A top Tata Tea official confirmed the development to The Financial Express. He said the national brand would help the company expand its portfolio in the 250-million kg packet-tea market.

"This particular brand, which will comprise purchased tea and tea not used in our regular packs, is expected to boost sales further," the official said. Tata Tea's packet-tea sales grew by 10 per cent last year, against the industry average of 4 per cent.

In some regions, the new brand is expected to be positioned in the mass segment against Lever's "A 1", the fastest-growing brand, while in other areas, it will be a stand-alone brand.

Tata Tea's 52 gardens produced 62.4 million kg in 1997-98 and met therequirements of its packet brands. The thrust on the new brand will force the company to pick up some tea from auctions, at which HLL is a major buyer.

"As we plan to increase our market shares, auction teas may find some way into the packets," said the official. Flagship brand Tata Tea has a considerable market share across the northern heartland, while its other brands like Kanan Devan, Chakra and Gemini account for about 65-70 per cent of the market in regional pockets of Andhra Pradesh and Tamil Nadu.

"These four brands form almost 98 per cent of the sales," said the official. The lesser brands include Leo, Chola and Brahmaputra.

All these brands have different variants like leaf or dust on a regional basis, leading to varying prices in states.

Market sources say in the north, Lever's Red Label and Taaza and Duncan's Sargam are positioned against the Tata Tea brand. The dust variant of this brand is well taken in Maharashtra, whereas the leaf variant has made significant inroads in Orissa.

TataTea plans to expand its packet-tea business into a 35 per cent share of the market, against 28 per cent now. This will still be behind Lever's 55- 60 per cent.

According to the official, although brands like Tata Tea and Kannan Devan are mid-segment brands, the imagery goes beyond the medium segment.

"Portfolio branding as a concept is different with the Tatas, as the introduction of a new brand means more than a mere market survey and brand positioning by an agency. We go right up to the plucker. This apart, a study into the regions is also important," said the official.

"Moving out of coffee trading altogether, Tata Tea's focus on packet-tea sales is expected to sharpen with a slew of brand-building exercises, improved efficiencies and distribution network," he added.

"An initial capital-expenditure exercise at our plantations launched four years back is nearly complete and fresh investments would be required to think of the company five years down the line," the official said.

Four years ago,Tata Tea launched a Rs 160-crore plan to improve its plantations. During 1997-98, it produced 62.4 million kg of tea, against 59.7 million kg in 1996-97. Its south Indian gardens produced an all-time record of 33.2 million kg, up 18 per cent over the previous year, and packet-tea sales in the region grew by nearly 18 per cent.

For 1997-98, the company reported a 32 per cent growth in sales turnover to Rs 718 crore, and its highest-ever net profit of Rs 102 crore.