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Industry News

  -Rs 9/kg Chinese teas leave cos jittery

  - Watawala's Zesta Tea, makes inroads into Indian market

  - Tea Board identifies US, Russia and Pakistan as thrust markets

  - Study Suggests Black Tea Helps Prevent Cavities

  - Lipton Tea overhauls its image by eliminating Sir Thomas Mascot


Rs 9/kg Chinese teas leave cos jittery

THE CHINA fever is engulfing everyone. Not that many may have vouched to have to seen these unbelievably priced goods. Yet, the marketplace continues to be mesmerised.

The fear, surprisingly, is more palpable in the tea industry. Chinese teas are now filtering in with considerable ease. A top industry source said, "I have received three samples of Chinese teas from an importer priced between Rs 9-16 a kilogram."

"The tea is probably crap! But there are tea merchants who would not mind using small quantities in blends," he said.

The Indian tea industry today is clearly at cross roads. Globally it has taken a beating from competitors like Sri Lanka and Kenya. Domestically the situation is far from happy.

Although the home consumption is around 650 million kilograms, the annual growth rate is quite sluggish. Claims and counter claims notwithstanding, even the 3 per cent official growth rate looks unachievable.

The final nail in the coffin, of course, is the price line. For the past couple of years, the auction prices have often dwindled to levels never before.

The average prices in the last couple of years tells the whole story. While the average price all-India on a crop of 806 million kgs was around Rs 72, it hit rock bottom in 2000 at Rs 59 a kilogram.

The average price in the last six to seven years has hardly ever fallen below Rs 60 per kilogram. The decline is significant given the fact that there was hardly any carry forward from 1999.

It is not that huge quantities of these Chinese teas will be imported by blenders.

But even small quantities are enough to depress the sentiments already battered by the developments in the recent past.

Tea imports from other than Sri Lanka attracts 70 per cent duty. Even at this stiff rate, the Chinese tea would cost a pittance compared to its Indian cousin.

The Economic Times , May 26, 2001

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Watawala's Zesta Tea, makes inroads into Indian market

Zesta Tea, a brand of teas targetting the niche market and introduced by Watawala Plantations Ltd (WPL) two years ago, have made inroads into the Indian market under the Indo-Lanka Free Trade Agreement, said WPL's Chairman G. Sathasivam, in his review of the Company's performance for the year 2000/2001.

He added that two years ago, the Company launched a programme of value addition and direct marketing which led to the introduction of 'Zesta' tea brand in the premium sector and subsequently another brand called 'Kahata' in the volume market.

'Both brands added value to teas produced by the Company,' said Sathasivam. The two brands are being distributed islandwide through a network of distributors. 'We have planned a promotional campaign, which we believe will drive the brand to greater heights,' he said.

As an extension to this plan, chains of teashops are being opened in a number of exclusive locations, Sathasivam said. A restaurant cum teashop which would cater to the 'discriminating' visitor to Nuwara-Eliya is the latest in the series, he said. This is situated on the Colombo-Hatton road, within Strathdon Estate.

Sathasivam also said that WPL's joint venture partner Tata Tea, India had acquired the world's second largest tea brand Tetley. 'This development has enabled us to foster a commercial link to promote our teas worldwide,' he said.

The Island, May 25 2001

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Tea Board identifies US, Russia and Pakistan as thrust markets

The Tea Board will be focusing on "micro-information" about rival and importing countries in order to accelerate exports and has identified Russia, US, Pakistan and Middle East as thrust markets.

"An interim report on how the board has to go about on production-export-consumption front in 2001-02 has already been prepared and for exports it has zeroed in on Russia, US and Pakistan as thrust markets," official sources said.

They said board's analysis showed that unless micro or minute information on market behavior like variety of tea in demand, its aggressive marketing, counter-strategies of rivals amongst others was available, new markets would not be captured.

A case in point was that of US, which had a huge market of over 85 million kg tea, but mostly in the form of iced and flavoured tea.

Marketing such segments was an expensive proposition but if India went for branding and economies of scale by working on concepts like abroad warehousing, it was feasible they added.

As of now, Argentina was dumping around 32 million kg of its production in the US market, all in branded packs, wherein due to blending, quality was given a go-by, something where India could score.

They said similarly in Russia with reduced per capita income in 1990s, demand had changed from that of high-grade orthodox tea to cheaper crush, tear, curl (CTC) tea.

While India was slow in responding to this subtle change, Sri Lanka moved in with aggressive advertising, branding and timely deliveries of CTC tea variety increasing their share to 40 million kg from five million kg.

Business Standard, 24 May 2001

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Study Suggests Black Tea Helps Prevent Cavities

WASHINGTON (Reuters) - You won't find it served at your dentist's office just yet, but drinking black tea between meals may help reduce cavities and plaque, researchers said on Tuesday.

New studies funded by the Tea Trade Health Research Association found several doses of black tea every day not only reduced plaque build-up but also helped control bacteria.

``We found that the black tea infusion can inhibit or suppress the growth of bacteria that promotes cavities and affect their ability to attach to tooth surfaces,'' said Christine Wu, professor of periodontics at the University of Illinois and lead researcher on one part of the study.

Wu said that while earlier studies in Japan have shown the cavity-fighting benefits of green tea, known for being rich in antioxidants, her team chose to focus on black tea, which is more popular in Western culture.

The research is part of a collaborative study done in conjunction with the College of Dentistry at the University of Iowa and the Institute of Odontology at Goteborg University in Sweden. The findings were presented at a meeting of the American Society for Microbiology in Orlando, Florida.

