Amalgamated Plantations Pvt Ltd (APPL) is poised to foray into the market of its parent company, Tata Global Beverages Ltd (TGBL), in the packaged tea business.
After APPL launched its packaged tea in October last year, the company had decided to keep off the markets TGBL operates in and was focused on Assam. This year, APPL expanded its presence in Jharkhand and Odisha and is poised to launch its brands in Uttar Pradesh and other states including the north-eastern part of the country other than Assam, where it is in already.
“The plan was initially we would not enter the markets dominated by TGBL but eventually, as we expand, there will be some overlap. We are exploring how to create the differentiation,” Jagjeet Kandal, managing director, APPL, told Business Standard.
Last year, TGBL launched Chakra Gold Active Plus and Kanan Devan Duet, targeted at the south Indian market.
APPL has three brands: Hattigor Gold CTC tea, a budget brand; Hathikuli Organic tea, which is in the mid-range segment; and Anshi Tea, the premium to super premium brand. Hattigor Gold CTC tea can directly compete with TGBL’s Tata Tea Agni and Kanan Devan brands while the price bracket of Hathikuli Organic tea can be pitted against TGBL’s Tata Tea Gold and several others. The Anshi Tea brand, which comprises products like green tea, flavoured tea and others can directly compete with Tetley, again from the TGBL stable.
However, APPL offers ultra-premium white tea under the Anshi brand, priced at Rs 16,000-18,000 a kg — a segment where TGBL doesn’t operate. This TGBL arm is India’s largest producer of orthodox tea, accounting for 8 million kg annually.
On the other hand, to reduce its dependence on the plantations business, which has been under stress for years, APPL has broached the idea of tea cafes and joints. According to the TGBL Annual Report 2018, two such stores have been opened in Bengaluru. TGBL’s managing director and chief executive officer, Ajoy Misra, said that depending on the performance of these tea joints, this project could be scaled up.
Abneesh Roy, senior vice-president of institutional equities at Edelweiss Securities, is of the view that the retail market is increasingly becoming fragmented and the presence of APPL in markets TGBL operates in will help the parent company to hold on to its market share or expand it.