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Sangeeta Talwar

Executive Director-Marketing | 20 Nov 2006

The challenge facing the tea industry is how do we make tea a relevant beverage for the rapidly going-out-of-home segment. Tea as a beverage continues to dominate the in-home consumption, with a penetration of nearly 90 per cent. However, due to lifestyle changes more and more people are spending time out of home and tea is not exactly seen as a beverage on the move. This is the main area that we want to address by developing both superior formats and value.

Sangeeta Talwar, who heads the branded business of Tata Tea, including the global business division, is also on the board of Oriental Hotels Ltd. She began her career with Nestle India in marketing and was instrumental in launching and engineering the success of Maggi brand. She has spent three years in the Nestle headquarters in Switzerland in the coffee, confectionary and biscuits businesses.

Prior to joining Tata Tea, Talwar was CEO of Mattel, handling the South Asian market.

Talwar is an honours graduate in Economics and an MBA from IIM Calcutta. She has over 25 years’ experience in marketing, sales of FMCG brands as well as cross functional exposure as head of sales and HR.

In conversation with exchange4media’s Indrani Sinha, Talwar gives her insight on the tea industry in India today, changing consumer tastes and the challenges facing the tea industry today.

Q. How is the packet tea business doing?

The packet tea business as per ACNielson is showing very marginal growth and is matching the rate of growth of the population. According to Tea Board data, the tea market (both packet and loose) is growing at 3.3 per cent. However, our portfolio has grown by 14 per cent in the year 2004-05 and has shown a growth of 10 per cent in 2005-06.

Q. What is your portfolio like?

Our portfolio comprises both national and regional brands. The national brands include Tata Tea Premium, Tata Tea Gold, Tata Tea Agni and Tetley. Our regional brands are Chakra Gold, Gemini and Kanan Devan.

Q. You seem to have a strong set of regional brands .Comment.

The South market is quite fragmented and regional preferences predominate. We have been able to capitalise on this understanding and launched brands that target relevant segments in key state geographies. This has led to the emergence of strong regional brands.

Q. In view of all the generic promotions of tea by industry bodies today, do you think tea drinking is losing its appeal?

The challenge facing the tea industry is how do we make tea a relevant beverage for the rapidly going-out-of-home segment. Tea as a beverage continues to dominate the in-home consumption, with a penetration of nearly 90 per cent. However, due to lifestyle changes more and more people are spending time out of home and tea is not exactly seen as a beverage on the move. This is the main area that we want to address by developing both superior formats and value.

Q. Do you see flavoured tea catching up in India?

Yes, flavoured tea is one product which is showing more than 20 per cent growth, albeit on a small base. But the way to go would be customising the flavours to Indian palettes (elaichi, ginger, masala, etc).

Q. What other product innovations do you foresee in this beverages category?

The two major areas in which innovations would flourish would be convenience products and specialty products. These would be drawing from the fundamental trends of time scarcity and variety seeking behaviour of today’s consumers. The growing size of hitherto niche markets would accelerate this process and more and more players will join the bandwagon.

Q. Do you have any plans of introducing vending machines like some of your competitors have done?

We already have vending machines through our associate company, Tata Coffee. The vending business is largely driven by them.

Q. How are the coffee bars and fast food joints affecting the tea industry and consumption of tea?

I personally see them as an opportunity which increases the total pie of out of home consumption. How we can leverage them by making tea more amenable to such consumption points is a challenge that needs address.

Q. Does Tata Tea have any diversification plans?

Currently, we are a focused tea company looking at both organic and inorganic growth aggressively.

Q. How has the changing retail environment affected your business?

It has opened up the whole prospect of reaching consumers in a much more interactive format. The importance of packaging and merchandising has assumed new significance. Henceforth, activation efficiencies would be a key driver for business.

Q. Celebrity endorsements seem to be the order of the day with various brands / categories. Your views on this?

Celebrities, when used selectively and integrated with your message, certainly help you cut through the clutter.

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