SL must become a tea nation, but…

Last week I was tasked with the responsibility of being a speaker at a Global Coffee and Tea Convention and with much pride announced to the international foray that Sri Lanka had progressed in the world competitiveness rankings from 79 two years back (2009) to be a top 52 country in the world today as per the World Economic Report.

The audience gave a round of applause and I quickly chipped in that this was the result of the sharp strategies adopted by a joint private-public sector initiative that is a new model to the world of a country coming out of the clutches of terrorism, which sure got people thinking.

Hurt brand SL?

But, coming back home, I could not believe my eyes when I saw the private sector and the Bar council at loggerheads with the Government on a proposed takeover bill of underutilised and nonperforming assets. It’s sad to see how we as a country, when we are just about moving ahead globally, create situations that take us back and hurt brand Sri Lanka.

If I am to be specific rather than just being rhetoric, as per the 2011 World Economic Report, even thought Sri Lanka’s competitiveness ranking has moved up to a top 52 country on the attribute of ‘Public Trust in Politicians,’ ‘Irregular Payments’ and ‘Independence of the Judiciary,’ our score had declined to take the overall ranking on this pillar to 113 from the earlier rank of 39. This is where the issue of the Takeover bill comes into play and how it can hurt brand Sri Lanka’s performance.

Incidentally this is exactly what the investor world is keeping an eye on as it focuses on evaluating the options of investing in Sri Lanka as against Vietnam and or Mauritius and we have now justified this hunch that was highlighted by the World Economic Report.

Duplicity

Whilst highlighting the issue of inconsistency of policy at a national level, a point that needs to be stressed is the duplicity of the private sector. I have not seen any report of the main chambers expressing their non-consent on the takeover bill of the underutilised and nonperforming assets that comes in as an urgent bill that needs to be passed, when there are so many underperforming State-run institutions that have been pointed out by COPE but have not been addressed

If I am to focus on the tea industry of Sri Lanka, when the wage increase was taken up 30% to Rs. 500 plus some months back, other than for two or three Regional Plantation Companies which expressed their discontent officially in written form to the Government, the others agreed to accept the political economy at play by signing same.

But today, when the industry is in the red, we see interviews and articles in the media highlighting this debacle after being a signatory to the wage increase months ago. Whilst I agree that to work in a political economy one requires a new set of skills, at some point sanity needs to be established through engagement but we sadly see the duplicity that exists in the private sector system that is in fact now becoming systemic.

However, I will be failing in my duty if I do not commend the regional chambers which are I guess closer to the ground, for having voiced their displeasure together with the Malwatte Chief Incumbent, which gives a aura of discontent that exists in certain quarters of the country and their character to address it with decorum and sense of purpose.

 Indian coffee

Getting back to the Global Conference on Coffee and Tea in Dubai, I amazed by a presentation made by a leading Indian coffee company called Karnataka Plantations Coffee Inc. Initially, when the exporter engaged the roasters and cuppers in the United States, the response was very clear: ‘We buy coffee from Brazil and Colombia and we will lose our customers if we offer Indian coffee.’

But the entrepreneur did not give up and kept on engaging the potential customers with a 360 degree strategy with education campaigns, familiarisation tours to India and sampling and demonstrations to excite the potential customers who were hooked on to South American coffees. Today, the company has an 8% share in the US coffee industry, which tells us the story that if a compelling argument is made with passion and commitment, it can sure change customer behaviour.

SL lost?

When listening to the President of Karnataka Plantations Inc, the thought that crossed my mind was that even though Sri Lanka is considered a tea drinking nation globally, the Baristas and Coffee Beans of the world have made a clear inroad into the very heart of the city of Colombo and made the habit of drinking coffee hip and contemporary. Even though tea is seen as a health beverage and is gaining popularity among the youth globally, we as a nation have not driven this proposition among the younger generation to compete with the lifestyle-driven Baristas of the world.

Reality

Whilst we see how coffee as a category is penetrating the share of throat of the youngsters of Sri Lanka, the realty in Sri Lanka is very different, to be honest.

Tea is almost a religion to the everyday life of a Sri Lankan. It is a top beverage among all sectors of the economy, only second to water. In fact tea has a 33% top of the mind recall that sure is a strong score for a brand/category to enjoy.

If one digs deeper into the reason why tea is consumed by any Sri Lankan, almost 75% said that it makes them active, meaning the stimulant properties of the product category. A point to note is that this underlying reason for consumption was similar in the youth segments of the market which was an interesting insight.

On the other hand, almost 25% commented that it was good for thirst, which is in fact the core reason for the existence of the category. This also means that the category is naked in its true sense, given that people purchase the category for rational reasons rather than emotional attachments.

Next steps

Whilst highlighting the reality of this industry from a domestic marketing point of view, let me capture the next steps if we are to make Sri Lanka a tea nation to the world:

1. Develop a marketing plan for the category where drinking of tea can be made contemporary whilst protecting the current reasons why Sri Lankans consume tea.

2. Gather the domestic brand players and incorporate the overall brand strategies so that a holistic game plan is in place at a category level and at a brand level.

3. Whilst the Sri Lanka Tea Board drives the national category strategy, under this umbrella the brand architecture will continue to be at play.

4. A market research agency must be contracted so that tracking purchasing behaviour can be done at consumer and retail level so that the loose tea segment gets captured; to track the brand health an equity measurement research agency must be contracted.

5. Launch the concept of a ‘Tea House’ in the key urban cities to compete with the coffee outlets whilst the ‘Te Kades’ must be given a face lift with a consistent name boards/hoardings.

6. Bring in legislation that all local brands must carry the Ceylon Tea logo as per the quality standards that must be adhered to of a 100% claim.

7. In key locations the ‘Tea Houses’ must be set up but with a strong activation trail like sampling, tasting and purchasing opportunity that must have ice teas and the flavoured teas that Sri Lanka exports to the world; i.e. BIA, BMICH, WTC, etc.

8. Ceylon Tea brand visibility via key media i.e. Facebook, Twitter, cinemas, national newspapers, etc.

9. Ceylon Tea featured in all New Year promotional material, be it the Presidential Secretariat, line ministries, local government and private sector tea industry-related organisations.

10. All Sri Lanka sports teams and SriLankan Airlines staff must carry the Ceylon Tea logo as an endorsement.

 (The author has a double degree in marketing and an MBA and is reading for a doctoral degree in business administration. The thoughts expressed are his own and do not reflect the offices he holds in Sri Lanka or internationally. He is a Rotary GSE Scholar to the United States and an alumnus of Harvard University, Boston.)