Positioned against multinational Hindustan Lever Ltd's A1, the fastest growing tea brand, as well as loose tea and local brands, Tata Tea has built the `Agni' image on a platform of power and strength. Running an extensive test marketing around the country, the tea major will launch the exclusive brand this week.

Handled by Bharat Dhabolkar of the `Amul butter' brand fame through his company Zen Advertising, the brand will be endorsed by actress Sridevi. Agni will be marketed in all formulations be it dust or leaf varieties across the country.

The brand -- Rs 29 for a 250g packet -- will target the economy market where it will take on competition from the vast loose-tea segment apart from the national AI and a plethora of regional players. In some regions, it may be a standalonebrand.

Tata Tea managing director SM Kidwai told The Financial Express that this tea will be primarily sourced from the various auction centres and be a part of the economy segment. "Till now we were non-operative in this segment, but now our contention is to make a major impact here," he said.

According to Kidwai, the new brand will also be its first reliance on auction tea, as its current brands consume most of the tea it grows. "This particular brand, which will comprise of purchased tea and tea not used in our regular packs, is expected to boost sales further," said Kidwai. Tata Tea's packet tea sales grew by 10 per cent last year, against the industry average of four per cent.

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

Flagship brand `Tata Tea' has a considerable market share across the north Indianheartland, while its other brands like Kanan Devan, Chakra and Gemini account for over 65 per cent to 70 per cent of the market in regional pockets of Andhra Pradesh and Tamil Nadu. The lesser brands include Leo, Chola and Brahmaputra.

All these brands have different variants like leaf or dust on a regional basis, leading to different prices in different states. In north India, HLL's Red Label and Taaza and Sargam of the Duncans are positioned against the Tata Tea brand. The dust variant of this brand is popular in Maharashtra, whereas the leaf variant has made significant inroads in Orissa.

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

Focus on packet-tea business

Tata Tea's bid to expand its packet tea business forms part of a strategy that has already rejected the idea of buying gardens overseas.

Managing director SM Kidwai said, "We are asking ourselves as to whether it isworth purchasing tea gardens in Africa or Sri Lanka. One has to work a trade-off between investing on sick gardens and moving aggressively into packet tea business."

Tata Tea's new brand will help it expand its framework and get a 30 per cent market share in packet tea business against 28 per cent now.

"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.

"The Rs 160-crore capital expenditure at our plantations launched four years back is nearly complete and fresh investments will be needed to think of the company five years down the line," he said.

During 1997-98, it produced 62.4mkg of tea against 59.7mkg in 1996-97. Its south Indian gardens produced 33.2mkg, up 18 per cent on the previous year, while packet tea sales in the region grew by about 18 per cent.