Tata Coffee to beef up
Business Standard - June
Tata Coffee is moving from being a supplier
to third-party labels to a company that
owns labels in the instant coffee market.
The company has only a small presence in
the branded market through its labels Mysore
Gold and International Tata Cafe. Meanwhile,
it is a major supplier of instant coffee
to Russia, Ukraine and East European markets
With the acquisition of
Eight O' Clock Coffee of the US, Tata Coffee
is looking at making its presence felt in
the Commonwealth of Independent States (CIS)
and a few South East Asian countries via
the brand. Confirming this, M D Kumar, vice-president
- finance, Tata Coffee, said, "The
perception in Russia and other CIS markets
is that anything from a western country
is good. Keeping this in mind, we plan to
introduce coffee under the Eight O' Clock
At present, Tata Coffee
exports 4,000-5,000 tonne of instant coffee.
Of this, the share of the company's own
Mysore Gold and International Tata Cafe
is negligible, he said. The 70,000-tonne
Russian market - mainly centred on instant
coffee - is one of the largest and grows
14 per cent year-on-year. To cater to this
market, the company is setting up a Rs 72
crore freeze-dried plant in India. The plant
is expected to be operational by the end
of this financial year.
Keeping Russia in mind,
the company, which used to export through
Beeyu Overseas, has decided to form a joint
venture company - Alliance Coffee Limited.
This company will undertake sale of its
instant coffee products globally. Beeyu
Overseas has a strong presence in Russia
and the CIS countries. It has been selling
tea from India for the past 15-20 years.
Tata Coffee plans to leverage this to expand
to other markets, said Kumar.
On the possibility of
India being a sourcing base for Eight O'
Clock Coffee, Kumar said there was no plan
at this juncture to change the sourcing
pattern. "In future, for value added
products, India may figure. Currently, we
will not disturb the supply chain and quality
of the products," he said.