Indiantelevision.com Team

(23 January 2008 7:00 pm)

BANGALORE: Tata Tea announced its foray into the out-of-home food and beverage segment (OOH-F&B) with the launch of its pilot outlet at IIM-Bangalore. The brand name for the new chain – Chai-Unchai. ‘Chai’ (tea) signifies the menu that comprises of the items that are classified as teas and Unchai (un-tea) denotes all the other F&B items, including coffees’, mineral water, food snack items – all eatables that one finds in the millions of small and large, branded and unbranded outlets which dispense the liquid that is now so much a part of daily Indian life. Besides F&B, Chai-Unchai outlets will sell a wide range of whacky merchandize and apparel to the target consumers.

The target consumers are the young in age and young at heart – sixty percent of Indians are young – less that thirty-five years of age. Through Chai-Unchai, Tata Tea plans to create a point of convergence for an increasing number of up and about people. ‘Chai is cool, relax it’s your ‘adda’ (point of convergence) is the message that Tata Tea wants to create through and for its Chai-Unchai outlets.

“Chai-Unchai is the transformation trigger that a tea company is using to get into the out-of-home food and beverages space”, says Tata Tea executive director- marketing Sangeeta Talwar. “Chai-Unchai will disrupt the OOH-F&B market”, adds Talwar.

According to Tata officials, the current OOH-F&B market is huge - as per Tata estimates its Rs.480 billion annually, and growing at about 15-20 percent year on year. Indian’s consume about 400 billion teacups or about 190,000 tons of tea annaully. Tata Tea is the largest supplier of tea by volumes in India with a twenty percent market share of the branded segment. The branded or the organized market is less than ten percent or between Rs.3 billion to Rs.5 billion. The rest of the demand is met by the millions of the tea vending outlets that dot even some of the smallest hamlets in the country. High ended big brands or the small tea vendor cater to the demand of the Indian who needs her/his cuppa when she/he are outside the home. Tata Tea wants to bridge the gap between the two- its Chai-Unchai outlets will hock F&B products at prices that will be 10-15 percent lower than the Café Coffee Days’ (CCD) and the Baristas’ and other major players.

By end of this fiscal (ending March 31, 2008), around 10-12 pilot outlets should be up and running in Bangalore. “Over the next five to seven years, we want to attain market leadership in the OOH-Beverage segment,” said Tata Tea general manager-marketing and sales (south) Pankaj Dant – a caution to Café Coffee Day?

The existing big players in the OOH-F&B space have set up cafes and kiosks with coffee as the anchor beverage. Chai-Unchai is a format that is neither- the Chai-Unchai outlet has a ‘flexible trans-formalizing format’ as Tata Tea officials call it. Each outlet comprises of the vending kiosk, a staircase leading to an upper floor and a lower seating place behind the vending kiosk. The entire outlet can be dismantled and taken to another place, in case the location is not suitable. As the name indicates, tea is the anchor beverage in the case of Chai-Unchai. Initially Tata Tea plans to set up its own outlets and then take the franchisee route at a later date. Tata Tea plans to set up outlets at places where youth hangout, inside malls, corporate complexes and places that have a large number of footfalls.

Initially Tata Tea plans to limit its promotion activities within a five to eight kilometers radius of each outlet. This means mainly outdoor and bill boards and localized advertisements. The company also plans to connect other youth related business – allow people to book cinema tickets at Chai-Unchai outlets as well as have outlets in movie halls. Tata Tea also plans to leverage strategic business tie-ups. Once a sufficient number of outlets have been set up, the company will go in for a mass media communication which could include TVC’s.