Procurement constraints and spiraling tea prices post-pandemic has been a crisis that turned into an opportunity for packaged tea players.
When prices of the commodity came to a boil following the lockdown, it hit the loose tea market and data suggests that consumers converted to packaged tea. Large players with a diverse portfolio were in a better position to absorb some of these external shocks to manage product pricing better.
Industry sources said the moving annual total (MAT) of the Rs 20,000-crore packaged tea market in value is growing by around 19% in August 2021, over MAT August 2020. Pre-pandemic, the growth was around 7% (2019 vs 2018). In-home consumption volume MAT, according to Kantar household panel, has grown by around 6% in August 2021 over 2020 as against 2.3% pre-Covid (2019 vs 2018), said these sources.
This has changed the market dynamics too. Both Hindustan Unilever (HUL) and Tata Consumer Products (TCP) gained market shares in both value and volume, according to data provided by industry sources. However, HUL has gained a leadership position in volume (22% in MAT August 2021) and has strengthened its value leadership (25% in MAT August 2021) as well. Correspondingly, TCP’s shares are at 21% in volume and 22% in value for the given period.