An interview with Sushant Dash, Regional President - India, Tata Global Beverages.
Sushant Dash, Regional President - India, Tata Global Beverages, on all things tea. This interview is part of our Marketers' Special Issue - afaqs!Reporter magazine, June 15, 2017.
The branded tea category continues to grow at three to four per cent in terms of volume.
We see new tea brands in the out-of-home space opening the equivalent of coffee cafes. Though still small, this is a prevalent trend. Small boutique brands are now being sold on e-commerce platforms or at high-end outlets. Mainstream brands are now foraying into the health and wellness space.
The past year has been a busy time for us - we launched Tata Tea Teaveda, Tata Tea Elaichi Chai and Tetley Super Green Teas with a focus on wellness. We launched the Jaago Re 2.0 campaign with a focus on 'Preactivism'. We also consolidated our coffee portfolio.
The challenges remain the same - the unorganised sector, smaller players cutting prices and commoditisation. We need to premiumise our offerings, grow and explore opportunities in new segments like green tea and coffee.
GST (Goods and Services Tax) is another factor that can have an impact. We will need to understand how the implementation of GST will affect trade.
While people continue to consume tea, there are other occasions in the day when they are consuming other beverages. In the past, people only consumed tea. In most cases, it was one cup in the morning and one in the evening and probably a cup or two at work or elsewhere during the course of the day. Now the total number of occasions for beverage consumption has gone up.
And people are now drinking other beverages like juices, carbonated drinks or coffee. So, while tea consumption continues to grow, consumption of other beverages is growing at a faster pace which is resulting in a drop in the share-of-throat for tea. This is due to changing urban lifestyles, growing income levels and an increase in out-of-home consumption.
There is not much of a difference in termsof technology and manufacturing, but climate plays a crucial role because at the end of the day, tea is an agricultural commodity. The environment impacts the input cost which ultimately affects the commodity cost.
In the retail environment, there is not much change besides some growth in out-of-home and boutique brands but this is taking place more in the coffee category as opposed to the tea category.
There is no geographical shift. Demographically, though, consumers are now looking to fulfill different requirements from the beverages they consume - variety, health, fun and convenience. This shift has a direct or indirect impact on tea consumption. For example, growth in the green tea category is a result of older consumers looking for healthier alternatives while growth in out-of-home consumption is driven by younger consumers seeking variety.
Tea is a highly penetrated category with 91 per cent penetration. Therefore, for us, it is not about bringing new users into the category but about gaining share from other players in the category, be it the unorganised sector, smaller players or large, organised players. Product availability and distribution become important here.
I do not think the role of the CMO or marketing head has changed. What has changed are the tools and mediums marketers use to communicate.
With digital, mobile, technology and tools, we get carried away by the latest fad and lose sight of what the consumer wants. That, from a marketing point of view, is very scary. Getting overly obsessed with data, research, numbers and facts is another thing that scares me.
The biggest change is the increase in the amount of digital data due to increasing mobile penetration and internet users in the country. Targeting has become specific and measurable.
Earlier it used to be television, but over the last year and a half, there has been a significant growth of digital. Another critical point of communication is the point-of-sale.
The brand belongs to all its stakeholders including its consumers. The marketer or brand manager only manages the brand. Thanks to the rise of social media, all the brand stakeholders can play an active role. I don't see this as a point of conflict.
As a result of digital, communication is no longer one-sided. To maintain this conversation loop, the creative agency is required to create content that is fresh and current while remaining true to the brand's identity.
Content has now become screen-agnostic and is consumed through various channels. Accordingly, the media planning/buying agency will need to target the consumer in a more specific manner. They now need to think not of a single screen but of multiple screens.