Brand India

November 14, 2012 No Comments Data Dan Bolton

CANACONA, Goa, India

The largest consumer of tea in the world is investing to revive brand India.

India consumes 85% of its tea and is thirsting for not just more, but better quality tea. The goal is to produce teas that are notable for their sustainability, purity, and convenience in quantities that meet the needs of a population that accounts for 28% of the entire globe’s urban growth. Within 10 years, India will be the third largest economy in the world.

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The third international convention of the India Tea Association and the Consultative Committee of Plantation Associations (CCPA) drew the nation’s top tea producers to Goa last week to “Talk Tea in Paradise” and establish a shared vision of brand India.

Delegates to the India International Tea Convention 2012 confronted the difficult issues necessary to regain India’s competitiveness in global export and enhance the lives of more than 1.2 million tea workers and the six million people whose livelihood is tied to tea.

ITA Chairman C.S. Bedi opened the convention with a presentation that stressed the importance of sustainable growth.

Bedi noted that the rising cost of production is inhibiting sustainability. “Rising input and employment costs are major contributors to the cost of production that can be mitigated through improvement of yields in the long run, but only if prices at the farm gate increase,” he said.

Awareness amongst importers, buyers, and consumers of the need to support producers with better farm gate prices will enable long term sustainability of the industry and workers, said Bedi.

He told the crowd that quality improvement and awareness across the value chain “is a necessity” and that integrating the vast quantity of tea produced by small growers “is a priority.”

India’s 200,000 small tea growers (STGs) now account for 26% of total yield, harvesting between 20 and 100 kilos of green leaf a day.  The bulk of their tea is sold through collection agents where the perishable nature of their produce makes them vulnerable to pressures from intermediaries/ buyers/ agents that often leads to price volatility, explained Bedi.

“Consequently, most STGs resort to cost reduction at the expense of quality,” he said.

Government’s Role

Goa Governor B V Wanchoo, in his opening address to the 400 delegates, noted with “satisfaction that tea leaves have drastically changed culture, economics, trade and, if I am not wrong, even politics (of India).”

“Though the Indian tea industry is more than 160 years old, it is vibrant and growing,” he said. “This important industry plays a critical role in our National development hence needs to be protected and promoted in a suitable manner.”

While improving India’s domestic tea market is the primary concern, development of quality tea and expanding the overseas market for Indian tea are important objectives.

“We need to discuss issues like value addition, branding, packaging and chart out direction for the Indian tea industry for the next decade,” said G. J. Ancherill, president of UPASI.

In his opening remarks, India Tea Board Chairman MG VK Bhanu announced Rs 150 crore ($27 million) in government funding for research and development with Rs 20 crore ($3.6 million) earmarked for developing drought-resistant tea clones.

The Tea Research Association and United Planters’ Association of South India have been given the task of working on developing climate resistant clones, said Bhanu.

“A quarter of India’s tea bushes are more than 50 years old,” he said. In some regions the plants are nearing the century mark and no longer provide acceptable yields.

Replanting the nation’s ageing tea bushes is a priority with Rs 350 crore ($65 million) in assistance to enhance overall production which has hovered around 980 million kg while domestic demand has grown by 3% percent leading to tight supply.

The government’s 12th Five-Year Plan, adopted in April, also addresses labor issues on plantations where absenteeism and housing are concerns. The Tea Board allocated R2 200 crore ($37 million) to improve the condition of workers on tea estates, a six-fold increase compared to the previous plan.

He stressed the theme of quality: “‘Tea needs a master’s hands to bring out its noblest qualities’ he cited, quality that begins with care for the soil; the quality of life for workers and a quality auction process.”

Bhanu, who celebrated his first year in office, was warmly received. “We are like family” he told the delegates. “There is a special passion for tea throughout the industry, a passion that makes good friends.”

India’s Opportunity

There will be 240 million teens by 2020 and commercially produced beverages currently account for less than 5% of sales, explained Debabrata Mukherjee, Coca-Cola vice president of strategy & innovation. India is youthful and eager to experience the convenience of cold beverages, he said.

“The image of tea needs to be transformed from merely the traditional to a ‘cool’ drink that appeals to the youth, who represent the future,” observed delegate Vijay Shankar, vice chairman and managing director of J. Thomas & Co., national tea and coffee auctioneers headquartered in Calcutta with branches in five cities including Cochin in Southern India and Coonoor in the Nilgiris.

Tea is linked to old images of India and benefits from updated marketing and packaging strategies.

Today, less than 3 percent of tea is sold in grocery with much tea positioned as a commodity.  To encourage consumption of packaged tea, India’s top brands are aggressively promoting tea on television where tea commercials represent about 4% of paid ads. Campaigns also reach young people online and via mobile phone and radio. New formulations, new packaging and edgy marketing are directed to a middle class that is expected to expand 58%.

