After Hindustan Unilever (HUL), Tata Consumer Products is the nation’s second-largest manufacturer of branded tea. Over the long run, it anticipates that domestic tea volumes will expand in the mid-single digits as demand stabilizes. According to MD & CEO Sunil D’Souza, the short-term rise in tea volume is expected to range from 2% to 4%, as said during a Wednesday conference call.
The company’s India beverages, which includes tea, reported flat volume growth and 3% revenue growth over the previous year for the March 2024 quarter (Q4FY24). In comparison to the same period last year, beverage volumes in India increased by 2% and revenue by 7% for FY24.
Compared to the pattern observed in prior quarters, D’Souza acknowledged that tea, in particular, showed volume increase of 2-3% in Q4, which was a “bit soft.” For context, consumers have been down-trading to less expensive products in response to inflationary pressures during the past few quarters, including branded tea. According to industry specialists, although tea prices are starting to decline, volumes will probably increase gradually.
Over the past year, Tata Consumer has lost market share in terms of both volume and value, according to market research firm NielsenIQ. According to an investment presentation on the company’s website that included NielsenIQ data, Tata Consumer’s moving annual total (MAT) market share for tea decreased by 30 basis points in volume and 50 basis points in value over the previous year. MAT is the total value of a variable over a 12-month period, such as the sales numbers of a product.
D’Souza asserted that the company’s position in the tea market remained consistent over the period, emphasizing there had been no decline in market share. In response to investor inquiries, D’Souza expressed confidence that they hadn’t experienced any loss in market share in the tea segment, stating they awaited competitive data to provide further clarity on the matter.
In the fourth quarter, the US Regular Black Tea market saw a 2.7% value loss in the international market, while the UK market saw a robust 15% gain. According to D’Souza, the Canadian market also grew, with increases in Canada Speciality Tea of 5.3% and Canada Regular Black Tea of 3.4%.
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