Promoting Ceylon Tea in Egypt
Promoting Ceylon Tea in Egypt
Tea is the main beverage of Egypt. Sri Lanka was the largest tea exporter to Egypt before
1990s, Sri Lanka annually exported around 30-40 million kg which accounted for more than
90% of the Egyptian market at that time. Sri Lanka’s market share unexpectedly started to
decline with heavy custom duty imposed on imported tea from non member countries of the
free trade Agreement ‘Common Market for Eastern and Southern Africa (COMESA)1. This
duty accounted to 30% making Sri Lanka tea expensive in Egypt.
Being a member, Kenya was able to increase bulk tea exports to Egypt under duty free
facility of COMESA while other non member countries including Sri Lanka could not
compete in the market and had to reduce tea exports to Egypt because of higher customs
duty. Kenya has gradually managed to acquire about 89% of the Egyptian tea market. Sri
Lanka’s share reduced to about 3.1%2. This market setback led to Sri Lanka having low
expectations about Egyptian tea market. Sri Lanka Tea Centre in Cairo was closed down after
COMESA. Promotions for Lion logo were not undertaken in Egypt since then.
It is notable that the conditions in Egyptian tea market have recently started to change in
favour of Sri Lankan tea due to two main reasons:
a) Reduction of Customs duty from 30% to 2% for tea exports from non members of
COMESA;
b) Continues increase in Kenyan tea prices in recent years
Table 1
Kenyan Tea Prices in Egypt tea Market: 2008-2012
Year
Price in USD
2008
2.00 - 2.5
2009
2.25 - 2.5
2010
3.00 - 3.5
2011
3.00 - 3.5
2012
3.7
In the circumstances, Sri Lanka’s tea exports to Egypt shows a considerable increase recently
(Table 2).
Table 2
Sri Lanka’s Black Tea Exports to Egypt: 2007-2011
Year
Quantity in mt
2007
1528
2008
1254
2009
1318
2010
1257
2011
2504
Sources : ITC calculations based on UN COMTRADE statistics
Emerging favorable conditions offer a unique opportunity to regain the lost tea market in the
Egyptian. The facts and figures about the present Egyptian tea market strongly support this
view.
Table 3 shows the size of the retail black tea market in Egypt.
1
The COMESA was signed in 1993 and came into effect in 1994. The members of the COMESA include Angola, Burundi,
Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius,
Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
2
Source : ITC calculations based on UN COMTRADE statistics
1
Embassy of Sri Lanka in Cairo
Promoting Ceylon Tea in Egypt
Table 3
Volume of Retail Sales of Black Tea in Egypt Tea Market: 2006-2011
Year
2006
2007
2008
2009
2010
2011
77,997.3
Quantity in mt 69,974.7 71,253.1 72,535.6 74,018.9 76,208.7
Source: Euromonitor International
Table 4 shows the leading players in the Egyptian tea market along with their brands and
respective market shares.
Table 4
Tea Company / Brand Shares by Retail Value 2008 - 2011
Company
Brand
2008
2009 2010
2011
Badawy & Sons Co
El Arosa
59.2
59.2
58.0
57.7
Uniliver Group
Lipton
29.2
29.3
29.2
29.4
El Jawhara Co
El Jawhara
8.4
8.3
8.1
8.3
Isis Co
Isis
1.6
1.6
1.7
1.7
Ottoman Co
Royal
0.3
0.3
0.3
0.3
Twining & Co Ltd. R
Twinings
0.4
0.3
0.3
0.3
Mansour Manufacturing Keddah Dust
0.2
& Distribution (MMD)
Tea
El Anany Co
El Warda
0.3
0.3
Others
Others
0.5
0.5
2.2
2.2
Total
Total
100
100
100
100
Source: Euromonitor International
El Arosa Tea:
El Arosa is the brand name of the tea widely marketed by the company named Badawy &
Sons Company, the leading player in the Egyptian tea market. This company sells Kenyan
CTC tea, targeting the lower income price conscious consumers. According to a research
conducted by the ‘Euromonitor International’, El Arosa Company had a market share3 of
57.7% in 2011. It is found that Sri Lanka tea can not be offered to this market segment as its
prices are higher than those of El Arosa.
Badawy Company also offers ‘El Arosa tea bags’ to the middle income group. But the tea
bag sale is not significant within market share of Badway.
