The launch of vitamin and mineral enhanced B’lue by Danone Narang Beverages was followed by this week’s launch of Tata Water Plus by NourishCo, Tata Global Beverages’ joint venture with PepsiCo.
PepsiCo and Tata Global Beverages formed their NourishCo joint venture in 2010 to cater for the growing bottled water business in India which currently stands at around Rs 1,000 crore ($200m) – with large brands accounting for Rs 340 crore ($68m).
“We expect that by 2016, the JV’s turnover will touch Rs 700 crore with our product portfolio, which will be enhanced by then,” said Tata Global Beverages vice chairman R K Krishna Kumar.
Local companies such as Bisleri compete with Coca-Cola’s Kinley and PepsiCo’s Aquafina, alongside dozens of local and regional water businesses. Joint ventures also seems to show the way forward in India. Danone’s JV with Narang to create Danone Narang Beverages has found success with Qua and was among the first to offer enhanced waters with Qua+. And Tata is not just involved with Pepsi. In January, it teamed up with Starbucks Coffee Company, to create Tata Starbucks Limited, which own and operate Starbucks cafés in India.
The stakes are high in such a rapidly evolving market where safe hydration was the only agenda for years until the recent emergence of enhanced waters. Despite global uncertainties, India has been attracting long-term investment. Foreign direct investment in India from January to August 2011 surged 50% from a year earlier to nearly $21 billion.
India offers robust growth prospects for food and beverages makers as its improving economy – estimated to grow 7.6% this year – is leaving more disposable income with an expanding middle class, which is increasingly adapting to western tastes and spending more on beverages and processed foods.
Let’s not forget that Tata gained its taste for vitamin water way back in 2006 when it took a 30% stake in US based Vitaminwater maker Energy Brands for $677 million. At the time many wondered why. The question was answered when The Coca-Cola Company bought Energy Brands only a few months later for $4.1 billion in cash. Tata pocketed a cool $1.2 billion, creating the fighting fund for acquisitions and new product development.
No wonder Tata Global Beverages website features a massive banner stating: ‘sustainable hydration’.
© FoodBev Media Ltd 2024