Tata Global Beverages – Basic insights for potential investors

Generally I am media shy. Hence in spite of being the top investor into the Tata group from Mirdiff, an upmarket residential location in Dubai, I am not hounded by press reporters. I know that I can enjoy this peace and calm only for a few more months until eventually I get to be the top investor from the Middle east into the Tata Group.

Generally being adventurous, yet conservative in terms of sector investment, I have limited my exposure to Tata Steel & Tata Global Beverages. The rationale is the trustworthiness of commodities & food sector.

Currently Tea accounts for nearly 70 per cent of Tata Global Beverages’ revenues with Speciality tea making up 15 per cent.
Coffee accounts for 25 per cent of its revenues.
While water, a relatively newer line, accounts for 2 per cent.

As per strategic plan, Tata Global Beverages is targeting to increase revenue from the value-added segment thus aiming at boosting revenue from:

Speciality teas to 30 per cent,
Coffee to 35 per cent and
Water to 10 per cent.

Towards increasing the footprint in USA – the world’s largest coffee market, Tata Global Beverages is actively looking at alliances and acquisitions. Currently, the US market is tapped in through the brand EIGHT O’CLOCK. The brand Eight O Clock is a product of an alliance between Tata Coffee and Green Mountain Coffee Roasters. Green Mountain Coffee Roasters own Keruig, the largest single-serve coffee machine operator in the US. The Eight O’Clock branded coffee pods for Keurig machines (often referred to as K-cups) has helped in significantly increasing the market share in the US. As you would have guessed it right, Tata Global Beverages has invested into Tata Coffee.

The international business accounting for 66% of consolidated revenue is growing steadily. In addition to strong growth in Europe & US, the south Asia business in Pakistan & Bangladesh is growing well.

Various popular brands which bring revenue for the company includes:

Tetley, Tata Tea, Grand Coffee in the Russia, Chakra Gold Tea in India, the Tata Tea Gold, Eight O’Clock Coffee, Grand Coffee, Himalayan water, Tata Water Plus, Tata Gluco Plus, Starbucks in India(Tata Starbucks).