Dental plaque contains more than 300 species of bacteria that adhere to tooth surfaces and produce cavity-causing acid. Plaque is also a leading cause of gum disease.

A specific element of black tea, polyphenols, killed or suppressed cavity-causing bacteria from either growing or producing acid, according to Wu's study. The tea also affected the bacterial enzymes and prevented the formation of the sticky material that binds plaque to teeth.

Participants in the study rinsed with tea for 30 seconds, five times, waiting 3 minutes between each rinse.

``We were trying to simulate what people did while sipping tea,'' Wu said.

A similar study by Goteborg University, where participants rinsed with tea for one minute 10 times per day, showed comparable results. Both studies showed that the more people rinsed, the more their plaque and bacteria levels fell.

In the University of Iowa study, researchers looked at the impact of black tea's fluoride content on preventing cavities but found the benefits less clear. They exposed pre-cavity tooth changes to black tea but saw little change, suggesting that tea's cavity-fighting ability stems from a complicated reaction between it and bacteria.

``We had very little results, which implies that if tea is having a result in normal use it's not from fluoride,'' said James Wefel, professor and director of the Dows Institute of Dental Research at the University of Iowa.

Of course, to help prevent cavities the tea must truly be ''black,'' without sugar, milk, honey or other additives. Researchers also stressed drinking black tea should not replace traditional oral hygiene.

``Tea will affect the plaque formation but one has to brush their teeth to remove the plaque,'' Wu said. ``It's a must.''

And while black tea may fight cavities, it does not combat tooth stains.

``It is going to stain people's teeth, but at least we know it's good for oral health,'' Wu said.

Reuters, May 23 2001

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Lipton Tea overhauls its image by eliminating Sir Thomas Mascot

TEA wants to get hip, and Lipton, the largest tea marketer in the US, is so desperate for a new image that it is firing the old guy with the china teacup.

In its largest marketing effort in a decade, Lipton is spending $100 million this year to try to get people to think of tea as an alternative to Coke, Pepsi and other soft drinks. New ads from WPP Group's J. Walter Thompson are expected to be introduced this week.

But at Lipton, that isn't enough. The unit of Unilever also has quietly overhauled the look of its boxes and tea packs. In its most daring marketing move, it is eliminating all references to founder Sir Thomas J Lipton, its mascot since the 1890s. "The guy had to go," says Mr John Caron, vice-president at Lipton. "The Lipton brand is known all over the world, but people told us, 'My mother drinks that stuff.' In the world of branding, that isn't a good thing. We have a rich heritage, but it isn't relevant."

That Lipton would give Sir Thomas the boot illustrates the lengths to which marketers must go to freshen the image of a staple. Aunt Jemima, Betty Crocker, Uncle Ben, Morton Salt's girl with an umbrella: All had makeovers. But Sir Thomas was real, a once-famous yachtsman and business tycoon whose likeness couldn't easily be adjusted for broadcast on, say, MTV. Therein lies the problem.

"You couldn't exactly put the guy on Rollerblades," says Mr Michael Lucas, executive director for package design at Interbrand, a brand consultancy owned by Omnicom Group. "Sir Lipton stands for tea, tea in small china cups. Is that where Lipton wants to be in the future?"

These are tense times at Lipton, which has watched its tea, loose and in bags, lose market share for nearly a decade in the face of fierce competition from New Age products like herbal or nutrient-enhanced juice drinks, bottled iced teas and sports drinks. Such drinks are easier to buy and carry around than "flake" tea, which has to be brewed. Americans gulped 182.5 gallons of liquid apiece on average last year, but only seven gallons of tea, according to Beverage Digest, a trade publication. That compares with 53 gallons of soda.

So fierce is the competition that Nestle, the marketer of Nestea and inventor of the "Nestea Plunge," now is putting its marketing muscle behind a syrupy tea concentrate in plastic bottles, which is hitting stores this month. "Just Add Water!" the bottles blare. New ads are set to be unveiled in June.

Lipton successfully branched into the now-hot business of bottled iced tea through a PepsiCo partnership; it now dominates the category. And it brainstormed a tea-bag breakthrough: Researchers tinkered with the tea bags and came up with "cold brew" bags for iced tea. The new product was introduced last year.

Now, J Walter Thompson is trotting out a quirky new fellow based on British comedian Rowan Atkinson's character Mr Bean, to plug cold tea. In square-framed glasses, yellow blazer and ascot, the new mascot, known at the agency as "Tom," strikes poses in Glamour and other fashion magazines, as well as on the Internet. He won't, however, appear on the box.

In one new commercial, a huge crowd riots as police in helicopters and trucks douse the crowd with water to bring them under control. Tom shows up with his glass and tries to capture the water sprayed from a water-cannon truck. Drink Lipton "anywhere there is water," a voiceover says.

Lipton first explored the idea of getting rid of Sir Thomas nearly four years ago, when Primo Angeli, a San Francisco-based unit of Cordiant Communications Group, agreed to design a new box. Top Lipton executives who called the shots at the time weren't ready to give Sir Thomas Lipton the pink slip.

Last year, a new team arrived, and they did research on the matter. They say they were alarmed after focus-group participants told them that the current box looked like something the actress Katharine Hepburn might want to purchase. Lipton's Mr Caron claims some reported that the new box looked like the sort of tea one might find in the grocery-shopping cart of Cameron Diaz or Brad Pitt.

"I guess they got the right group of people with the gumption, for lack of a better word, to revitalise the package," says Ms Lynn Ritts, creative director at Primo Angeli, which created the new box.

The Financial Express , 22 May 2001

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