The "TEA" Tale

I realized that I had not posted a blog till date in the month of September. Partially the fact lies in, that it’s the end of our company’s financial year and we are pretty busy trying to meet the targets.
Besides I was involved in some sort of study in a sector which is totally strange to me – Tea. The fascination for this sector grew mostly thru FM radio reviews.
First let me state some facts about the market and then to the weird reviews which led me to delve deep into this sector.

“The tea market in the Greater Middle East is worth more than three billion dollars. In the GCC, Unilever enjoys 80 percent market share and 90 percent household penetration.”

The amount (volume) of Tea Uniliver (Lipton) sells in UAE is measure in terms of – multiples of the weight of number of Free Willie (Tiger Shark). Before that it was multiples of the weight of number of full grown Elephants. This reports led me to do some research and also find out how “Lipton” can create such a market.

Alcoholic drinks are not freely available in UAE, They are available in Restaurants with permit, but it’s costly. Also due to religious biases people evade alcoholic drinks. The favorite pastime of Arabs which also has percolated to other nationals is smoking “Sisha” or “water pipes”. Along with Sisha – a brewing cup of “Mint Tea”.
Even in restaurants after your meal people will offer you a cup of “Mint Tea”. That’s the local custom here.
The recipe for Mint Tea is quite simple – take a cup of boiling water, put some mint leaves and a tea bag of Lipton Yellow Label and its ready to sip.

Coffee (Arabic/Turkish) is the biggest competitor for Tea and you have another big brand fighting it out – Nestle. But with people becoming more health conscious and doctors advising you to drink Tea which is a lesser Devil among the two, Tea consumption is gaining ground. Some figures:
Tea Bag Consumption – 73% in 2003 to 75% in 2005 while in the same period consumption of Coffee (Traditional) has declined from 61% in 2003 to 57% in 2005. But it’s not that simple – the market share for traditional coffee has been cannibalized by modern/branded coffees & exotic coffees like Cappuccino, moc-ha, etc. with penetration of “Coffee Pubs” like Starbucks, Second Cup, and Costa etc.

Till 2003 sale of loose tea outnumbered the sale of tea bags by 60 to 40. But with repositioning of tea for the middle & high income group the sale of tea bags is gaining prominence. There has been whole lot of product expansions in the tea market, Uniliver alone has 23 varieties under the Lipton brand and each focused to a target group. The promotion also varies.
While Yellow Label tea bag commercial boats of Asian faces the same for Lipton Pyramid targets the local Arabs. In similar fashion Lipton Earl Grey which is focused on the up market segment, the commercial shows a multinational crowd in a Hi Tech office.

Also the theme for the commercial varies – in some it focuses on the energy aspect of the drink while in some it stresses on the “alertness” factor. For Lipton Earl Grey the message is,” It’s cool to drink Tea.”

Aerated Drinks and Juices has started threatening the Tea market in a big way and given the account of summer temperatures in UAE they are sure to make some grounds, mostly as local companies have started selling “Butter Milk” & “Coconut Water” in Tetra packs.

But at least for some time to come Uniliver bosses can comfortably sip on their profits with a cup of “Mint Tea”.