Lipton Tea:
Lipton tea brand is owned by Uniliver group. Being the second largest market player, Lipton
tea has a market share of 29.4%. Its market share continues to grow because Uniliver is now
making inroads to the market of El Arosa through effective advertizing campaigns. These
promotional campaigns have shown clear signs of being successful.
However, Lipton tea mainly targets upper income and middle income consumers. Lipton tea
bags are popular and in good demand. These tea bags consist of Kenyan tea mixed with tea
from Malawi, India and Uganda etc. This mixing and packing take place in Egypt. The
unique blending methods and sophisticated advertising campaigns have enabled Lipton to
3
Euromonitor International: http://www.euromonitor.com/tea-in-egypt/report
2
Embassy of Sri Lanka in Cairo
Promoting Ceylon Tea in Egypt
retain its identity as a prestigious brand among upper and middle income consumers. The
market catered by Lipton tea could be the potential market segment for Sri Lankan tea.
El Jawhara Tea:
El Jawhara Company sells its tea under ‘El Jawhara’ and has a market share of 8.3%. El
Jawhara sells Kenyan tea targeting mainly lower income consumers.
Other Brands:
The rest of Egyptian tea market share is around 5% consisting of many tea varieties used by
upper, middle and lower income groups. Pure Sri Lanka tea (Lion Logo) also falls within this
market share and cater to upper middle class and super rich consumers. Pure Sri Lanka tea
brands Dilmah, Ahmed, Kings, El-salam and Supperfine. Other tea brands such as Cairo,
Lord, Rose are basically targeting lower income consumers.
Dilmah Tea:
Dilmah, El Salam, Ahmed, Supperfine are the main brands of packed tea being exported from
Sri Lanka to Egypt. Among them, Dilmah is the most prominent and is available in every big
super markets. It is now considered to be the most prestigious and popular brand among high
spending customers looking for high quality tea. According to the survey of retail tea prices,
the Dilmah tea is sold under the highest prices in the Egyptian market. The table 5 at Annex I
give a comparative picture about the retail prices of packed tea. Dilmah has achieved a
remarkable success in capturing this exclusive market.
El Salam Tea:
It is also noteworthy that El Salam has managed to retain the customer loyalty in Egyptian
market for Lion logo tea over a period of 30 years.
Current population4 of Egypt is 83.7million of which nearly 10% is estimated to be the
supper rich sharing 26.6% of country’s national income5. The next 10% of the population
possess 13.7% of the national income. These two income groups represent about 16.7 million
people claiming 40.3% of the national income. Good purchasing power naturally makes them
buy quality products including high quality tea.
As tea is an essential beverage and part of the Egyptian culture, the existence of any unstable
political and security situation would not be a significant factor negatively influencing tea
consumption in Egypt. This is evident from the fact that tea consumption increased from
76,208.7 mt in 2010 to 77,997.3 mt. in 2011 when the revolution and political instability
started in Egypt. Sizable number of high income people in Egypt offer an excellent
opportunity for Sri Lankan tea exporters to regain the lost tea market in Egypt.
Analysis of Retail Tea Prices:
The Embassy conducted an initial market survey. Collected tea samples were sent to the Sri
Lanka tea Board. The table 5 at Annex I shows the retail prices of different tea packs
marketed under main brands in Egypt. As per the details in the table, it is clear that Sri
4
Estimated figure by World Fact Book - https://www.cia.gov/library/publications/the-worldfactbook/geos/eg.html Population in 2011 - 82.53 -World Bank Indicators
5
World Bank Indicators- Egypt - http://data.worldbank.org/indicator/SI.DST.10TH.10/countries
3
Embassy of Sri Lanka in Cairo
Promoting Ceylon Tea in Egypt
Lankan tea cannot compete with leading brand El Arosa because of its low prices. In the
circumstances, the market prospects for Sri Lankan tea would remain with upper and middle
income groups. These consumers from these two income groups mainly consume varieties of
Lipton tea.
The market survey of the Embassy revealed that price differentials between Lipton and El
Salam (Lion Logo tea) are marginal. Lipton’s market is about 29.4% of the entire Egyptian
tea market. This 29.4% represents an average of 23089 mt [(78533.9/100) * 29.4] per
annum6. This is the approximate size of the potential market segment on which Sri Lankan
tea exporters need to focus for promoting Lion logo tea.
The well-planned, vigorous tea promotion campaign should be launched on a sustainable
basis over a period of two to three years for penetrating market segment dominated by
Lipton. If Sri Lanka tea exporters can capture 10% - 15% the Lipton’s market share, after 3
years, it would be a huge success.
