After 8 years, HUL brew beats Tata Tea

In an interesting tussle for a higher share of the cuppa, Hindustan Unilever (HUL) has regained value leadership in tea from Tata Global Beverages after eight long years. Tata Global, however, continues to lead the market in volumes.
In 2017, HUL’s share in tea inched up to 21.2 per cent from 20 per cent in 2016, while Tata Global’s share slipped to 21 per cent from 21.4 per cent in the same period, said industry sources quoting Nielsen data. In the three months ended January 2018, HUL had a higher share of a little over 21 per cent as compared to Tata Global’s 20.6 per cent share. In volumes, however, Tata Global’s all-India share of about 20 per cent is ahead of HUL’s 17 per cent (see graphic). Value is based on sales while volume is the total quantum sold.

When contacted, an HUL spokesperson said, “Our tea business continues to deliver double-digit growth and we gained market leadership in this category at the end of last year.”

A multi-pronged strategy appears to have worked for HUL in clawing back value leadership in tea. While premium brand Brooke Bond Taj Mahal continues to promote Indian classical music, HUL’s flagship brand Brooke Bond Red Label has been on an inclusiveness drive. It has conducted bold social experiments and sponsored India’s first transgender music band.

Apart from the consumer engagement and communication strategy by its brands, its ‘Winning in Many Indias’ framework has been effectively leveraged in the tea category by executing national equities locally. “As such, the product mix of our national brands is customised to meet local tastes,” said the HUL spokesperson.

A Tata Global spokesperson maintained that the company retains a clear volume leadership at the all-India level “by a significant margin”. “In terms of value market share too, we are very close to HUL. Tata Global is the leader in volume market share as well as value in north & east zones — two of the biggest tea-consuming zones — despite aggressive price cuts by HUL. In west zone, Tata Global is at a similar level to HUL in both volume and value market share,” said the spokesperson.

The spokesperson said the company continues to remain deeply committed to growth of its business through multiple measures. These include renewed focus on the economy end of the market along with driving rural penetration and growth through initiatives such as pushing the value pack portfolio. Tata Global is also promoting the premium end of the market through new launches like Teaveda and accelerating growth in the green tea portfolio. In addition, it wants to build an innovation pipeline as well as invest in core brands across the tea portfolio.

With both HUL and Tata Global becoming aggressive on the marketing front, it could be a close battle for leadership. Over the last four months, Tata Global has shown gains in value market share (20.3 per cent in October 2017 to 20.7 per cent in January 2018). During this period, HUL’s share also inched up from 21.2 per cent to 21.6 per cent.