A year and a half after the launch of packet tea, Tata Global Beverages
Ltd (TGBL) associate company Amalgamated Plantations, is planning to treble sales volume this year from this segment which would see its accumulated losses of around Rs. 80 crore coming down.
In the first year of its operations, the company was able to sell around 0.3 million kg (mkg) of tea directly in the retail market which made up for around 1 per cent of its net income.
While Amalgamated Plantations, so far, had limited itself to tea production
and bulk tea manufacturing, it decided to venture into the retail space as margins are considerably higher. In the Guwahati tea auctions, every kilo of tea from this company sells at around Rs. 180, while the same, in the packet tea space, sells at around Rs. 200-230, depending on the tea variant.
On the other hand, the entry of Amalgamated Plantations
into the packet tea space has also opened up direct access to consumers with a preference for specialty teas. Available in limited quantities, such teas sell at around Rs. 400-500 per jar. Currently, it has only two such silver white tea variants from its Hathikuli and Anshi estates.
“However, we will launch a premium variant of the crush, tear, curl (CTC) tea this year which will be priced at Rs. 600. The plan is to first launch it as a single estate tea, and if it becomes a success, we will modify it to include produce from another estate”, Jagjeet Kandal, the company’s managing director told Business Standard.
This tea will be named Majuli Mist and is being sourced from the company’s Majuli garden in Assam.
“We will roll out this tea hopefully in July-August this year after the produce from the May-June period is plucked, packed and labelled. This year, we target to increase sales of our packet teas by three times”, Kandal told this newspaper.
The company has decided to steer clear of territories dominated by its parent TGBL
and is focussing on east and north-east India across 800 outlets.
“Initially we would not enter those markets dominated by TGBL
and would limit ourselves particularly in those areas which are dominated by loose tea. The first idea is to gain market share by converting loose tea customers into buying our branded teas,” he told business daily.
Amalgamated Plantations is planning to treble sales volume this year from the retail segment
If things go according to plan, the company could see its accumulated losses of around Rs 80 crore coming down
Tata Global Beverages (TGBL) directly owns 41 per cent in Amalgamated Plantations
The company hasn’t made any major investments for the new line of business
It has been packing tea for TGBL. The company already has three plants in place
came into being in 2007 after TGBL
(then known as Tata Tea) decided to hive off its plantation business in Assam and West Bengal and instead focus on retail brands.
Although, initially Tata Tea considered exiting the plantation business, it kept control over the gardens by forming two distinct associate companies of which Amalgamated Plantations
is one and Kannan Devan Plantations, based in south India, is the other. Currently, TGBL
directly owns 41 per cent in Amalgamated Plantations.
Apparently, the company hasn’t made any major investments in the new line of business. It has been packeting tea for TGBL
and hence, already has three plants in place which is also now being used for its own tea brands.