April 2015 | Philip Chacko

'The global market is vital to our health'

Tata Global Beverages plans to strengthen brands, innovate and build scale to drive its global business. Excerpts from an interview with chief executive officer Ajoy Kumar Misra.

Will TGB concentrate on its core businesses of tea, coffee and bottled water over the next five years?
Yes, TGB will continue to focus on natural beverages: tea, coffee and water. We believe there is strong potential for further growth and expansion in these categories. For example, some of the new opportunities we have pursued include entry into the pods (single serve) segment in markets such as the United States, Canada and Australia, functional water in India, green tea and specialty teas across geographies, and premium teas like Tetley Tea Masters in Australia. We are the world's second-largest tea company and we will continue to increase the share of coffee and water in our overall portfolio.

TGB appears to be especially keen to push up numbers in its coffee business. How is the company planning to do that, and will India be the principal market for this push?
TGB is present in the coffee business in the United States through Eight O'Clock Coffee, through Grand Coffee in Russia, the recently acquired Map Coffee in Australia, and through Tata Starbucks in India. We also have a stake in the coffee plantations business through our subsidiary company, Tata Coffee, in India.

In the United States, we entered the fast-growing pods market through Eight O'Clock Coffee's alliance with Green Mountain Coffee Roasters; this has helped TGB expand its presence further in the country. In Australia the acquisition of Map added coffee to TGB's portfolio. In Russia we are strengthening distribution for the Grand Coffee brand, and in India the Starbucks stores use coffee sourced from Tata Coffee's plantations and also stock the specially crafted 'India Estate Blend'. Tata Coffee is moving up the value chain in plantations as well as with its instant coffee business.

Find out how Tata Global Beverages adds long-term value to its business through sustainable operations. Watch the video
How vital is the global component of TGB's business to the good health of the company? What the challenges involved in enhancing the size and strength of the international pieces?
Over 65 percent of TGB's revenues come from markets outside India, which means global markets are vital to the health of our business. In this context, the macroeconomic environment has been challenging in some parts of the world and economic volatility has to be managed.

It is important to strengthen our brands, keep them relevant to consumers and get our distribution right. In many developed markets we are seeing growth shifting to new segments such as pods and specialty teas, coupled with an increased focus on health and wellness. This is a challenge as well as an opportunity for TGB to think innovatively and explore new routes to market, based on changing consumer behaviour and consumption patterns. In the coffee and water categories, the challenge facing us is to build scale in the key geographies where we are present.

This is an excerpt of the interview from the April 2015 issue of Tata Review in which chief executives of 14 Tata companies speak about the performance of their companies in the year gone by and their plans for the future:
Tata Consultancy Services: 'At TCS, it's always about the team'
Read the complete interviews and more in Tata Review
Jaguar Land Rover: 'Will deliver 12 significant product actions in next 12 months'
Tata International: 'Scale is necessary for a trading company'
Tata Steel: Driven by innovation
Tata Steel Europe: 'European countries remain the key to our success'
Tata Motors (commercial vehicles): 'We will deliver tangible value to our customers'
Tata Motors (passenger cars): 'We plan to introduce two new vehicles every year'
Tata Chemicals: 'Fiscal 2016 is going to be a year of consolidation for us'
Titan Company: 'Will continue to explore opportunities in lifestyle space'
Tata Communications: 'Mindset is the key'
Rallis India: 'Want to be among the most valuable companies in our domain'
Tata Technologies: 'We see opportunities in aerospace and defence'
Voltas: 'We look forward to deploying our strengths...'
Tata Projects: New areas of business, new opportunities