One of the most compelling presentations during the three-day convention was a series of multi-media campaigns orchestrated by Ogilvy & Mather, Coca-Cola, Grey Worldwide and Lowe Lintas & Partners. Clients include Brooke Bond Red Label, Tata, Tetley, Kanan Devan and Unilever.

Five years ago, Tata Premium began an innovative use of television commercials to promote social themes in its advertising for Jaago Re. The successful and politically charged evolution of social commentary began with an effort to partner with non-profit NGOs such as Jannagraha, a Bangalore-based NGO that encouraged citizens, especially the youth, to register to vote.

Marketing executives explained that the campaign theme “Awareness” was intended to create a mega brand under Tata Tea – Premium, Agni, Gold and Life.

“We not only wanted to awaken people, but also facilitate the election process through our portal,” said Vikram Satyanath, executive director with Lowe Lintas & Partners.

A more adventurous series of TV commercials followed. These dealt with political corruption, depicting every-day encounters with insight. Five television spots around the same message condemning bribery, scams, and social justice challenged power brokers.

In this , a young man asks a local politician for his credentials. The politician scoffs and the character’s retort is memorable.

Sales accelerated as consumers associated tea with integrity and rewarded brands with double-digit growth.

Another facet is illustrated in this inspirational for Kanan Devan tea, depicting a violinist who overcame her handicap to perform on stage.

Tea is now associated with advocacy.

“I also hold the view that there needs to be much more generic promotion of tea and not just the brands; the milk and egg campaigns in India were highly successful and all stakeholders gained, as a result,” said Shankar.

Health Misconceptions

Misconceptions about tea are being confronted with facts and humor and interactive advertising campaigns featuring top movie and television stars.

Unlike much of the West, tea is viewed with suspicion in India with consumer research showing widespread beliefs that tea is unhealthy; that drinking too much is harmful and that consuming tea in your youth will change skin color to a darker brown.

In one , a prominent actress, Sonakshi, announces that too much tea is unhealthful and her leading man Akshay Kumar,  then turns to the camera and asks viewers to phone and tell her the truth. The campaign, by Brooke Bond Red Label, led 2.5 million loyal fans to call to set her straight.

Dr. Lenore Arab, a professor of Internal Medicine at the David Geffen School of Medicine at the University of California, Los Angeles, presented a notable lecture on the growing body of medical research that tea, whether black or green provides enormous health benefits.

Her presentation on stroke benefits suggests drinking three or more cups of tea per day reduces risk by 21 percent. “It did not appear to matter if the tea was green or black and the data held up with both Asian and non-Asian populations,” she said. “How the tea provides a protective factor is not yet clear” but may be related to lowering blood pressure and reducing inflammation of the inner lining of arteries. The presence of tea in the bloodstream actually diminishes the damage caused by a stroke, she said.

She joking replied that when asked: “When is the best time to take tea?” Her response is “just before a stroke.” Barring that, keeping a high level of tea catechins in the blood is the next best thing.

Delegate Deepak Atral, managing director of Amalgamated Plantations, a Tata Enterprise based in Kolkata, said that for him “the main takeaway from the sessions at the convention is that tea is a healthy drink and has growing acceptance by a large number of consumers around the globe.”

Tastes vary as well as the manner of consumption but given the benefits to health “tea based beverages and products have a good future. Price is not really a barrier for a good cuppa tea.”

“The scientific research by Dr. Arab seems to have firmly established the link between tea and health and I think this should be given the widest possible publicity to the world at large, if it hasn’t been done already,” added delegate Shankar.

Climate Change a Global Threat

Global warming, inconsistent rainfall, dry spells and rising ocean levels are serious impediments.

“This is the major challenge before the tea industry at present,” according to C.S. Bedi.

India produces 23% of the world’s tea, a number in decline from previous decades. Competition from African and Sri Lankan growers has eroded market share in exports but domestic demand is threatened more by warming trends. North Eastern India has experienced decreasing rainfall of 6 to 8% compared to normal for the past 100 years. Prolonged droughts are now followed by less severe droughts and an analysis of 40 years of records sows coastal tides are rising between 1.06 and 1.75 mm per year. Glacial melt in the Himalayas will severely affect discharge in the Brahmaputra River valley where the greatest concentration of tea in the world.

Bedi also notes a “sharp rate of species decline” with fewer butterflies in the garden, few predators, reptiles and birds. There are fewer succulent weeds and more hardy weeds and outbursts of plant species. There are fewer flowers and honey bees with outbreaks of mosquito bugs in Assam and Dooars.

These concerns are best addressed by a focus on quality, soil quality, water quality, the increase of shade and encouragement of natural predators and integrated pest management. India should reduce chemical pesticide and fertilizer use and replenish the soil with organic material. “A new paradigm where workers could partner with management needs consideration,” said Bedi.

The solution, he suggests, is a move “back to nature” that will lead to better quality tea, improved working conditions and higher prices at farm gate for both domestic and exported tea.

“Quality improvement and awareness across the value chain is a necessity,” he said.

Source: IITC2012 Convention Program

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