Sunshine Consumer began with tea, but its ambition today extends well beyond the category. With Zesta, Watawala and Ran Kahata spanning different segments of the tea market, and Daintee, Milady, and X-tra adding confectionery to the portfolio, the business has evolved into a broader fast-moving consumer goods (FMCG) player built around distinct brands and categories.
When Sunshine Consumer launched Zesta in 1998, the aim was to give Sri Lankans the quality of tea the country had long reserved for export. Watawala and Ran Kahata followed, each built for a different segment, and the three brands now account for around half of Sri Lanka’s branded tea market. The acquisition of Daintee, a confectionery business founded in 1984, then brought Milady, X-tra, and Daintee Hearts into the portfolio. That turned a tea company into a wider FMCG business. Anuruddha Aluvihare, Chief Executive Officer of Sunshine Consumer Lanka, spoke to Echelon to discuss how two different categories are run through one sales force, how Watawala became the market leader, and where the next phase of growth lies.
Sunshine Consumer has grown from a tea-led business into a portfolio spanning beverages and confectionery, with brands such as Zesta, Watawala, Ran Kahata, and Daintee under the Sunshine umbrella. How do you bring these different brands together as one consumer business while allowing each to have its own identity?
Sunshine began in branded tea, but today we are an FMCG business, not simply a tea or confectionery company. Tea is a commodity category and still our larger business, while confectionery is discretionary and impulse-driven. Each brand has a defined role and target group, and our trade marketing is fully differentiated. We map tea and confectionery wholesalers separately, as they are often different businesses, and tailor our promotions accordingly. Tea carries heavy above-the-line investment, whereas confectionery depends on availability and visibility.
Distribution is where the two meet. More than 90% of outlets sell both categories. After acquiring Daintee, we tried dedicated and hybrid sales teams, but a market study showed that separate teams added cost without adding revenue. We now run a single sales force carrying both portfolios. Its tactical plans might, for example, have reps lead with confectionery in a given month.
Zesta, Watawala, and Ran Kahata each occupy a different space in the tea market. How do you shape the identity and role of each brand while keeping sight of the bigger portfolio?
Zesta, our first brand, came from an idea of Vish Govindasamy, now the Deputy Chairman of Sunshine Holdings. Sri Lanka was exporting its best tea to the world, yet Sri Lankans struggled to find good quality tea at home. Zesta was created as a premium, leafy Broken Orange Pekoe Fanning (BOPF) with a superior blend, and it remains at the top of the market.
A few years later, Watawala launched as a mass-market brand to deliver a perfect cup of tea with or without milk. Around two years after that came Ran Kahata, aimed at converting loose tea buyers through hygiene, freshness, and convenience. Each brand has a distinct role, and together they hold around 50% of the branded tea market.
Watawala has grown since its launch in 2002 into Sri Lanka’s leading tea brand. What were the turning points that helped it move from a product on the shelf to a brand people connected with?
The launch itself was a turning point, as Watawala was introduced to the market with a blend the Sri Lankan consumer was yearning for, with a balanced Kahata, Flavour, and Aroma. It was also named after the tea region Watawala, which brings credibility from upcountry hills. Beyond that, its success came down to availability, visibility, and continuous concentration on brand building.
Tea was kept for years, so stock often remained between 18 months to two years on the shelf. In contrast, Watawala moved faster, and most of its packs remained less than 12 months on the shelf. Watawala took a revolutionary decision to take the shelf life down to 12 months from 36 months and communicated the story of on-shelf freshness through the “Nama Balala, Dina Ganala Ganna” campaign, creating the shopper habit to check the date of manufacture before buying. It registered Watawala firmly in consumers’ minds. In 2016, after a hard-fought contest, Watawala overtook its top competitor in market share.
Ran Kahata was built around hygiene and affordability. How did the brand evolve from that functional proposition into one that speaks to the experiences, choices, and aspirations of Sri Lankan women?
Ran Kahata was introduced to compete in the value segment, with a direct message: leave behind loose tea sold in paper wraps, which are often left open overnight, and choose an affordable, hygienic product from a company that guarantees its blend.
The emotional shift came from research showing that women make around 80% of tea purchase decisions. Advertising usually presents making and serving tea as a woman’s job. Our view is that she is capable, but it’s not her responsibility. Through the “Mage Mathe” campaign, we set out to build a lasting bond with these shoppers by valuing their choices. The campaign was not intended to position Ran Kahata as a brand that solves social issues. Rather, it was about recognising women as consumers with their own choices, while remembering that everyone who drinks tea is ultimately our consumer
With brands such as Daintee and Milady carrying decades of consumer memories, alongside younger propositions such as X-tra and Daintee Hearts, how do you balance the heritage of these brands with the need to keep creating new reasons for consumers to choose them?
Daintee dates back to 1984, so these brands carry more than four decades of memories. I ate Choco Mint myself as a young man. Among the toffees of that era, a chocolate centre with a mint coating was a genuine innovation, and today it remains a market leader in hard-boiled sweets despite a wave of imported confectionery. With such heritage, the challenge is to modernise the portfolio without modernising away what consumers love. We have deliberately kept its wrappers and look unchanged, because loyal consumers come back for exactly that.
“Sri Lanka was exporting its best tea to the world, yet Sri Lankans struggled to find good quality tea at home. Zesta was created as a premium, leafy Broken Orange Pekoe Fanning (BOPF) with a superior blend, and it remains at the top of the market.”
For younger consumers, we develop new products under the same trusted names. We are second in gum, one of the country’s fastest-growing categories. We are also second in breath fresheners, behind a premium multinational, and are steadily gaining share there. The challenge is staying competitive while modernising production at a gradual pace.
How are changing tastes, lifestyles, and consumer expectations shaping the way you develop products and build brands across tea and confectionery?
Most confectionery trends originate overseas, and local companies, including us, tend to follow. Being first involves costly trial and error, so we adopt proven ideas and execute them better, while remaining open to new innovations and businesses.
Our new product development team is cross-functional, led by research and development and marketing, with each brand manager acting as custodian of their brand. The team maintains an innovation pipeline and brings shopper and consumer insight into every decision.
Across such a diverse portfolio, how do you stay close to what consumers want and translate those insights into decisions about products, positioning, and communication?
Consumer insight drives everything from product development to packaging. We use Kantar and PepperCube to track general trade by region, territory, outlet, and channel. We are the only tea or confectionery company subscribing to PepperCube, and we supplement it with our own retail and household panels. Even television storyboards are tested with consumers through our agency and adjusted before group approval. We place our product across adjacent categories in market placement and also create cross category promotion to penetrate into new households.
Looking ahead, where do you see the biggest opportunities for Sunshine Consumer, and what do you want the next generation of consumers to associate with its brands?
In line with the Sunshine purpose of bringing good things to life, we want to grow our basket. We are open to acquisitions in adjacent categories that fit our portfolio, supported by the group’s growth office. A larger, relevant portfolio is how we become retailers’ most preferred supplier.
“For younger consumers, we develop new products under the same trusted names. We are second in gum, one of the country’s fastest-growing categories. We are also second in breath fresheners, behind a premium multinational, and are steadily gaining share there.”
Within our current categories, confectionery offers greater growth. Tea is in virtually every home, so growth there comes from converting loose tea users and converting users of other brands. For the next generation, I want our brands to stay relevant, while ensuring quality and freshness. We will only enter a category with the expertise to do it well, and ensure that we lead the category. Profit is the outcome of that, but not the sole aim.