Lanka’s tea industry is a big fish in a small pond
View(s):By Duruthu Edirimuni Chandrasekera
While Sri Lanka’s tea industry is a big fish in a small pond, it’s important to focus on its share in the global beverages market, according to industry analysts.
“Sri Lanka has some 8 per cent in the global tea market and there’s 92 per cent to capture. As such Sri Lanka’s tea industry is a big fish in a small pond,” Hilmy Cader, CEO, MTI Consulting said, in his presentation at the recent ‘MTI Tea Strategy Forum’ in Colombo.
At the panel discussion, Rohan Fernando, Chairman HVA Exports noted that either Sri Lankans have to build multinational brands or give multinationals to build brands.
Malik Fernando, Director Dilmah responded that one has to look at the industry primarily from the growers’ point since that was the most important part of the industry in terms of socio-economic importance. “We need to find the best strategy for what we have, rather than what we don’t (meaning cheap tea),” he told the Business Times on the sidelines of the Tea Strategy Forum. He said that global brands have no allegiance to a country. “We grow Ceylon Tea and exporters have a duty to market it as a premium product. Surely we should optimize marketing of what we grow before trying to market other origin tea? Only 12 per cent of our tea is exported in Sri Lankan brands”, he said,He reiterated that a high cost, high quality product like Ceylon Tea needs a strategy … poles apart from multinational brands. “If using multi-origin tea, what point of difference would Sri Lankan exporters promote? Do we have the financial muscle to promote like Lipton? One has to be either high end, niche or low cost, mass market. Death awaits in the middle.”
Who would market (as opposed to trade) Ceylon Tea if Sri Lankans won’t, he queried, noting that it will certainly not be the international brands as most have phased Ceylon Tea out and others will soon follow, having built their brands on Ceylon Tea ably supported by Sri Lankan private label packers.
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