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Tata Tea draws up new global, local plans for branded business

16-November-2004
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Tata Tea draws up new global, local plans for branded business

Tata Tea Ltd would focus more on the branded segment of the domestic and international tea markets to enhance its market share. The company is also planning to enter new markets to spur its topline and bottomline growth in the current fiscal.

Top company officials told an analysts meet recently that Tata Tea has decided to focus on its branded tea business since it gives more margins. Currently, 83% of its total business is coming from the branded business while the share of bulk business in total turnover has come down to just 8%.

Tata Tea has firmed up a strategy to promote its branded tea business which includes strengthening its share in existing market and expanding to new markets. The company has already started selling its products in Europe, Russia and Pakistan. Recently, it has forayed into the South African market.

The company would also working on product innovation in high margin categories to slowly bring down its dependence on black tea. This is because the former is growing at a rapid pace, while the market for the latter has been stagnating for some time.

The new product offering would be in the categories of fruit tea and herbal tea, which accounts for 50% of the global tea market. Flavoured tea and ice tea are the other two categories which the company would be focussing in the coming days.

This is because both the segments are reportedly growing at a much faster pace than the growth in the market for aerated drinks.

The company would also enter the out-of-home tea segment in a big way. This segment is considered to be one of the booming and largest segments for tea products.

Tata Tea, the flagship brand of the company, has a market share of 10.4% in fiscal 2004 up from 7.6% during the previous fiscal.

The new brand strategy is expected to go a long way in enhancing its market share further in the current fiscal.

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