When India wakes up to smell the tea, Marketing & Advertising News, ET BrandEquity

Puneet Das, President – packaged beverages, Tata Consumer ProductsIndia is a predominantly tea-drinking country where the consumption of tea is 15 times greater than coffee (National Sample Survey organisation). Tea drinking is a ritual in every Indian household and is the way many people begin their day. However, the consumption of tea is evolving, influenced by both global and regional trends. As consumers crave better experiences, the ritual of drinking tea is undergoing a transformation.

With a market share of 21% (Nirmal Bang Institutional Equities Research) Tata Consumer Products is one of the largest players in the country. Through its innovative products, hyperlocal marketing initiatives, packaging design, acquisition of Organic India brand and brand positioning via the ‘Jaago Re’ campaign, it has become a force to be reckoned with in the category.

Puneet Das who leads Tata Consumer Product’s beverage portfolio continues to make strong bets in marketing and advertising in pursuit of relentless consumer-centricity. In an exclusive interview with ET BrandEquity for its January 1 edition of the Digital Cover, Puneet Das, president sheds light on the changing tea consumption trends, why bets in hyperlocal marketing are working, and how personalisation is changing marketing for the better.

At Tata Consumer Products, we are focused on driving premiumisation within our portfolio. We align with wellness trends by launching products that offer essential vitamins.Puneet Das

Edited ExcerptsTea is evolving rapidly. Could you shed some light on the trends driving this evolution, and where you see your role in shaping this transformation?
Tea is evolving with key trends reshaping the category. One significant trend is premiumisation. As people travel more, they seek greater variety and unique experiences. This premiumisation is evident not only in terms of flavours but also in the formats of tea products.

Another important trend is the growing demand for wellness through tea. Consumers are increasingly looking for health benefits from their daily cups. Alongside this, there’s a rising preference for natural, plant-based ingredients, with herbal inclusions becoming more popular.

At TCP, we are focused on driving premiumisation within our portfolio. We align with wellness trends by launching products that offer essential vitamins. For example, our new range ensures consumers get a portion of their RDA vitamins in their tea. Additionally, we are introducing Gold Care with natural ingredients. These innovations shape our premium offerings and meet evolving consumer preferences.

Who are the primary consumers of tea, and do you observe distinct consumer cohorts within this group?
In India, tea is deeply ingrained in daily life and holds a unique place — it’s almost like water. While there’s still room for growth in branded tea, tea itself is consumed by nearly everyone. Most of us start our day with a great cup of tea. Given the vast population, it’s natural to see various consumer cohorts emerging. One consistent group comprises essential, basic, daily tea drinkers, who remain steady in their habits and preferences.

Is the premiumisation you mentioned occurring in specific regions or pockets of the country?
Yes, premiumisation is primarily happening in urban areas, especially among well-travelled consumers. These individuals are more aware of and accustomed to diverse experiences. In the overall food and beverage space, we see a growing number of variety-seeking consumers who want both taste and wellness. This trend is now entering the tea category as well. While currently more noticeable in urban areas, we believe it will soon reach a wider audience. Like most trends, it typically starts in urban pockets before spreading more broadly.

Where do you see the next wave of growth coming from? Will it be the non-branded tea consumers shifting towards branded tea, or those at the top of the pyramid seeking premium options?
It’s both. In India, opportunities exist at both ends of the pyramid. As the middle class ascends, there’s definite potential at the top of the pyramid. However, a sizeable population at the mass level also represents an opportunity. Historically, tea has always been a driver of growth in India, and the preference for local tea will likely persist for some time. At TCP, while we focus on premiumisation, we also see ample opportunity at the mass level.

Are we replicating global trends, or are we setting them in terms of tea consumption?
Given the sheer size of the country, the trends here are quite specific to India. However, at the upper end, some trends are more Western, such as the demand for natural ingredients and flavoured teas. These trends, which originated in Western markets, are now making their way here. That’s why we also have a brand like Organic India, which leverages these industry trends to cater to local consumers.

We take pride in being the first mass FMCG player to embrace hyperlocal strategiesPuneet Das

Green tea was once perceived as helpful for weight loss, and now it’s all about detoxification. Is that something you see happening a lot?
Yes, green tea as a category has been driven by the need for weight management rather than just weight loss. Detoxification is also a significant factor, tied to overall health management. There’s growing awareness around health trends, particularly in the food and beverage sector.
Initially, green tea saw modest growth in specific pockets, but the category gained traction as more varieties were introduced, such as tulsi green tea and other flavoured options. Today, we even have green teas with added benefits, and these trends continue to drive the market.

In a diverse market like India, hyperlocal strategies play a key role. How important is the regional narrative for you?
We take pride in being the first mass FMCG player to embrace hyperlocal strategies. India has a highly localised palate, with taste preferences changing every 100 kilometres. Yet, we all love our staples like chole bhature. Tea is similar. At TCP, our USP focuses on catering to regional tastes. For example, Tata Tea Premium is called ‘Desh Ki Chai’ because we offer blends tailored to local preferences. From Odisha to Mumbai, each blend is unique.

