Edited excerpts from an interview with Puneet Das, President – Packaged Beverages, Tata Consumer Products, on the sidelines of the first edition of INFUSE’23, the company’s thought leadership initiative bringing media, tech and content leaders on one platform.
The D2C beverage space is seeing a lot of action. Besides marketplace Tata Nutrikorner, where all Tata Consumer Products are available, and other marketplaces, you have a play with TataTea1868.com. What are the other D2C plays within Tata Consumer (Beverages) and which audience does each target? Will all of these co-exist going forward?
Right now, we have 1868 by Tata Tea and Sonnets by Tata Coffee which is a pure D2C play. Tata Sonnets allows us to interact with the consumers of today who are looking for super premium coffee. It helps you build the channel for the future and compete with the other existing D2C offerings.
Nutrikorner is a channel where all the Tata products are available. While Tata products are into many outlets, grocery stores etc., not every outlet can accommodate the entire range of products. Hence, Nutrikorner becomes a showcase for all our offerings and the good part is that the discoverability of new items is going up. Someone who visits our marketplace with an aim to buy Tata Sampann, also discovers that we have a product range in dry fruits. The marketplace and the D2C category helps us to get a lot of insights on shopper behaviour directly, like what is making them visit the site and what is keeping them there etc.
The idea is not to compete with marketplaces, instead to be there where customers are. This is what the future is.
D2C is also about right products and offerings that the consumers online are seeking.
Of course, it is already co-existing. We all will find a balance going forward.
Is marketing a greater challenge with burgeoning competition in the D2C beverage space? Do you see all / most emerging D2C brands being around in the longer term?
So far it is not a challenge. One thing we need to understand is that there is a lot of noise happening in D2C space. They are acquiring customers which comes with a cost. For players like us, we are there for the long run. We are balancing both profitability and customer acquisition.
We have expertise in our categories, hence for us synergies will be far higher. We have a separate D2C team that evaluates the opportunities, evolving of consumers, innovation required to sustain etc. We have a long way to go.
What would you count as the big innovation stories of the last year (or so) for Tata Consumer (Beverages)?
Our innovation pillars have been on health and wellness, convenience and premiumisation. What we have done in the last one and half years is, in the tea category we focused on health and wellness and launched Tata Gold Care which is a variant with natural ingredients. We have launched Tata Tea Chakra Gold Care. We started Tata Tea Ved. We have reformulated the green tea category as well.
In coffee we were into convenience and premiumisation. We launched cold coffee which is a liquid decoction, quick filter coffee where coffee powder can be added in milk to get filter coffee-like taste. Recently we have launched Cafe Special with which you can make cappuccino at home.
The latest we have launched brings the best of flavours from iconic cities. We launched four unique and authentic tasting chai variants as part of Tata Tea Premium Street Chai collection: Kolkata Street Chai, Mumbai Cutting Chai, Purani Dilli ki Mithai Chai, Hyderabadi Irani Chai. The variants are witnessing good traction.
How are you going to promote the Street Chais of India range?
We have launched it in top metros like Bombay, Delhi, Hyderabad, Chennai, depending on the acceptance of the variants we will scale as we go.
In e-commerce, we are getting great business. We are going to take a digital and mass route to promote the products. It is targeted under the premium umbrella.
Between black tea and green tea, black tea is largest in India while green is fastest growing. What’s the adoption as witnessed by Tata Consumer (Beverages)? Which are the leading brands in each?
Tetley is No:2 in the green tea category. Black tea is a fragmented category and is a Rs.30,000 crore market. There are several regional players as well. Unilever and Tata Consumer Products are two national players and between us we have a 40-plus percentage share of the market.
Coffee sales have traditionally been led by South India, with tea dominant in the rest of India. Is this changing? What is your approach?
Sixty to 70 pc of coffee sells in South India. At the same time, tea is also a big category. Tea consumption remains very important in South India.
For us, we have started investing in coffee in the South and will continue to build the category over there. Recently, in November – December 2022, we have also focused on the rest of India. We launched Tata Coffee Grand Premium which is a 100 percent coffee blend with flavour-locked decoction crystals. The non-South markets prefer 100 percent coffee blend whereas in the South markets chicory blend is preferred.
Our focus is to invest in the key South markets and we are expanding. We are also leveraging the distribution strength we have.
For premium offerings, is the profile of buyers also getting younger?
I have recently read that Indian middle classes are continuing to rise up and more and more users are getting into the upper tier. It is not about a younger audience, there is a rise in household income, hence they are able to afford products.
You have ventured into metaverse by hosting a Holi party in 2022. How do you assess brand engagement and ROI? What are the other initiatives you are planning on that front?
We have some KPIs like engagement with the brand, number of users coming in etc. To get an idea, when we did the Holi party, the average engagement the consumer had with us was 18 minutes, which is great. Normally a brand will send out a 30 second or 1-minute message, mostly it will be one way, like a traditional ad. But in a metaverse, you get an average consumer who walks in and spends 18 minutes engaging in the brand environment. It just shows that the potential is huge and of course you need to keep finding the use case and building on them.
Tell us about the media spends in the current environment and role and share of digital.
We are ahead in terms of our digital mix as compared to other brands in the category. That’s because digital these days is an engagement and reach medium. With our hyper local strategy we need to target specific regions or consumers; digital along with advanced technology is playing a bigger role in it. If we take the category of tea as an example, our mix towards digital is increasing year on year, when compared to other players.
TV will remain an important medium for us. These days it is the combination of TV and digital that works and varies from market to market.
Today digital allows you to get into markets like Delhi and Bombay and in some markets we have to use a combination of both TV and digital. It is a question of what the objective of the campaign is and also the market it’s targeted at.
Increasingly, when we speak to marketers across, they are also using a combination of both digital and traditional. If you look at it from a broader perspective, the industry has a simple TV to digital average of 80:20 or 70:30.
