'If you want to win in India, you have to win in many Indias'

Puneet Das is the quintessential FMCG marketer. After working with a string of reputed companies, including P&G, Marico, PepsiCo and (for many years) GlaxoSmithKline, he joined the Tatas in 2017. In 2021, Das was promoted from his role as the head of marketing to the position of president, packaged beverages (India & South Asia).

Das oversees the company’s recent growth initiatives in packaged coffee in addition to the tea portfolio (Tata Tea Premium, Tata Tea Gold, and Tata Tea Agni).

In a conversation with Sreekant Khandekar, Das explains the intricacies of the tea market and why regionalisation – and later, hyper-personalisation – has made such good business sense for the Rs 17,600-crore company.

Sreekant Khandekar: We all believe we know tea because drinking it is such a universal experience in India. Still, what makes the marketing of tea different and unique?

Puneet Das: Before I joined the company, I used to think tea was tea. It’s a brown liquid, and everyone in India has it. Next to water, it is the most consumed beverage, and it has 99% penetration. It's only when you get into it that you realise the amazing intricacies involved.

It is one of the most fragmented product categories in India. According to Nielsen, there are about 600 players in the country – and that doesn’t include the ones in loose tea. In every geography, the tastes and types of tea are different, as is the competition. So, there are a whole lot of nuances that make tea a unique product category.

Sreekant Khandekar: What’s the breakup between packaged tea vs loose tea?

Puneet Das: In terms of value, branded tea would have a 70% share in a Rs 36,000 crore market, and, in terms of volume, its share would be about 60%. The growth is coming from the branded segment.

Sreekant Khandekar: What are the big changes you have seen in consumer tastes since you entered the tea business in 2017?

Puneet Das: Overall, in the food and beverage industry, the consumer movement towards health and wellness has accelerated. This shift has also impacted tea. Therefore, we must provide health and wellness solutions while ensuring that the taste remains uncompromised. This is especially driving the upper end of the market.

Sreekant Khandekar: I can understand the concern in foods, but in tea? That surprises me. Is this a Covid-related trend?

Puneet Das: Covid may have initiated these concerns, but they have been growing even afterwards.

Sreekant Khandekar: What are the strategic priorities for your tea portfolio? For example, is it greater coverage or growth or profitability, perhaps? What is at the heart of the marketing drive?

Puneet Das: Tea is a very mature category. We are two strong national players (the other being Hindustan Unilever), and then there are a bunch of regional companies plus many local players. That's the play of the category. So, it's really about how you consolidate your position, how you increase your share.

At a broad level, in India, there is always opportunity at the top and bottom of the pyramid. At the top, the opportunity lies in premiumisation, and at the bottom, it is in getting consumers to move from loose or unbranded tea to the branded product.

Sreekant Khandekar: Between 2020 and now, your company has grown from Rs 9,600 crore to Rs 17,600 crore. In beverages, where has this growth come from? You have also been pushing hard towards coffee and bottled water. Given that the tea business overwhelmingly dominates the company, isn't it challenging to integrate new initiatives like coffee and water?

Puneet Das: Not really; any multi-category company has to grow all parts of the portfolio. Overall, coffee is about one tenth the size of tea. We are growing coffee at more than 30%. So, the coffee play is like a future core category.

The South has always been a big consumer of coffee, but in the rest of India, consumers have been experimenting with coffee out of home. This trend is making consumers desire the same coffee experience at home. And it is this demand that is fuelling the growth of coffee, especially of the instant kind.

Four or five years back, the South contributed about 60-70% of national sales, but now the breakup between this region and the rest of India is about 50:50.

Outside the South, consumers’ taste palates are not so well formed; therefore, they are more willing to experiment.

So, every part of the portfolio has a different role to play. And the test of a successful business is how well you manage all the parts.

Sreekant Khandekar: There has been a lot of coverage of your localisation strategy, which you adopted about five years ago. Did you adopt this strategy to compete with local brands that offer local flavours? Also, was this primarily a packaging and communication initiative, or has the product itself been localised?

Puneet Das: In food and beverages in India, the palate generally changes after every 100 km or so. Historically, at Tata Tea, we have had blends that cater to local taste preferences. So, a tea brand is competing not just with one other brand but with different brands in different regions. The logic of the entire hyper-localisation strategy was to bring this fact out in both the packaging and in the communication for Tata Tea Premium, our flagship brand.

We all know that if you want to win in India, you have to win in many Indias. Before us, no mass FMCG player had ever attempted a marketing mix curated region by region. The product was distinct. The packaging was distinct. The communication was distinct. And the way in which the media got delivered was distinct.

We started with four regions in 2020, and then, post Covid, we kept up that expansion, and today we have a distinct marketing mix in about 10 regions for Tata Tea Premium.

Sreekant Khandekar: What's the most complicated aspect of this localisation strategy? It is so much easier to sell the same standardised product across India, isn't it?

Puneet Das: It did add a lot of complexity at the backend which we have streamlined over time. But the real task of marketing is to win with consumers. In an ideal world, if you could talk one on one with consumers, that would be perfect.

So, this approach does have its challenges, but the business results and the consumer love that we get more than make up for it.

When we were growing up as marketers, we would have one TVC for HSM (Hindi Speaking Markets), but today, technology allows you to beam your communication down to a pincode level. Today, we have an ad for Delhi, another for Uttar Pradesh, and we are able to make the media choices that allow their delivery.

Sreekant Khandekar: When you look at what technology has allowed you to do, what are you most grateful for?

Puneet Das: The whole journey now is from hyper-localisation to hyper-personalisation. Technology is allowing us to create personalised experiences at a creative as well as a media level. This is the most exciting part. It allows customers to themselves customise our creative. The ultimate goal is to engage one-on-one with consumers, and technology now allows that.

Sreekant Khandekar: When you communicate via the mobile phone, how do you account for the fact that some consumers are more adept with technology or simply have better devices and others don’t?

Puneet Das: The biggest myth is that technology is the prerogative of the privileged. In reality, the biggest revolution that technology is bringing about is at the rural level. That has been our experience. It is the marriage of great insights and technology that will give the ultimate joy.

Sreekant Khandekar: How has this process of regionalisation changed your choice of media over the years?

Puneet Das: Oh, greatly so. Five years back, I would do one campaign and then beam it across on TV or on digital. Today I have an ad for UP which I am running on local channels and supplementing with digital. And in Delhi I can do 100% digital because there it is not just an engagement medium; it is also a reach medium. So, the media mix depends on the level of the market’s development. At an overall level, the contribution of digital media is going up every year.