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Reliance Retail to sell packaged tea
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Saturday, 23 June, 2007, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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RELIANCE Retail has firmed up plans to roll out packet tea under its own private label, Reliance Select. It has just initiated talks with Goodricke Group for entering into an exclusive deal to procure some of the exquisite blends for its brand. Reliance will procure CTC tea from GGL, which are produced at its 12 gardens in Dooars.
The retail major has already initiated test marketing of packet teas in select stores. For this it has procured some tea from the B K Birla group company, Jay Shree Tea & Industries. A senior Reliance Retail official said the company now plans to expand its own label of packaged tea to more than 150 Reliance Fresh chain of stores. "We will also introduce our own brand of packaged tea across all the grocery related formats like hypermarkets and convenience stores," the official said. Jay Shree Tea has four gardens in Darjeeling, two in Dooars, three in upper Assam, three in Cachar and two in south India.
Its decision to enter packaged tea segment comes at a time when domestic consumption is growing at about 3.3% annually. According to industry estimates, the packet tea market is nearly 360 million kg. Hindustan Unilever Ltd is the market leader with a 24% market share. Tata Tea is the second largest player in packet tea. The other significant players are the Wagh Bakri group and Duncans Industries. Except some of the strong players like Hindustan Lever and Tata Tea, most of the packet tea manufacturers stay away from exports as it is an expensive exercise to establish a brand in the global market. The buzz suggests that if the retail major is able to establish its tea brand in the market, the company might look at the option to acquire tea gardens. This will help the company to lower its procurement cost, increase its product portfolio and offer customised blends.
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