The Rs 6,631-crore Tata Global Beverages (TGB) has dropped plans to foray into foods, focusing instead on tea, coffee and water. It may be recalled that two years ago outgoing chairman Ratan Tata had indicated at the company's annual general meeting in Kolkata that the firm could consider a possible foray into foods. The company had subsequently said that it would look at stepping into foods via acquisitions.
But this appears to be shelved for now as the company looks to keep its focus on beverages. "We are a natural beverages company and our focus will be on tea, coffee and water," Harish Bhat, who took over the reins from erstwhile MD Percy Signaporia in July, said.
Of the three beverage segments, TGB proposes to push coffee and water aggressively eyeing greater revenues from these areas, Bhat said in a conversation with Business Standard.
Currently, TGB derives nearly 70 per cent of its turnover from tea, 25 per cent from coffee and 2 per cent from water. The gameplan, according to Bhat, whose first stint with TGB stretched from 1988 and 2000 and who has also worked with Tata Teleservices and Titan Industries, is to take up the contribution of coffee to 35 per cent and water to about 7 per cent in about three to four years. Tea subsequently will come down to about 65 per cent of turnover. While tea remains a key vertical, Bhat admits that the dependence on tea will have to be brought down to make the portfolio a more well-rounded one.
For this, Bhat said that the company was counting on its alliances with Starbucks and PepsiCo to push up its presence in coffee and water besides looking at organic and inorganic measures to fuel growth.
In the last 10 to 12 years, TGB, which was earlier Tata Tea Ltd, has wrapped up some six to seven acquisitions across the world including notable ones such as Tetley in the United Kingdom (UK) in 2000. It continues to scout for acquisitions in areas such as East and Central Europe, though Bhat says the emphasis now is on consolidation and pushing growth via organic means. "For instance, under Himalayan we could do sparkling water besides still water which is already part of our portfolio. Under the joint venture with PepsiCo called NourishCo, there are possibilities to expand the portfolio of nutrient or vitamin fortified water under Tata Gluco Plus. Currently we have a zinc variant under Tata Gluco Plus. We could launch a calcium variant and other such vitamin fortified products in the future," he said.
The possibility of getting products such as Eight O' Clock Coffee from the US or Tetley Chai Latte from Australia into India was also there, though Bhat declined to indicate timelines for the same.
Currently, the Indian portfolio comprises the following brands - Tetley at the top end of the market, Tata Tea Gold, which is a rung below as a mass-premium brand, Tata Tea Premium, which is a mid-tier brand, and Tata Tea Agni, which is positioned at the lower end of the market. This is TGB's leaf tea portfolio, which is available across the country. TGB's dust tea portfolio, which is targeted at the south of India include Gemini, Chakra Gold and Kanan Devan.
Of the Indian brands, products such as Kanan Devan and Tata Tea have been taken to markets in the Middle East, Bhat said. Tata Tea is also available in Canada and the UK respectively.