NourishCo, the 50:50 joint venture between Tata Global Beverages (TGB) and PepsiCo, set up to market good-for-you beverages, is eyeing an entry into foods as well.
Ashok Namboodiri, chief, sales & marketing, NourishCo Beverages, told Business Standard the JV company was evaluating the prospect of getting into foods in the second phase of the venture.
While he declined to spell out what NourishCo's foods foray would entail, persons in the know said the products would include fortified snacks and biscuits. This ties in with NourishCo's larger objective of having products that provide nourishment, they say. PepsiCo is already doing work in this area with Lehar Iron Chusti, a fortfied snack that is rich in iron and vitamins.
It is unclear whether Lehar Iron Chusti would be part of NourishCo in the future. But Namboodiri does say that like TGB, PepsiCo would also introduce its own set of products into the JV to strengthen its product portfolio. TGB has already included packaged water brand Himalayan into the NourishCo joint venture. The latter has a brand licensing agreement to market and distribute Himalayan in India and abroad.
Namboodiri says the JV will take Himalayan to markets abroad in the next six months. It will coincide with the Tata-Starbucks combine's attempts to push Himalayan through the latter's cafes in India and abroad. "Through Tata-Starbucks, Himalayan will get another retail avenue. It will help us," Namboodiri says.
The JV has also launched Tata Water Plus, a fortified packaged water, and Tata Gluco Plus, an energy drink earlier piloted as Lehar Gluco Plus, in Tamil Nadu. While Tata Water Plus has been developed by TGB, Tata Gluco Plus was developed locally by PepsiCo. Tata Gluco Plus has been priced at Rs 6 for a 200-ml cup -- Rs 1 more than the price during its test phase in Maharashtra. Tata Water Plus, on the other hand, has been priced at Rs 16 for a 750-ml PET bottle. NourishCo has launched zinc and chromium variants of Tata Water Plus, and will shortly launch a calcium variant of the product, too.
Namboodiri says the decision to use the Tata name rather than Lehar for Gluco Plus was taken keeping in mind the heft of the Tata brand name. Both products will be pushed both in urban and rural areas. The game plan is to move to neighbouring Andhra Pradesh and Maharashtra before going national. NourishCo will also be taken abroad in a few years, Namboodiri says.
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While plans are to have a turnover of Rs 600-700 crore by 2016-17, both Tata and PepsiCo have invested just Rs 50 crore into the venture. Namboodiri says the business model for NourishCo will be "asset and balance-sheet light".
"We propose to outsource manufacturing and be close to consumption markets," he says. In earlier conversations with Business Standard, PepsiCo India chairman Manu Anand had spoken of dispersed production that would mostly involve contract manufacturers with facilities within 200-250 km of retailers.
The contract manufacturer for Tata Water Plus in Tamil Nadu is Chennai-based Christy Foods, while Tata Gluco Plus is being manufactured at PepsiCo's plant in Aurangabad.