Specific Actions:
Following suggestions are made to derive a strategic plan for promoting Lion Logo tea in
Egypt.
01. To conduct tea promotion Events at;
- Five Star Hotels
- Prestigious sports clubs
- Cultural Centers (American, Spanish, Japanese, etc)
- Leading Universities/Colleges
- Newspaper publishing houses
02. To identify potential buyers especially leading companies specialized and engaged in
distributing food products in Egypt for introducing and promoting Sri Lankan tea to them.
03. To encourage Sri Lankan tea exporters, biscuits manufacturers and Porcelain products to
undertake joint promotion campaigns.
04. To display billboards in prominent places, airports, hotels, leading supermarkets, major
junctions at highways.
05. To conduct promotional programs through TV, News paper and Trade Magazines etc.
06. To participate at high level International Trade Fairs in Egypt such as Cairo International
Fair, this year fair will be held 19th to 29th March 2013.
Prepared by;
Sri Lanka Embassy
Cairo, Egypt
February, 2013
6
As per statistics of Euromonitor international, total amount of tea sold in Egypt in 2011 was 78533.9 mt.
4
Embassy of Sri Lanka in Cairo
Promoting Ceylon Tea in Egypt
Annex I
Table 5
Bag Tea Prices
Brand
1
2
3
4
5
No. of
Tea
bags
Net
weight
in gm
Price in
LE
Price per
gm
in LE
Price per g in
USD
Remarks
LE 1 = USD
0.152855
0.0116
0.0121
0.0176
0.0137
0.0182
El Arosa
Lipton
Ahmed
Alokozay
Carrefour
El
6 Gawhara
7 Dilmah
25
25
25
25
25
50
50
50
50
50
3.80
3.95
5.75
4.49
5.95
0.076
0.079
0.115
0.090
0.119
25
25
50
50
2.95
6.10
0.059
0.122
0.0090
0.0186
1
2
3
4
El Arosa
Lipton
Alokozay
Dilmah
50
50
50
50
100
100
100
100
7.00
7.00
8.50
11.99
0.070
0.070
0.085
0.120
0.0107
0.0107
0.0130
0.0183
1
2
3
4
5
6
El Arosa
Lipton
El Salam
Ahmed
Supperfine
Dilmah
100
100
100
100
100
100
200
200
200
200
200
200
13.45
15.99
14.95
18.75
18.75
20.75
0.067
0.080
0.075
0.094
0.094
0.104
0.0103
0.0122
0.0114
0.0143
0.0143
0.0159
5
Embassy of Sri Lanka in Cairo
Promoting Ceylon Tea in Egypt
Dust Tea Prices
Brand
Quantity
in grm
Price
LE
40
40
40
40
40
40
40
40
1.50
1.50
2.45
1.25
1.50
3.25
1.20
1.20
0.038
0.038
0.061
0.031
0.038
0.081
0.030
0.030
Price per g in
USD
LE 1 = USD
0.152855
0.0057
0.0057
0.0094
0.0048
0.0057
0.0124
0.0046
0.0046
40
40
1.40
1.25
0.035
0.031
0.0053
0.0048
3.10
3.75
4.70
5.25
3.95
3.25
2.75
2.80
0.031
0.038
0.047
0.053
0.040
0.033
0.028
0.028
0.0047
0.0057
0.0072
0.0080
0.0060
0.0050
0.0042
0.0043
7.75
8.90
9.75
10.45
7.95
7.00
10.49
5.95
7.15
0.031
0.036
0.039
0.042
0.032
0.028
0.042
0.024
0.029
0.0047
0.0054
0.0060
0.0064
0.0049
0.0043
0.0064
0.0036
0.0044
1
2
3
4
5
6
7
8
El Arosa
Lipton 1
Lipton 2
El Salam
Al Asary
Orouba
Cairo Tea
Crown
El
9 Gawhara
10 Lord
1
2
3
4
5
6
7
8
El Arosa 1
El Arosa 2
Lipton 1
Lipton 2
El Salam
Orouba
Cairo
Lord
100
100
100
100
100
100
100
100
1
2
3
4
5
6
7
8
9
El Arosa 1
El Arosa 2
Lipton 1
Lipton 2
El Salam
Cairo
Jawhara
Al Barad
Lord
250
250
250
250
250
250
250
250
250
Price per g
in LE
Remarks
6
Embassy of Sri Lanka in Cairo