TATA Tea case study | Today let’s try to know something about Tata Tea which you might not know about.
After water, the most consumed drink in the world is not coffee or juice but tea. 90% population in India definitely drinks tea once a day and some people drink tea 2-3 times a day.
Tata company stepped into this business where many big brands had already made their reputation, yet he tried his luck in this market and today he is the leader in this market. What did Tata do so that we can learn something.
How did Tata Tea start?
In the year 1963, Tata ventured into the tea business and started Tata Finlay Limited in association with Scottish Finlay. Initially, this company used to deal in groceries apart from tea. James Finlay was the owner of this Scottish company. By the year 1984, James Finley decided to close his business from India, at that time Tata had no other option but to handle and run this business.
When Finlay handed over the business to Tata, at that time Tata had 53 bigha 26000 hectare tea farm and Tata was the number-1 company in the world in the production of tea.
Tata also bought Asia Coffee while strengthening its tea business, Asia was the number-2 company in Asia in terms of coffee production.
Till now whatever Tata used to buy and sell was according to the production. Tata tea was not able to make money in this business.
In this tea business, 30% market organization in which international brands had kept their hold and in the remaining 70% market local brands had kept hold, all used to pack and sell tea under their own name.
At that time Darbari Seth used to head Tata Tea. According to him, as things were going on, Tata had come to know that there is more profit in tea sale than in tea production. He thought of a policy to make Tata tea a brand and priced it half of the international brand and slightly above the local brand. His decision worked and within no time Tata’s hold in the tea business became stronger. Tata started completing the process of bringing a tea from the fields, blending it, packing it and selling it, which used to take 8 months, in 16 days. 1991 When it became easy for international companies to come and do business in India, then they had to compete with brands like big brands like Brooke bond, Tetley, and Taj mahal, even then their market share remained intact. In 1996, Tata bought the considered coffee brand and bought Watawala tea farm for 14.57 crores, only this farm’s capacity to grow tea was 1100 crore kg, it was a huge achievement in itself.
TATA Tea Packaging innovations
Tata TEA was very serious about the packing of tea, they experimented a lot with packing so that the customer gets the real purity of the tea. He kept the packing of tea considering the liking and business of the customer. You will get most of the packing in green color, while whatever company was available in the market at that time, some used blue color and some used white color.
TATA Tea Target Segment
Tata made a strategy to make the customer its permanent at 360 degree.
Where Tata tea premium was launched for high profile customers, Tata Tea brought in the low income segment in the market.
The customer of Bihar used to ask for large grain tea, for that Tata tea blend and for the people of Madhya Pradesh, who liked tea made of tea dust, Tata Tea Gold Dust was launched.
In the year 1994, Tata Tea got an offer to buy Tetley, both of them talked about it, but due to some objections and approvals, the deal was not completed.
Again in the year 2000, this deal with Tetley opened again and this time Tata bought Tetley for 1900 crores. Tetley used to make 2000 crore tea bags at that time, which was a huge sale in itself because it was not fully available in the market like India.
56% of his sales were in England and 24% of his sales were in America and the remaining used to sell tea to the rest of the world.
After Tata bought Tetley, it became easy to sell tea to those countries where it did not reach yet. After buying Tetley, it became the world’s No. 1 brand that grows and sells tea. Till now Tetley used to sell tea in more than 40 flavors but did not grow tea. With this deal, both Tata and Tetley companies benefited a lot by sharing their expertise.
Something like this happened for the first time in the deal of Tata-Tetley which has never happened before in the history till date.
- For the first time an Indian company bought a company from a foreign country.
- For the first time a small company bought a much bigger company than itself.
- For the first time, India subjugated an English company by buying it, which had once enslaved us.
After this purchase the businessman of India got courage and after this India bought many foreign companies.
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Today Tata brand has made so much credibility and trust in India and abroad that Tata will never do wrong and Tata brand can never fail.
Because of the same love and respect, the share price of Tata tea has always been giving profit to its investors.
Tata Tea share prices have been increasing continuously from the year 2002 to 2022 with a growth rate, according to the same growth rate we have predicted Tata tea share price in 2023, 2025, 2030 and 2040.
Frequently Asked Questions?
In the beverages business, Tata Consumer Products is the second largest player in branded tea in the world. Our brands include Tata Tea, Tetley, Vitax, Eight O’ Clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand and Vitax.
Tata Tea Gold | Assam teas with Gently Rolled Aromatic Long Leaves | Rich & Aromatic Chai | Black Tea | 500g.
TATA Tea By TATA Group
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