PT. Sariwangi AEA (herein after referred to as SAEA) was founded by Mr. Johan Alexander Supit and was started the production in 12 February 1973. SAEA is the reputable company which is in the top 4 as tea producer which production capacity of 12.5 thousand ton after PTPN VIII who is the biggest tea producer with 67.8 thousand ton, PT. Unilever Indonesia Tbk with 23 thousand ton and PTPN IV with 21 thousand ton.



The bigger business of SAEA is exporting processed tea non branded or customer brand base to overseas such as United States, Rusia, England, Australia middle east country like Iraq and other countries. N=Besides that SAEA also serving domestic market.

The tea market was valued IDR 8.7 trillion in year 2006, in volume total annual tea market in Indonesia was 63.7 thousand tons. The market is estimated will growing by 10.3% in the next five years and can be reached IDR 9.7 trillion in year 2011, in volume estimated to be reached 68.7 thousand tons. From the total market green tea and black standard tea contribute around 65% of the market or equivalent to IDR 5.6 trillion in year 2006 and estimated will be growth by 12.5% in the next five years or equivalent to IDR 6.3 trillion in year 2011.

Considering tea market in Indonesia which will be continously growing by around 10% in the next five years, SAEA saw an opportunity to compete with the existing players by strengthening it's export business and try to expand it's domestic market by penetrating the retail market.

To gain the market share in Indonesia's retail market, SAEA was introducing an innovative product concept called "Teh Saring", a brand with unique value propositions to customers.

The objective of this paper is to propose route to retail market and distribution strategy for the company.



We analyze the company's current strategy with analyzing the 4P's which are product, price, place and promotion strategy. We got on overall picture regarding the company current strategy and achievement from interview and discussion with the President Director, general Manager of the company as well as with Sales and Marketing Team of the company to get detail information in term of their current operation. We also conducted market survey in jabotabek via questionare to Warteg, Rumah makan, warung, house hold and catering company. Study market research data provided by research agency, literatures and publications.

From our study, despite the unique value propositions and innovative product concept of 'Teh Saring", SAEA face a serious challenge in penetrating the local market due to limitation in distribution network capability and other resources.



based on our analysis and in order for the company to succeed in penetrating retail market in Indonesia we propose two alternative route to market for "Teh Saring" :

1. Appoint multiple distributor

2. In house distribution

Targeted area are subb urban and rural and focus on retailers, wholesales, and local distributions.

There is no doubt for PT. Sariwangi AEA to gain the retail market share in Indonesia if the company can select the right multiple distributor or establish in house distribution considering the company has strong brand name and the unique and innovative product.



Research Location : PT Sariwangi AEA

Supervisor ; Alex Iskandar Munaf, PhD.

Date accepted : September 3, 2008



Confidential until September 2014