Adil Ahmad, global chief marketing officer, Tata Global Beverages, tells us how tea fits into the health and wellness space

It’s a new kettle of flavours at Tata Global Beverages as the company reinvents tastes and beverage experiences to draw in a younger generation of consumers who want more than just tea in the teapot

There’s a tasting room at Tata Global Beverages headquarters in Mumbai where the range of products is literally mouth-watering. The brands on display describe a sensory journey of the palate across the world, with teas and coffees from India and the UK to Poland and the Czech Republic, to South Africa and the US; the flavours transcribed on the colourful packs range from chamomile and lavender to cookies-and-cream.

“We are the world’s second-largest tea company and we want to lead innovation globally.”

Adil Ahmad, global chief marketing officer, Tata Global Beverages

Most products on display have been launched within the last year or so and represent the innovative thinking that has gone into new product development at Tata Global Beverages. For years, Tata Global Beverages’ well-established tea brands — Tetley and Tata Tea — were primarily black teas. Today, the beverage major is morphing into a company focused on younger generations that are moving away from black teas, and looking for new, more appealing products on grocery shelves, both real and virtual.

Adil Ahmad, global chief marketing officer, Tata Global Beverages, explains why it was imperative to move into new territories. “Tea forms a global and mass scale industry accounting for 23% of ‘share of throat’, ie, everything that’s consumed by a human with the exception of tap water and alcohol. But in terms of value, it corresponds to only 3% of the market. In other words, it has high penetration because it is a cheap beverage. It’s a challenge to grow the market. In comparison, coffee has a 13% share of throat globally and a 6% share of market, which is double that of tea. Coffee is higher up in the value chain.”

To transform tea into a high-value proposition that consumers would be willing to pay more for required a robust innovation journey. “We are the world’s second-largest tea company and we want to lead innovation globally,” says Mr Ahmad. To get the creative juices flowing, the company focused on four key areas: health and wellness, indulgence, ready-to-drink and e-commerce. “All our new product development and R&D focus is based on these areas. We set up cross-functional teams based in India, the UK and the US to drive innovation in these verticals. This has begun to show results. Our innovation graph has shot northwards and we launched a number of new products in the last year and a half. Many of them are doing very well,” says Mr Ahmad.

Feel good products

One of the trends that tea lends itself to very well is the health and wellness trend, and Tata Global Beverages is one of the early movers in this space with a multi-geography release of Ayurveda-based teas. In India, the Ayurveda teas have been launched under the brand name Tata Tea Teaveda. In Canada, the range is called Tetley Balance. “The Balance range has done spectacularly well; it has already grabbed 0.5% of the highly competitive Canada market within a year of the launch, and is still growing,” avers Mr Ahmad.

What really took the market by storm was another innovation – vitamin-fortified teas. Tetley’s Super Teas were launched in the UK as a range of traditional green and fruit teas fortified with vitamins such as B6 and C. The teas don’t just taste good, they also help in boosting metabolism, improving immunity, enhancing mental energy, and so on. “These functional claims are the first in the industry and we pioneered it. In the UK, Super Teas have already taken over 1% of the market, selling 4-5 million pounds, which is an extremely successful launch,” says the marketing head. Tetley Supers became the ‘Product of the Year 2016’ in the UK and ‘Product of the Year 2017’ in the US (in the beverage category). The reason for its success is that it has attracted new users — especially urban youth — into the tea-drinking category. Supers may well go global; it has already entered India and some European markets.

Health may be everyone’s cup of tea, but customers want dessert too, and guilt-free indulgence is an experience that Tata Global Beverages is offering via some choice tea bags. The company came up with the Tetley Indulgence series in flavours such as chocolate mint, cookies-and-cream and spiced apple, thus helping consumers to avoid actual desserts.

The insight for indulgence teas came from observing how consumers enjoyed tea after dinner, along with a dessert or a cookie. Says Mr Ahmad, “The area of indulgence-based products is quite cluttered and all our competitors are present in this space, but our range is doing very well because of the unusual flavours.”

Tata Global Beverages has morphed into a brand that is attractive to young and health-conscious consumers with a slew of exciting new products

The convenience platform

Tetley sells millions of tea bags every day but Tata Global Beverages has, for long, found the ready-to-drink space a challenge. It has not had a successful product in this space, and even its range of iced teas found the market cold. “Ready-to-drink is a very large segment, with its own trends and well-entrenched competition. Our challenge was to come up with differentiated products. We have managed that and have a number of launches coming up this year,” says Mr Ahmad.

The ready-to-drink vertical is being pushed in four different markets with an eye on the strong revenue potential in this space. In Canada, the company is launching iced herbal teas. In India, it is testing Tata Tea Fruski, a fruit-flavoured tea in a single-serve format and at an affordable price point of 12. In Portugal, it is pushing a ready-to-drink Tetley product in a can format.

The rain of new products is not limited to the company’s tea portfolio. Its US coffee brand Eight O’Clock has launched unusual flavours such as lavender and chamomile. The health and wellness focus has translated into the new Infusions range of vitamin-fortified coffees, and products such as Eight O’Clock Breakfast Blend which offer low acidity benefits.

Water is a very small piece of the beverage portfolio but Tata Global Beverages is backing its main water brand — Himalayan — for a global launch. “We have strong ambitions for Himalayan. We believe it has the potential to go global positioned as a source water, similar to Evian and Fiji,” says Mr Ahmad.

new horizons

The spirit of innovation at Tata Global Beverages has spread beyond its new product development function; this year, the company has adopted e-commerce as a new business model, with digital ventures in the US and in China.

In the US, the company decided to dip its toes into online sales through an existing brand called Good Earth, a smallish brand that was present on shelves only in the West Coast. Good Earth was given a makeover, with a new look, packaging, imagery and narrative, and a new range of products — about 40 different 100% organic teas, ranging from black and oolong to iced, fruit and herbal teas. It is now a high-end boutique e-commerce brand, pegged on the proposition of tea discovery made simple.

The company’s other e-commerce venture is in China, where it has launched Tetley in partnership with Alibaba.com. “The China grocery market for tea is huge but we wanted to enter slowly, feeling our way. We also had to tweak our products to comply with the local norms. Having entered China, we are now looking to grow the business,” says Mr Ahmad.

Tata Global Beverages’ spate of new launches has been about getting consumers to see newer (and greater) value propositions in tea. But there is a second and equally interesting aspect to the company’s innovation journey — the need to appeal to a younger generation. And this is what Tata Global Beverages has accomplished through its new range of flavours, ready-to-drink options, healthy beverages, and even the e-commerce platform. “Our new product development focus is on getting younger consumers to reassess Tetley in their minds, to not see Tetley as a brand for the older generation, but one that is modern and innovative,” explains Mr Ahmad. For a brand that has continuously reinvented itself since its launch in 1837, that’s not too much of a challenge.

— Gayatri Kamath