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In 2013, the Pakistani tea market ranked third in terms of retail tea consumption, with only China and India recording higher retail volume sales. Despite the omnipresence of tea in the country, the transition of consumers from unpackaged to packaged tea has enabled strong retail value growth with the overall market increasing by US$ 517 million between 2008 and 2013. Tapal Tea, a local family-owned company, accounted for nearly 40% of this growth, recording US$ 312 million in sales in 2013 alone. In fact, within the top ten tea markets in the world, Tapal Tea accounted for the highest company share in a single market, with 31% value share in 2013. Tapal Tea’s command of the Pakistani market stems from its stable of brands that are each targeted to appeal to very specific demographics, its commitment to innovation, and its ability to adapt its product mix to meet changing consumer demand.

Branding Based on Cultural Preferences

Tapal’s multi-brand portfolio, which includes a variety of black and green tea brands, is a major contributor to the company’s success. In addition to tailoring its brands and blends to satisfy the economic constraints of low-, middle- and high-income consumers, Tapal customizes its offerings to suit Pakistan’s various ethnic groups.  Tea consumption in Pakistan, like many Asian markets, is not only tied to refreshment, but is also an integral part of the social fabric.  Tea choices are often personal as they reflect one’s heritage and culture. As consumers switch to packaged teas, the brands that appeal to a consumer’s specific tea tradition are likely to be the most attractive.

Each of Tapal’s nine brands caters to a specific ethnic and economic demographic. Both Tepal Mezban and Tapal Chenak, for example, are economy priced brands of black tea dust (low-grade tea that is favoured for its inexpensiveness and ability to produce a strong brew) that are blended to meet the taste preferences of people from the Sindh province in the south-western part of Pakistan.  Tapal Chenak, however, is packaged specifically to appeal to the area’s Hindu population, through its use of saffron – an auspicious colour in Hindu culture – on its packaging. Tapal Tezdum, which recorded US$ 38 million in retail sales in 2013, is the company’s economy-priced brand for consumers in the Punjab province. Tezdum is positioned as a strong, powerful blend, to appeal to the ‘valor and bravery of the Punjabi people.’ For consumers who live in the northern provinces near Kashmir, where green tea is the traditional beverage of choice, Tapal markets its Gulbahar Green Tea brand.

Commitment to Innovation

Along with its awareness and sensitivity to cultural tea preferences, Tapal’s dominance of the Pakistani tea market is derived from the company’s consistent innovation. Indeed, the company’s flagship brand ‘Tapal Danedar’ first introduced in 1987, was the first Kenyan tea blend to be launched in Pakistan. The flavour proved so likeable for Pakistani consumers that Unilever, whose Lipton brand is ranked number two in the market, launched its own Danedar blend under its Yellow Label brand. Tapal Family Mixture Tea is another example of Tapal bringing innovation to the Pakistan tea industry. Launched in 1947, the year of Pakistani Independence, Tapal Chai, later renamed Tapal Family Mixture tea, marked the first blend of tea leaf and tea dust. The unique blend combines the full flavour of full leaf tea with the strength of tea dust, making it a popular household staple.

Tapal Tea is also able to sustain its success by adapting to the changing Pakistani tea landscape. While green tea consumption has historic roots  north Pakistan, black tea is the overwhelming tea choice in the country. However, as Pakistani consumers become more and more aware of the health benefits of green tea, the category is expanding, increasing by 17% in retail value terms between 2012 and2013. Tapal is well poised to benefit from the new popularity of green tea. In addition to its Kashmiri green tea brand, the company launched a brand called Shades of Green, which offers a range of flavoured green teas available in Jasmine, Lemon, and Elaichi. In 2013, the Jasmine variant alone recorded US$ 76 million in sales.

Top Tapal Brands, Retail Value, 2008-2013

Source: Euromonitor International

Note:  Tapal = all other Tapal brands.

In addition to the shift in tea types, the format of tea is also changing in Pakistan. Tea bags, in particular, are growing in popularity thanks to increasing urbanisation and changing lifestyles, as consuming tea on the go becomes more prevalent. Tapal Tea is at the forefront of tea bags in Pakistan with its Tapal Special brand available exclusively in tea bags. In 2013 Tapal also made its popular Tapal Danedar brand available in tea bags. Tapal’s campaign identified the new offering as the “King of Teabags” as they are hermetically sealed, microwave-safe and staple-free.

Although Tapal Tea’s reach is limited to Pakistan, its longstanding success offers important insights into how to drive retail value in tea within developing markets.  China and India, which are forecasted to record the first and second highest absolute retail value growth in tea over the next five years, are similar to Pakistan in terms of being markets where tea consumption is part of the social fabric. Furthermore, China and India, like Pakistan, are both multi-cultural countries with varying traditions and ethnic groups. To maximise penetration, companies should look to tailor their products to appeal more poignantly to individual preferences rather than offering a singular brand or tea blend at various price points. In addition to staying attuned to cultural traditions, tea companies should also seek to adapt their products to the evolving tea consumer. Although the shift from unpackaged to packaged tea is a major component of the tea evolution in Asia, the change does not stop there, but extends to different tea types and formats.

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