Via subsidiary companies, Tata Tea manufactures 70 million kilograms of tea in India, controls 54 tea estates, ten tea blending and packaging factories and employs around 59,000 people. The company owns 51 tea estates in India and Sri Lanka, especially in Assam, West Bengal in eastern India and Kerala in the south. The company is the largest manufacturer of Assam tea and Darjeeling tea and the second-largest manufacturer of Ceylon tea.
Set up in 1964 as a joint venture with UK based James Finlay and Company to develop value-added tea, the Tata Tea Group has now product and brand presence in 40 countries. It is one of India's first multinational companies. The operations of Tata Tea and its subsidiaries focus on branded product offerings in tea, but with a significant presence in plantation activity in India and Sri Lanka.
The consolidated worldwide branded tea business of the Tata Tea Group contributes to around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from bulk tea, coffee and investment income. The company is headquartered in Kolkata. With an area of approx 159 km under tea cultivation, Tata Tea produces around 30 million kg of black tea annually. Instant tea is used for light density 100% teas, iced tea mixes and in the preparation of ready-to-drink (RTD) beverages.
Tata Tea owns five brands in India - Tata Tea, Tetley, Kanan Devan, Chakra Gold and Gemini. The company has a 100% export-oriented unit (KOSHER and HACCP certified) manufacturing instant tea in Munnar, Kerala, which is the largest such facility outside the United States. Tata Tea has subsidiaries in Australia, Great Britain, United States, Czech Republic and India.
Tata's tea plantations in Munnar, India
In the early 1980s, the tea industry in India was experiencing rising input and labor costs and dwindling margins as well as high taxes. India was facing competition on the world market not just from China, but also from other countries entering the business.
In 1983, Tata Tea bought the stake belonging to the James Finlay group to form the individual entity Tata Tea. In the same year, the company decided to move from the commodities business to consumer branding. The first brand Tata Tea was introduced. This was followed by other brands like Kannan Devan, Agni, Gemini and Chakra Gold. In spite of being the largest market in the world, the concept of branded tea took time to be accepted.
In 1987, Tata Tea set up a fully owned subsidiary, Tata Tea Inc., in the USA.
In the 1990s, Tata Tea decided to take its brands into the global markets. It formed an export joint venture with Britain's Tetley Tea in 1992. Other new enterprises included a majority interest in Consolidated Coffee Ltd. (Tata Coffee Ltd.) and a joint venture to manage agricultural estates in Sri Lanka. Tata Tea Inc. in the United States processed and marketed instant tea from its facility in Florida, based on sourcing of instant tea products out of Munnar and Kerala. In 1993, they entered into a joint venture with Allied Lyons PLC in the UK to form Estate Tata Tetley.
In the mid-1990s, Tata Tea attempted to buy Tetley and the Lankan JVC acquired 51% shareholding in Watawala Plantations Ltd.
In 1997 the company was embroiled in a major scandal known as the "Tata Tapes controversy" which related to funds the company provided to the outlawed United Liberation Front of Asom (ULFA), an armed-struggle group operating in Assam.
By 1999, Tata Tea brands had a combined market share of 25% in India. The company had 74 tea gardens and was producing 62 million kilograms of tea a year, two-thirds of it packaged and branded. Towards the end of the year, the tea business was hit by a drought in much of India. In addition, Russia, once the largest buyer of Indian tea, temporarily withdrew from the market.
An important step for Tata Tea was the acquisition of the Tetley Group (based in the United Kingdom) in 2000. It was a 271 million ($432 million) leveraged buyout. Tata Tea reportedly outbid the American conglomerate Sara Lee in what was described as the largest takeover of a foreign company by an Indian one to date. At the time, Tetley was the world's second largest tea company after Unilever's Brooke Bond-Lipton and had an annual turnover of 300 million. It was the market leader in Britain and Canada and a popular brand in the United States, Australia and the Middle East.
Established in 1837, Tetley was the first British tea company to introduce the tea bag to the UK in 1953. The tea bag was followed by the first round tea bag in 1989 and the 'no drip, no mess' drawstring bag in 1997. Tetley now contributes for around two thirds of the total turnover of Tata Tea.
From 2005 Tata Tea began a restructuring exercise to divest direct ownership of plantations in India, a process facilitated by subsidised loans from the World Bank's International Finance Corporation.
In 2007, Tata Tea launched the campaign Jaago Re! to awaken youth to social issues. The campaign was extemded into 2008. In 2009, their campaign revolve around the issue of corruption with a new adline 'Ab Se Khilana Bandh, Pilana Shuru'.
The international trade union IUF criticised the company in 2009 for not allowing statutory maternity leave to pregnant tea pluckers, and for locking out 1,000 workers on the Nowera Nuddy Tea Estate in West Bengal for so long that the local government began distributing food coupons for emergency rations to workers and their families.
In spite of a global presence, the brands are distributed differently depending on the location. As Tata tea is far better known in India and a powerful brand there, it is pushed on this market and countries with a large Indian population. Therefore Tetley is the company's global face and the largest markets focus on the Tetley brand. Where both brands co-exist in one market, Tetley is positioned as the premium brand.
Tata Tea worked with Janaagraha on a voter registration drive, with the campaign name "Jaago re!!" (Wake up!) Following this, the company moved the campaign on to opposing corruption. The Jaago Re website encourages discussion on this and other social issues.
History of tea in India
^ tata.com : Tetley's fiscal show to jazz up Tata Tea results
^ Tata Tea Company Profile
^ : Tetley.com :
^ "Tata Tea sells stake in new plantation firm to IFC" 19 February 2007
^ Tetley/Tata Responds to IUF Support for Hungry Tea Workers in India ... with Public Relations, IUF, 23 Nov 2009
^ Jaago Re! story
Tata Tea official website
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Categories: Tata Group | Tea brands | Beverage companies of India | Companies established in 1964Hidden categories: All articles with unsourced statements | Articles with unsourced statements from June 2009