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TEA BAG GROWTH &TRENDS 2010

FAITTA 28

th

Aug, 2010 New DelhiSACHEN VERMASenior Vice President Marketing JV Gokal & Co. Pvt Ltd


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MARKETERSUNCERTAINTY

IN INDIA TEA BAG IS A VERY SMALL CATEGORY,DOES IT MAKES SENSE TO ENTER IN IT AT ALL ?

WHAT IS SIZE OF THE CATEGORY AND HOW IT IS

CHANGING ?

WHAT ARE THE OVERALL TRENDS IN THEMARKETPLACE IN TERMS OF SEGMENTS, PACKSIZES & FLAVOURS ?

WHICH ARE THE NEW MARKETS TO ENTER ?

SHOULD I BE LOOKING AT SOME NEW

DISTRIBUTION CHANNELS, & INNOVATIVEPROMOTION STRATEGIES ?


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BRAND PRODUCT

CATEGORY

HOUSEHOLDS

IN MILLION

GHARI WASHING POWDER 132

FAIR & LOVELY SKIN CREAM 116

WHEEL WASHING POWDER 110

COLGATE TOOTHPASTE 106

PARLE G BISCUITS 92

PARACHUTE COCUNUT OIL 88LIFEBUOY SOAP 87

HALDIRAM SALTY SNACKS 86

TATA TEA PACKAGED TEA 25

BRAND REACH IN HOUSEHOLDSAC NIELSEN 2009 REPORT


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BRANDED TEA - PENETRATION

State No. of Household(in millions)

Branded TeaPenetration %

Delhi 2.6 m 91%

Ahmedabad 1.0 m 90%

Bangalore 1.4 m 69%

Chennai 1.4 m 72%

Kolkata 2.9 m 20%

Mumbai 3.7 m 72%Hyderabad 1.2 m 59%

Pune 0.9 m 64%


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Major Branded players in the Indian market

350 m kg Packagedtea Market dominatedby HUL & Tata

Sizeable Gapbetween the twoMarket leaders with atotal 40%+ marketshare & the third

player

Strong Regionalbrands in manystates trying hard to

enter new markets


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Tea Bags Usage

Tea bags account for about 12 percent of thevolume of world consumption & in terms of Valueit is much higher

Tea bags Very Popular in Europe, US, CIS,Middle East, Australia & Africa

Tea bags revolutionised tea brewing, Nowvolumes look set to grow as tea drinkers reachfor Convenience,

Innovation & flavours


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Global Tea bagConsumption

UK Germany USA Russia

96%92%

60% 56%


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Tea Bag Share - India

Packet tea

97.5%

Tea bags

2.5%


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Tea bags Statistics

Domestic Consumption 7000 mt/annum

Annual Growth 18 %

Production 16000 mt/annum

Major Thrust by the two market leaders in thetea bag segment


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Tea bag Exports

Exports 8000 mt/annum

Major exporters HUL, JV GOKAL, TataMadhujayanti

Major Exports Market Australia, CIS


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Leading Tea bagBrands

Major brands Tetley, TajMahal, Tata, Twinings,Nestea, Duncan

Regional players likeGirnar, Waghbakri,Jivraj,

Jay, Society alreadyactive in the tea bag

segment

North & West IndiaConsumption is 70% ofthe tea bags Produce


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Value Added Tea bags Flavoured teabags showing 30% growth

annum

Flavoured teabag annual consumption 700mt

Popular flavours - ginger, cardamom, lemon,Earl grey, and Tulsi


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RETAIL CONSUMER PRICE

(200 gm pack in Rs)

103

96

90

Taj Mahal TETLEY NESTEA


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CONSUMER DRIVERS Wellness and convenience - These continue to play

major roles for modern consumers. Consumers arenow well aware for instance of the apparent healthbenefits of black & green teas. Pharma companiesentering

New flavours and functionalities - Todaysconsumers want new flavours, functionality, interestingingredients, and practical packaging that can be taken

anywhere

Convenience and portability - This shift is having anotable effect on tea bags with more intensely-flavoured blends and packaging solutions


15/17

Forecast on Tea bags ICRA Management

Consulting ServicesForecast puts existingmarket size at 7000tons/annum (2009)

Their Forecast is

bullish on teabags -sales to rise to ashigh as 15,400 tonneby 2012-13


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Tea bag Trends Private labels to take a boost with

Modern trade format to grow from150000 Cr in 2010 to 350000 Cr by2013. In 2018 Forecast is 815000

Cr.

Packaging Innovations on their way.Shift from 2 gm to 1.8 gm. Newerformats

Companies now focusing on newproducts in the flavored tea, greentea, specialty tea and herbal infusionsectors


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Appreciate Your Cooperation!

SACHEN VERMA

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