The brands that will be given a global push are Tetley, Tata Tea, Himalayan and Eight O’ Clock Coffee

The beverage arm of the $100-billion (Rs 6 lakh crore) Tata Group has prepared a blueprint that will see it devote its attention to four “power brands” in its quest to achieve a turnover of $5 billion (Rs 30,000 crore) in the next three years.

The list will include products such as Tetley, Tata Tea, Himalayan and Eight O’ Clock Coffee, which will be given a global push. At the same time, the Rs 7,271-crore Tata Global Beverages (TGB) will not take its eyes off regional products either, pushing these aggressively in their home markets. On this list are brands such as Kanan Devan, Chakra Gold and Gemini in South India, Vitax in Poland and Joekels in South Africa.

The blueprint, explains TGB Managing Director Harish Bhat, is in keeping with company Chairman Cyrus Mistry’s vision to invest significantly behind the firm’s brands. At the company’s recently-concluded annual general meeting in Kolkata, 44-year-old Mistry, who became chairman last year, said that the foundation for investment behind the firm’s products had been laid. “It is crucially important to grow our brands in India and overseas. There is also a need for innovations which need funds,” he said.

TGB derives 65-70 per cent of its revenues from international markets and the balance from India.

Tetley, one of the products on the global power list, already sells in a number of markets outside its home turf of the UK. This includes India, where it competes with Twinings and Brooke Bond Taj Mahal from Hindustan Unilever. Tata Tea, an Indian product, meanwhile, has been taken to markets such as Canada and West Asia, while plans are afoot to take Himalayan packaged water, also an Indian product, which was acquired in 2007 by the company, to Southeast Asia in the near term.

Bhat declines to indicate whether new products would be added to the global or regional list through new acquisitions. Outgoing Vice-Chairman R K Krishna Kumar, at the TGB AGM, had hinted that the company was looking at a new acquisition. He had said, “TGB will make a major acquisition and be a truly worldclass company, not in the tea or coffee space but in new beverages.”

As things stand, TGB derives nearly 70 per cent of its revenues from tea, 20 per cent from coffee and five per cent from water. The plan is to take the contribution of water and coffee to 10 per cent and 25 per cent, respectively, in the next three years, Bhat said. Tea’s contribution, on the other hand, would come down to about 60 per cent, he added.

TGB proposes to achieve this by pushing its joint ventures with PepsiCo and Starbucks aggressively in the next few years. “A total of 18 stores have been opened so far by Tata Starbucks in Mumbai and Delhi. This count will go up as we move forward,” he said.

On the joint venture with PepsiCo (called NourishCo), Bhat indicated that in-house brands Tata Water Plus and Tata Gluco Plus were doing well.

“Tata Water Plus has seen higher growth than Himalayan packaged water (in the June quarter). But this is in the markets of Tamil Nadu and Andhra Pradesh, where the brand is currently present. The plan will be to take it to other markets in the country,” he added.

source: http://www.business-standard.com / Business Standard / Home> Companies> News / by Viveat Susan Pinto / Mumbai – August 03rd, 2013