Tata Extends its Product Range to Become a Serious Player in Overall Beverages
Tata Global Beverages Ltd (TGBL) – Tata Tea Ltd’s new corporate name – continues to implement its globalisation plan with the aim of eventually becoming a leading good-for-you beverages company. In hot drinks, the company is mainly present in tea and coffee. Its core product is tea, in which it is the global number two.
Tata is an essentially mass-market player, but the company is working hard to offer more price points. In the hot drinks business, TGBL has a broad regional, if not global, profile, although its presence is concentrated in a relatively small number of markets, led by India and the UK. In some markets, such as Russia and China, TGBL is present through equity ownership or joint ventures.
Looking forward, TGBL aims to achieve revenues of US$5 billion in 2015 (US$1.5 billion in 2010). The company has embarked on an aggressive acquisition-led growth strategy in recent years, focusing not only on hot drinks but also soft drinks.
Essentially, the company has a two-pronged growth strategy, encompassing both organic growth and acquisition, reflected in its interesting and bold product innovation and equity investment activities in Russia (Grand coffee and tea) and the US (Activate functional water). The highlights of 2009/2010 included the high-profile launch of Tetley in Saudi Arabia, the launch of Tetley Liquid Concentrate in Canada and it has the plan in place to introduce Tetley Liquid Concentrate to other markets. The potential leveraging of the core Tetley global brand name in many beverage categories is encouraging and forward thinking.
During January 2011, TGBL’s subsidiary Tata Coffee Ltd entered into a non-binding Memorandum of Understanding with Starbucks Coffee International with regard to a potential strategic collaboration in the areas of sourcing coffee beans and the utilisation of coffee roasting facilities to meet the requirements of Starbucks for its proposed retail operations in India and other countries.
This agreement will give TGBL an opportunity to not only increase its revenue from coffee supply but also learn more about coffee brand management and marketing.
For further insight, please take a look at Euromonitor International’s latest global profile: Tata Global Beverages Ltd in Hot Drinks.