The 52-year-old Tata Global Beverages Limited wants to get cool and hip and resonate with the demanding, affluent young consumers of this country. It recently launched its maiden coffee brand, Grand and entered the premium teas through Fusion. Both targeting consumers who are looking for a change, quality conscious and not easy to convert.
The genesis of this was when Tata Tea was rechristened as Tata Global Beverages Limited (TGBL). The strategic reorganisation was done to focus on becoming a global leader in the fast growing $160 billion ‘good for you’ beverage market. The over $1 billion group integrated its tea, coffee and water brands and global businesses under a single management team. Under TGBL, brands like Tetley Tea, Tata Tea, Himalayan and Good Earth were joined by brands like Eight O’ Clock Coffee in the US, Poland’s herbal tea Vitax, Czech tea brand Jemea, and a few indigenous brands such as Chakra Gold and Kanan Devan. It also created 6 global hubs.
“We are doing a lot of launches this year. We are looking to acquire new consumers and augment market share. We have a clear thought process and strategy on how we want to go about it”, explains Sushant Dash, regional president – India at Tata Global Beverages. A good place to start is the coffee launch. The second focus area is capturing the premium space for health and wellness beverages.
For instance, Fusion is by far the most expensive black tea available in India. The objective: “to update the black tea consumer,” says Dash. Relevant considering TGBL estimates the branded tea market to be worth Rs 13600 crore by value per annum with premium teas enjoying a value share of 18% and a volume share of 11%.
Helping this trend towards premiumisation along is cafe culture. Tata Starbucks Private Limited, the 50:50 joint venture opened the doors to the first Starbucks outlet in 2012. Dash observes, “Cafe culture has been around for a long time but it is now seeing phenomenal growth. That will translate into people wanting to have coffee on other occasions than just out of home. And I think with new players like us, with innovations and differentiated offering, we will help the category grow faster.” But interestingly, the company will not be supplying Grand to the Starbucks outlets or build the brand via the retail chain.
There are other triggers too that have pushed TGBL to take the plunge into the `1300 crore instant coffee market. The distrubition system is already in place and expertise in terms of plantation, roasting, and coffee making. “Very clearly the youth is looking at more beverage occasions”, says Dash.
The south market too is realising modernity cues because of convenience. And thus there is a shift from traditional R&G (roast and grind) to instant coffee. The size of the packet coffee market is estimated at around `2500 crore of which instant coffee is around `1300 crore, growing at around 4%-5% annually. However, for the last 3 years the R&G brands are degrowing, says Dash. Not all is hunky dory. On one hand, the company is trying to consolidate new products, but it is also tackling its inadequate market share in “white space geographies”.
For instance, western India especially Maharashtra, Rajasthan and Gujarat. But the company has a strategy up its sleeve. “We have launched a new brand, Tata Tea Gold Mixture, just for Maharashtra. It is one of our weak markets. There are 4-5 such markets which are large enough to be treated as individual countries or markets by themselves”, says Dash.
On the other hand, experts feel that marketing campaigns for both Grand and Fusion are not effective enough. “The company is associated with the iconic Jaago Re and other powerful marketing campaigns tackling several national issues. To that extent the ad campaigns of both Grand and Fusion are like flash in the pan”, said a top brand analyst under the condition of both Grand and Fusion are like flash in the pan”, said a top brand analyst under the condition of anonymity, adding, “Not sure if the two campaigns will push or motivate the upper end consumers to pick up the products unless they create more operative marketing activities around both Grand and Fusion.”
Source:Â Economic Times
