Keynote speaker at the recent Global Soft Drinks Congress in Istanbul, Peter underlined a perception of health and the reassurance of integrity being key to a beverage’s success.
“Thirst is still an unrecognised issue for many,” he said, with 40% of the UK population mistaking the thirst trigger for hunger. “So the loyal, refreshed but dehydrated consumer needs motivating reasons and bundles of consumer satisfaction to ensure purchase.”
Looking recently at carbon footprint, he queried the number of kettles boiled to make hot drinks and calculated this as being as great a value as the whole of the tea market on a global basis.
“Just one email can destroy a brand,” he said, “so we have to ensure compelling, new brand experiences time after time.”
Tata’s beverage portfolio now includes Tetley, Tata Tea, Good Earth and Himalayan, along with regional and speciality brands such as Eight O’ Clock Coffee, Vitax, Jemca, Chakra Gold and Kanan Devan. Tetley Infusions, launched in 2009 in Canada, combine real brew Tetley tea with natural fruit juice and are an indicator on how this company plans to diversify and innovate to meet changing consumer tastes.
Where does Tata now fit in the global beverage marketplace?
Peter Unsworth: The Tata Beverage Group is currently the world’s second largest tea company. Over the last year, we have undertaken a strategic reorganisation of our businesses around the world in order to focus on the fast-growing $160bn market for branded ‘good for you’ beverages.
The company has announced plans to consolidate its business in tea, water and soft drinks. What’s the thinking behind this?
Unsworth: We’ve integrated our five beverage companies into a single, globally focused company with a new strategy to diversify away from our core market – tea – and build positions in this high growth sector of the drinks market.
Going forward, Tata Beverage Group, which has almost 3,000 employees worldwide, aims to bring new and exciting brands that will appeal to modern lifestyle choices, and to lead innovation in the beverage sector.
Where is the group focusing on global joint ventures and acquisitions?
Unsworth: If you look at the recent history of Tata and Tata Tea’s expansion, it’s clear that acquisitions have been a key part of our growth strategy. Our business strategy supports both organic and inorganic growth, including R&D, and we don’t expect that to change.
To enable us to better focus on the opportunities and challenges presented by different geographical markets, our newly integrated business has been organised into six key regions, each led by a regional president. A global executive team based in Uxbridge, UK, will drive and facilitate the regional teams. As we move forward, the group will continue to focus on growing its presence in our core markets including India, the UK, the US, Canada, Australia, Poland, France and the Czech Republic, through new product launches and strategic marketing campaigns.
Brands that resonate well in a wide range of international markets will continue to be driven globally, including Tetley, Tata Tea, Good Earth and Himalayan, and will be supported by regional and speciality brands such as Eight O’ Clock Coffee, Vitax, Jemc?a, Chakra Gold and Kanan Devan.
In order to achieve our ambitions for international growth and diversification, we’ve developed a strategy based on five key components, including product innovation, the creation of global brands, expansion into new channels and geographies, capitalising on the expertise of our people and maximising scale and integration efficiencies. At the heart of this strategy will be a focus on the way we innovate culturally in order to create new products that excite the market and our consumers.
Which ready to drink brands does Tata have?
Unsworth: Tata Beverage Group has the following RTD drinks in its portfolio:
T!ON was initially introduced in Chennai, southern India’s largest metropolis, and subsequently in the state of Tamil Nadu. This new brand is being rolled out to the three other states in southern India this year.
Himalayan is redefining the category of bottled water with its unique proposition of ‘hydration and wellness’ and its ‘Live Natural’ brand philosophy. Its certificate of purity derives from its source in the Shivalik range in the Himalayas and is currently available in regions of India.
The group apparently has plans to build in the high-growth areas of good-for-you beverages. Which sector are you looking at in particular: health and wellness, sports and energy, nutraceutical and beauty drinks, or something else?
Unsworth: All the products in our brand portfolio are from natural sources: water from its own natural source, tea and coffee grown from the ground, and we’ll continue to focus our product development in good-for-you categories.
At present, approximately 75% of our revenue comes from tea, and this balance will naturally evolve over time as we enter new segments. Our tea and coffee brands will equally play an important role in our transformation, as they provide steady cash flow for investment in growth.
How do you see smoothies, juices and functional drinks?
Unsworth: These are a possible opportunity for us either organically or through acquisition growth.
The company announced a 51% stake in Grand, the second largest tea and coffee brand in Russia, for an undisclosed amount. Other than Tetley in 2000, what have been your other major acquisitions?
Unsworth: Powered by the flagship brand Tata, and a slew of product brands catering to distinct and varying consumer needs, Tata Tea first became the volume leader in the branded tea business in India, the world’s largest tea producing and consuming nation, and then set out on a global ambition with the acquisition of the UK’s market leading brand Tetley in 2000.
This was followed by a string of further acquisitions, including Good Earth and Eight O’ Clock Coffee in the US, Jemca in the Czech Republic, Vitax in Poland and shares in Mount Everest Mineral Water in India and Joekels in South Africa.
In India, the company’s brands include Chakra Gold, Gemini and Kanan Devan. Do these include ready to drink formats or are they likely to?
Unsworth: No, the brands you mention don’t include RTD formats and are unlikely to.
You have many interests in coffee. With the success of Starbucks ready to drink and the Coca-Cola Illy partnership, will you be considering RTD coffee, and if so, in which markets?
Unsworth: Coffee is a regional focus for us at the moment, although an important part of our worldwide portfolio. We currently have no plans for RTD coffee, though I wouldn’t rule it out as a longer-term option.
Are you now working in conjunction with the Rainforest Alliance or Fairtrade? What proportion of your tea comes under these certifications?
Unsworth: Tetley is an active member of the Ethical Tea Partnership, and in February 2010 Tetley announced its commitment to achieve global Rainforest Alliance Certification by 2016. Our Good Earth tea brand is Fairtrade certified.
Where next for Tata Tea, geographically and strategically, and where do you see the group in five years’ time?
Unsworth: We have a vision to become a global leader in good-for-you beverages and an ambition to grow from a $1bn to $10bn company in the next five years. I’m excited about the future and the journey we’re on to get there. At the heart of our ambition will be a focus on the way we innovate culturally in order to create disruptive, new products that excite the market and our consumers.
Claire Phoenix is editor of Beverage Innovation magazine. Subscribe here
See our Flickr gallery of Tata Beverage Group products.
© FoodBev Media Ltd 2021
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