this and the aberrations introduced on by the pandemic, the suitable solution to perceive our efficiency within the market can be to match February 2020 worth market share (pre pandemic & TCP formation) to August 2021. We’ve got grown our price market share by 270 foundation factors in accordance with Nielsen and this has come on the again of constructing manufacturers as additionally the quickest distribution development,” mentioned TCP.
Alternatively, witnessing a fall in counter gross sales of round 30% in comparison with its pre-Covid stage, huge unfastened tea retailers in India are logging on, unveiling extra owned or franchised contact factors, taking over social media advertising and reaching out to prospects via tele-calling, Fb, Whatsapp and Instagram and providing tea with promotions and reductions.
Souvari Modak, operational head of Dhrubo Tea Centre, one of many largest-selling tea counters within the nation, believes that high quality enchancment and enterprise effectivity can solely carry again round 10% of the misplaced offline prospects, largely aged ones, who imagine in belief elements. “The remainder 15-20% won’t ever come and follow the simple on-line mode of home-delivered tea. Lack of Covid-safe transport is the prime purpose for this. Complete distribution channel and manpower state of affairs for the offline tea enterprise have gone haywire,” mentioned Modak.
In keeping with plantation main Goodricke, which sells 14 million kg tea yearly in unfastened in addition to packaged codecs, high quality uplift and exclusivity can rein within the fixed dip in demand for unfastened tea. “Consumers are going for packaged tea as a result of they really feel it’s hygienic and has a shelf life. Submit-pandemic the demand for well being and immunity booster teas like ginger, tulsi, turmeric, cinnamon, and many others — that are solely out there in packets — have gone up. Thus, everybody within the packaged tea business and even the unfastened tea retailers have jumped on this well being bandwagon. However packaged tea charges are nonetheless low in India vis-a-vis in numerous different nations,” mentioned Goodricke MD & CEO Atul Asthana.
Within the unfastened tea market, good high quality Assam and Dooars CTC costs had gone up by 10-15% over the last 18 months, whereas Darjeeling orthodox didn’t shine in any respect with simply round 2-5% bounce in charges, business sources mentioned. Costs of unfastened tea, which had gone up throughout the pandemic, have now come down drastically.
“As issues open up and normalise, the supernormal growths could taper. The class is predicted to return again to a normative quantity development of 3-4% yearly. The chance lies in worth upgradation for a similar quantity,” mentioned Krishnamurthy.
As soon as unfastened tea gamers return to the market, would customers return to unpackaged tea? “Usually When customers improve from unfastened to packaged tea, the stickiness is pretty excessive,” mentioned Krishnamurthy.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button