The Rs 6,631-crore Tata Global Beverages (TGB) has dropped its plan to foray into the food segment. Instead, it would focus on the tea, coffee and water spaces.
Two years earlier, Tata Sons Chairman Ratan Tata had indicated the firm might consider a foray into the food segment. Subsequently, the company had said it would look at acquisitions to enter the food space.
However, MD Harish Bhat said, “We are a natural beverages company and our focus will be on tea, coffee and water,” said. Of the three beverage segments, TGB proposes to push coffee and water aggressively, eyeing greater revenue from these areas, Bhat told Business Standard.
Currently, tea accounts for about 70 per cent of TGB’s turnover, coffee accounts for 25 per cent and water two per cent. The game plan, according to Bhat, is to raise the contribution of coffee to 35 per cent and that of water to about seven per cent in three to four years. While tea remains a key vertical, Bhat admits the dependence on tea would have to be reduced to make the portfolio a well-rounded one.
For this, he said, the company was counting on its alliances with Starbucks and PepsiCo. These would increase its presence in the coffee and water segments. The company is considering both organic, as well as inorganic measures, to drive growth.
In last 10-12 years, TGB carried out six to seven acquisitions globally, including notable ones such as Tetley in the UK in 2000. It continues to scout for acquisitions in eastern and central Europe. However, Bhat says now, the emphasis is on consolidation. “For instance, under Himalayan, we could do sparkling water besides still water, which is already part of our portfolio. Under NourishCo, the joint venture with PepsiCo, 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.
It is also possible products such as Eight O’ Clock Coffee from the US or Tetley Chai Latte from Australia would be brought to India. Bhat, however, declined to indicate timelines for these.
Currently, the company’s leaf tea portfolio in India has Tetley at the top end, Tata Tea Gold in the mass-premium brand, Tata Tea Premium (a mid-tier brand) and Tata Tea Agni, positioned at the lower end of the market. TGB’s dust tea portfolio, targeted at markets in South India, include Gemini, Chakra Gold and Kanan Devan. Products such as Kanan Devan and Tata Tea had been taken to markets in West Asia, Bhat said. Tata Tea is also available in the UK and Canada.