Tata Global Beverages (TGB) will go slow in introducing its international brands in India, where consumers are “still not ready to pay a premium price” for tea and coffee products.
The Tata Group company would rather focus on the mass segment, says a top official.
Most of the company’s premium global brands such as Tea Pix or Vitax are unlikely to see an imminent launch in India. The Tetley premium brand is the only exception, which was introduced to Indian consumers long ago.
“Indian consumers are still not ready to pay a premium price for the global brands in our portfolio, and even when it comes to acquisitions, we would primarily look at mass brands in India,” said Ajoy K Misra, Managing Director and CEO.
The company had earlier tried to enter the super premium category in India with its own brands like Tea Veda, but is now defocusing on this segment. TGB has also divested its investments in US-based Activate, a performance beverage and bottled water firm that was in the premium segment.
The company might also launch coffee brands in the retail segment. At present, it is present in the business to business segment through Tata Coffee.
Brands such as Eight O’Clock Coffee from US or Grand from Russia could be contenders for the Indian market, but Tata’s packaged coffee Mr. Bean is more likely to enjoy a national retail presence. “Eight O’Clock Coffee is an entry-level brand in the US, and we have also taken it to Canada. It has the potential to become a global brand,” he added.
Meanwhile TGB’s own products such as Himalayan and Tata Tea are already being positioned as global brands. Natural mineral water brand Himalayan may not be making money in India, but is being ready for a global foray.
“We are already selling Himalayan through the modern trade in places like Singapore after selling it from Starbucks,” said Misra.
Besides, brands such as Tata Tea have found a niche among the Indian Diaspora in Canada after being in that market for the past two-three years. “Tata Tea already has a 2-4 per cent market share in Canada and we would be formally launching it in more markets as it has the potential to go global.”
In the Indian market, TGB is building its green tea portfolio through its acquired Tetley franchise. “The tea category is growing at 4-5 per cent while green tea is at 30 per cent, and we are the market leader in this segment,’’ added Misra.