Tata Tea plans to take Chai Unchai outlets abroad

After opning its first tea bar Chai Unchai in Bangalore last week, Tata Tea Ltd is looking to take the format to some overseas markets as it tries to grow the so-called out-of-home beverage business in India as well as in other parts of the world where it is present.

“We might look at markets such as Eastern Europe, Africa and South-East Asia to launch similar retail formats. We definitely see demand from these markets where we can establish point of connection with the consumers,” said Sangeeta Talwar, executive director, Tata Tea.

Tata Tea is the world’s second largest branded tea company and international business, largely from Europe, the US and Canada, accounted for around 75% of its revenues of Rs4,025 crore in 2006-07.

However, the company is looking at other, under-served markets for its out-of-home initiative.

“It’s too early to talk about the overseas plans. But the market in the UK does not seem exciting because tea consumption is already on a decline there,” added Talwar.

While there has been a decline in the consumption of conventional black tea in Western markets, there has been a surge in the consumption of black and green tea in Asia, specifically China, India and West Asia, and Russia and its neighbouring countries, says a report by research firm Datamonitor Plc.

Within India, Tata Tea aims to be a leader in the out-of-home beverage segment. The company plans to initially invest around Rs15-20 lakh per outlet; outlets will be primarily be opened in malls, shopping complexes, corporate parks and educational institutions.

“We may even look at specific tie-ups to expand our presence,” said Talwar. And the retail formats abroad could be customized to suit localtastes, the Tata Tea executive director added.

Within India, Tata Tea will face competition from thousands of local tea and snacks vendors, as well as from rivals such as Nestle India Ltd which has rolled out its outlets under the brand name The Cafe Nescafe.

“Nestle anticipated the changing lifestyles of young consumers and pioneeredout-of-home consumption for coffee in an organized manner. It has been developed to increase affordability and availability of beverages that include varieties of specialized coffee, teas and soups,” said Himanshu Manglik, senior manager, corporate communications, Nestle India.