 "Himalayan can be the next Evian of the world: Ajoy Misra")
The first decade of the 21st century was marked by aggressive mergers and acquisitions for Tata Global Beverages (TGB). The first four years of the second decade has been about alliances and joint ventures. Ajoy Misra, managing director, who took over from Harish Bhat this April, tells Viveat Susan Pinto the firm is open to more partnerships and its acquisition strategy has not been shelved. Excerpts:
Will you extend your joint venture with PepsiCo into other markets and categories? Currently, the JV is restricted to water, to selling, distributing and marketing these products in India. Will you explore other areas like you did with Starbucks, where you inked a sourcing deal before getting into a JV with them?
At this point, we are partners in NourishCo and we sell and distribute through the PepsiCo system all over India. Can there be other forms of colloboration with PepsiCo, beyond India? The possibilities are there. This is what partnerships are all about. They are, for instance, not in tea. Iced tea they distribute in some markets. We are not in iced tea. There are some areas where there is no overlap of operations. To answer your question, you can expect that whereever there are synergies, there will be some discussion between us.
I'm not surprised that there will be others entering the beverage market. It is a huge one and will grow. Branded beverages as a segment is still quite nascent in India. Even branded tea, for instance, has enormous potential. Half the tea consumed in India is unbranded. Similarly, there is a huge opportunity in branded bottled water. We are a fraction of what countries such as China and other Asian markets consume. What I am saying is that the beverage market (in India) is huge and will attract new players. We are not worried about their entry.
Where do you see Himalayan (their mineral water brand) in a few years? You have already launched it in Singapore.
Himalayan is a a big play for us. I believe it has the potential to be the next Evian of the world. We are exploring where we can take Himalayan in the Asian region and beyond; we are exploring at least half a dozen markets. And, contrary to the perception that we are depending on Starbucks for this expanson, that is not so. We are doing it ourselves, by tying up with distributors. The Singapore foray through Starbucks was one-off. We launched Himalayan in modern trade in Singapore through a local distributor. Today, we are available in most modern trade stores there. We have no deal with Starbucks to push Himalayan in their stores abroad. Neither are we dependent on them if they voluntarily choose to promote Himalayan in their stores. We are expanding Himalayan's base on our own.
Are you pushing any of your Indian tea brands abroad?
Our Indian tea brands are available through distributors in markets such as Kuwait and Saudi Arabia in the Middle East. The best example of the Indian push into global markets is the entry of Tata Tea in Canada. It already has a nearly two per cent market share in a country dominated by Tetley, which has 38-39 per cent share there. Yet, Tata Tea has made inroads. You can expect more of this Indian push, beginning with markets that have a strong Indian diaspora. We could also go beyond the Indian community in our international push of Indian brands.
Will acquisitions continue to be a big driver for you, as in the past decade (2000-2010)?
Yes, it will. We continue to explore inorganic opportunities abroad, as well as in India. And, we will pursue it even as we look at joint ventures and alliances in areas such as enhanced water, speciality teas and coffee. We will not do one at the cost of the other.
Will you extend your joint venture with PepsiCo into other markets and categories? Currently, the JV is restricted to water, to selling, distributing and marketing these products in India. Will you explore other areas like you did with Starbucks, where you inked a sourcing deal before getting into a JV with them?
At this point, we are partners in NourishCo and we sell and distribute through the PepsiCo system all over India. Can there be other forms of colloboration with PepsiCo, beyond India? The possibilities are there. This is what partnerships are all about. They are, for instance, not in tea. Iced tea they distribute in some markets. We are not in iced tea. There are some areas where there is no overlap of operations. To answer your question, you can expect that whereever there are synergies, there will be some discussion between us.
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What are you doing to ring-fence yourself against competitors such as ITC, which has announced its intent to step into beverages?
I'm not surprised that there will be others entering the beverage market. It is a huge one and will grow. Branded beverages as a segment is still quite nascent in India. Even branded tea, for instance, has enormous potential. Half the tea consumed in India is unbranded. Similarly, there is a huge opportunity in branded bottled water. We are a fraction of what countries such as China and other Asian markets consume. What I am saying is that the beverage market (in India) is huge and will attract new players. We are not worried about their entry.
Where do you see Himalayan (their mineral water brand) in a few years? You have already launched it in Singapore.
Himalayan is a a big play for us. I believe it has the potential to be the next Evian of the world. We are exploring where we can take Himalayan in the Asian region and beyond; we are exploring at least half a dozen markets. And, contrary to the perception that we are depending on Starbucks for this expanson, that is not so. We are doing it ourselves, by tying up with distributors. The Singapore foray through Starbucks was one-off. We launched Himalayan in modern trade in Singapore through a local distributor. Today, we are available in most modern trade stores there. We have no deal with Starbucks to push Himalayan in their stores abroad. Neither are we dependent on them if they voluntarily choose to promote Himalayan in their stores. We are expanding Himalayan's base on our own.
Are you pushing any of your Indian tea brands abroad?
Our Indian tea brands are available through distributors in markets such as Kuwait and Saudi Arabia in the Middle East. The best example of the Indian push into global markets is the entry of Tata Tea in Canada. It already has a nearly two per cent market share in a country dominated by Tetley, which has 38-39 per cent share there. Yet, Tata Tea has made inroads. You can expect more of this Indian push, beginning with markets that have a strong Indian diaspora. We could also go beyond the Indian community in our international push of Indian brands.
Will acquisitions continue to be a big driver for you, as in the past decade (2000-2010)?
Yes, it will. We continue to explore inorganic opportunities abroad, as well as in India. And, we will pursue it even as we look at joint ventures and alliances in areas such as enhanced water, speciality teas and coffee. We will not do one at the cost of the other.