We’ve also customised packaging in 10 states to reflect local pride and preferences. For instance, Assam Chai caters to Delhi, Damdar Chai to UP, and Kadak Chai to Odisha. Beyond taste and packaging, we focus on region-specific communication. Even during national holidays like Republic Day and Independence Day, we run hyperlocal campaigns to celebrate the nation’s diversity.
Puneet Das, Tata Consumer Products
Personalisation is everywhere now, and there’s a sense of FOMO if brands don’t adopt it. What’s your take on hyper-personalised campaigns? Gartner mentions that many brands are moving away from personalisation due to ROI concerns, what’s your perspective?
It’s about the return on objectives (ROO), not just ROI. Marketing is about engaging consumers, each of whom has distinct preferences. Technology now enables us to tailor messaging to these individual preferences. While hyper-personalisation may not always be financially efficient, it is highly effective.

For example, Tata Tea Gold encouraged consumers on Mother’s Day to upload photos with their mothers, which we then printed on personalised tea packs. These packs became cherished keepsakes, adding value beyond just the tea.

We also used AI to create customised tappas for Lohri. Collaborating with Shehnaz Gill, we allowed consumers to personalise folk songs and videos for the festival. These campaigns exemplify how personalisation enhances consumer engagement.

Is AI helping you redefine the marketing playbook?
Absolutely. Technology, including AI, is evolving every day and helping us in numerous ways. As I mentioned earlier, we’ve leveraged AI for voice recognition, personalisation, and interactive outdoor activities. AI is transforming how we mine data, generate insights, and create content. But ultimately, consumers come first, and technology is simply a tool to serve them better.

Have you ever wished for more data? FMCG players often rely on distribution networks, so as a non-D2C brand, how do you access first-party data?
Our strength lies in our extensive network, which allows us to reach a vast audience. Additionally, we collaborate with D2C players to gain valuable shopper insights, which we use as an innovation hub. Data is available in various forms, whether through distributors or other channels. The key is tapping into it effectively. Technology enables us to mine this data meaningfully, offering new insights into our consumers.

Is media fragmentation forcing you to rethink your budget allocation, considering ROI?
Staying connected with today’s consumers is the priority, and this approach simplifies media allocation. While fragmentation can increase costs, it also provides opportunities for more targeted messaging. For instance, instead of running the same ad everywhere, we create region-specific ads, which are more effective in engaging local audiences.
Puneet Das, Tata Consumer Products, Packaged Beverages
Is awareness still a huge factor in the FMCG market, or is the focus shifting toward driving loyalty?
It’s not about choosing between building brand equity and performance marketing—they complement each other. Performance marketing may deliver short-term results, but building brand equity fosters long-term trust and loyalty. Depending on a brand’s lifecycle, you need to balance both strategies to achieve sustainable growth.

How are you retaining the heritage of your successful iconic campaigns like “Desh Ka Garv” or “Jaago Re”?
When Jaago Re launched in 2007, it turned a simple idea—waking up—into a powerful social message. Today’s generation expects purpose-driven communication, and Jaago Re continues to address relevant issues like voting, gender equality, and climate change. For example, last year’s campaign on World Environment Day used nursery rhymes to highlight climate change, resonating widely with audiences. Over the years, Jaago Re has evolved by staying relevant and addressing contemporary issues.

Is a campaign like Jaago Re more about branding or performance?
Jaago Re is primarily about building brand purpose. Purpose-led campaigns are crucial today, and digital platforms allow them to sustain longer. For example, our nursery rhyme campaign not only spread the message but also strengthened brand engagement. Such campaigns demonstrate that we are serious about the issues we stand for, even before consumers demand it.

How is the relationship between clients and agencies changing? Are agencies adapting to modern techniques, or are newer types of agencies filling the gap?
Everyone is evolving. We are fortunate to work with like-minded agencies that are open to exploring innovative solutions. An open and collaborative mindset is crucial in today’s ecosystem. Rather than seeing new technology as intimidating, we view it as an opportunity to enhance outcomes.

As high as 70% of consumers prefer sustainable products. What’s your take on sustainability?
Sustainability is becoming a non-negotiable expectation from consumers. From a marketing perspective, we’ve actively addressed climate change and other sustainability issues. However, building an ecosystem to support genuine sustainability takes time. It’s the need of the hour, and brands must rise to the challenge.

What do you see as the next big disruptor in the FMCG marketing space, and how are you preparing for it?Generative AI is the next big disruptor. While earlier technologies were often too complex or lacked clear use cases, AI is already reshaping the industry. It’s revolutionising data mining, content generation, and media efficiency. We are investing in this space, building use cases, and collaborating with partners to stay ahead. AI will redefine every aspect of marketing in the future.

• Published On Jan 9, 2025 at 09:42 PM IST

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