Tata Tea may vend a bigger retail plan
Daily News and Analysis — June 6, 2007

Tata Tea is working on developing new formats to sell tea and coffee for the domestic market.

The company may create vending and outdoor formats in tea apart from introducing brands at the premium end and the mass market.

For coffee, it proposes to take its "Mr Bean Coffee" retail cum store format, now present in Kochi, to a host of other cities across south India. Tata Coffee may also explore a pure retail format next year once its non-compete clause with Barista comes to an end in 2008.

Addressing what it calls the "white spaces", the group will be experimenting with a host of new formats in beverage business in the current year.

Without divulging details, Percy Siganporia, managing director, Tata Tea, told DNA Money: "In India, we have three separate verticals or commercial ventures including tea, coffee and now mineral water. We may be looking at out-of-home consumption and retail formats where we are not present currently."

Out-of-home tea drinking, unlike coffee, is yet to catch up in India and has a negligible presence in the country.

The tea major is likely to come up with innovations in the premium segment.

"The mid-range is the largest part of the branded tea market and the company may be evaluating the top-end and the mass segment of the domestic tea brand space," Siganporia said. Tata Coffee, on the other hand, is lining up retail plans by expanding five additional outlets of Mr Bean Coffee Junction, its coffee chain, in the current year.

"We will be expanding these outlets in cities like Bangalore and Hyderabad.

If this is a success, we may expand this through the franchise route nationally at a later stage", M H Ashraff, managing director, Tata Coffee, said.

Tata Coffee had exited from the Barista chain of coffee retail outlets in 2004 by selling off its 34.31-per cent stake to Sterling Infotech Group.

"We may explore getting into a pure retail format only next year, when the non-compete agreement with Barista comes to an end," Ashraff said.

With 7000 vending machines under the Jiffy brand, Tata Coffee plans to increase this by 25 per cent in the current year across the country.