Consumer Goods

Just as much as tea is at the heart of Sri Lanka’s national identity, so it remains the centre of Sunshine’s consumer segment, making up most of its revenue. Sri Lankans love their tea, with an estimated 99.3% of the population consuming at least one cup a day, in what has become a deeply embedded ritual. This amounts to some 30 million kilogrammes a year, around 60% of which is sold in the local market as branded tea, a segment where Sunshine continues to hold a commanding presence.

Our tea portfolio, comprising the brands Zesta, Watawala, and Ran Kahata, together account for over half of the branded market, respectively occupying the number one, two, and five positions by market share. Clear differentiation across price points and consumer segments allows each brand to play a strategic role in Sunshine Consumer’s architecture, allowing the Group to remain relevant and reach a broad demographic spectrum.

Zesta

Our premium offering, Zesta targets a more discerning consumer segment, with a strong emphasis on quality and provenance. Made with 100% BOPF tea, it is a brand that celebrates what we call the “art of tea”, a tagline that goes back a quarter of a century. We also sell a range of wellness infusions blended with herbs and healing spices under the Zesta brand. Zesta made a bold move as the premium tea market leader by launching “My Zesta Story”, a campaign that gave consumers a chance to create the next TV commercial for Zesta. Aided by this campaign, Zesta was able to grow its equity.

Watawala

Launched in 2002, Watawala is our flagship brand and remains Sri Lanka’s number one tea brand, as verified by both Kantar World and Peppercube retail panels. Positioned at the heart of the mass market, with a series of back-to-back SLIM People’s Choice Awards to its name, Watawala has built its reputation on reliability, consistency, and wide availability, becoming a household staple for everyday tea drinkers across the island. Watawala is now recognized as the national beverage that brings people together, with its “wata” campaign launched this year where the word “watawala” which means in circles was used to show how people always gather around and how Watawala brings them closer when they do. A campaign sketched across multiple religious and national events and consumption moments has increased brand equity to an all-time high.

Ran Kahata

An unjust irony that has come to haunt Sri Lanka’s national pastime of tea drinking is that an affordable high-quality cup of tea remains out of reach for many Sri Lankans despite Ceylon tea’s premium reputation. With its promise of two cups for every teaspoon, Ran Kahata seeks to address this disparity, aiming to convert consumers of loose tea into branded buyers. This value-for-money product’s messaging centres on affordability and hygiene, delivering a strong, satisfying cup while addressing the quality risks associated with unpackaged tea.This year Ran Kahata embarked on a journey to emotionally capture the hearts of the value for money tea purchase decision makers- women. The campaigns that captured aspects like load balancing, attire based objectification and family planning drove the brand closer to consumers’ hearts.

Our tea business recorded steady performance marked by some structural realignment during the year under review amid daunting cost pressures. The 18% VAT on branded tea proved particularly challenging, though Sunshine Consumer Lanka was able to withstand the impact, posting 3.6% year-on-year growth parallel to a notable level of volume increase. The strategic market approach the consumer segment is built on served as a foundation to this performance.

Watawala, Ran Kahata, and Zesta, our three flagship brands continued to hold their stronghold on the branded market during the year under review, with each brand occupying its respective spot (one, two, and four, as previously mentioned) and collectively commanding a market share of over 50%. All three brands delivered within their categories: Watawala in the mass market, Zesta in the premium space, and Ran Kahata as a value-for-money bridge for consumers transitioning from loose tea to a higher quality product.

An important strategic consideration for the tea business in 2024-25 was absorbing the tax burden without taking a hit to our volumes. With this in mind, Sunshine Consumer Lanka introduced a modest 5% price increase during the reporting period in a bid to preserve affordability in what otherwise remains a price-sensitive, inelastic category.

Meanwhile, the broader operating environment, characterised by rising input costs and shifting consumer dynamics in the wake of multiple crises, accelerated Sunshine’s shift toward long-term brand equity over short-term promotions. Marketing investments were redirected intoequity building, media and digital visibility, onground activations and packaging upgrades, digital engagement,Media engagement and in-store visibility, particularly.

The year under review was also marked by a structural milestone for the consumer goods vertical which led to increased efficiencies for the tea business: the merger of the tea and confectionery sales forces into a unified FMCG sales team. Completed ahead of schedule in the first quarter, this long overdue integration responded to shared retail touchpoints and the need for leaner, more agile execution. While initial resistance was expected from sales teams and distributors accustomed to category silos, the new model has already improved productivity, reduced redundancies, and expanded Sunshine’s reach across 99+active SKUs.

Given the population’s propensity for high levels of tea consumption, Sri Lanka’s tea market has already been fully penetrated. Against this backdrop, Sunshine Consumer Lanka’s strategic focus has shifted from expansion to substitution, increasing market share through sharper execution, consistent quality, and brand differentiation in a concerted effort to stay ahead of the curve. The business also continues to invest in product innovation, with exciting new developments in ready-to-drink teas, wellness blends, and capsule formats, all of which has helped Sunshine stay relevant in a maturing but still deeply entrenched consumer category.

With the macroeconomy showing significant signs of recovery and growth, Sunshine’s tea business is cautiously optimistic for a more productive new financial year. Entering 2025-26 with a strengthened distribution model, a stable product portfolio, and clear forward momentum, we are well-positioned not just to retain our existing market leadership, but to deepen our impact on the industry.