Hindustan Unilever’s tea portfolio does things differently, making it one of Unilever’s last successful tea enterprises. Photo credit: Hindustan Unilever
Unilever's recent SariWangi divestiture highlights a stark reality — tea has become a risky investment. As the multinational exits territory after territory, one stronghold remains — Hindustan Unilever (HUL). While other Unilever tea portfolios have stalled, HUL continues to brew robust growth in the subcontinent and earn high returns. What sets HUL apart from Unilever’s other tea endeavors?
HUL's Tea Portfolio: Strategic Pyramid Positioning
HUL's beverage brands, including Taaza, 3 Roses, Brooke Bond, Taj Mahal, and Bru, contribute nearly 12% of the company's revenue, with tea accounting for approximately 80% of this segment. The secret? A multi-tiered brand strategy that captures every income segment.
At the base sits Taaza, targeting economy consumers with fresh green tea blends and accessible pricing. Brooke Bond Red Label dominates the mid-market, holding a significant share with its "togetherness" positioning, transforming tea from mere refreshment into a catalyst for social bonding. At the premium end, Taj Mahal has commanded loyalty among affluent consumers since 1966, when it was introduced as India's first premium tea, with innovations such as tea bags and vacuum-packed offerings.
This pyramid approach allows HUL to capture consumers across India's diverse economic spectrum, preventing downtrading while encouraging premiumization as incomes rise.
Winning in Many Indias: Localized Excellence
HUL's “Winning in Many Indias” business model recognizes that dialects, customs, and rituals change every 100km in India, treating the country as 15 distinct consumer clusters rather than a homogeneous market. This hyperlocalization drives innovation and distribution strategies tailored to regional preferences — whether dust tea in the South or leaf tea in the North.
The strategy includes flexible pricing that passes commodity deflation benefits to consumers while taking inflation increases in "small bites" to maintain the consumer franchise. This pricing agility, combined with rural penetration through the Project Shakti program, which empowers women micro-entrepreneurs, creates deep market access that competitors struggle to replicate.
Innovation Driving Growth in a Mature Category
Despite tea being a mature category with high penetration, HUL's tea brands have grown in double digits by identifying emerging trends. The company pioneered the development of the green tea market in India, launching variants under both Lipton and Taj Mahal to capture different consumer segments.
Product innovation remains relentless, with flavored teas, health-focused variants like Red Label Natural Care, premium green tea offerings, and convenient tea bag formats for urban consumers. HUL also leverages its sustainability credentials, partnering with the Tea Research Association on climate resilience and regenerative agriculture.
Fierce Competition
While competition remains intense — Tata leads in volume — HUL continues to maintain its position among the top tea brands in India. Regional players like Wagh Bakri, along with countless small and loose-leaf tea providers, create a fragmented competitive landscape that requires constant vigilance.
Competitive pressures intensified postpandemic, as smaller regional players that had vacated the market during peak inflation returned and began significantly growing ahead of the large players.
Why India Thrives While Indonesia Exits
The contrast is striking. SariWangi contributed only 3.1% of Unilever Indonesia's net profit and 2.7% of revenue despite strong brand recognition. Meanwhile, Unilever’s India tea business delivers double-digit growth and market leadership.