Even as the café retail business is seeing a growth of 30 per cent per annum in India, Tata Coffee has no plans of re-entering the café retail business. Tata Coffee had tried its hands in this business when it acquired 34.31 per cent stake in Barista in 2001. Having sold the entire stake in 2004, Tata Coffee feels that it won’t be easy to enter the café retail market again.
Speaking on the sidelines of the India International Coffee Festival here, MH Ashraff, MD of Tata Coffee told FC, “Breaking into the café retail business now will be tough with existing players. We feel the timing of our entry was correct.” The café retail business is expected to see 5,000 outlets in five years, up from the existing 1,200 branded outlets across India. Ashraff added, “Now the scope in the café retail market is limited. We keep hearing about international players planning to enter this segment as well. Therefore, for the domestic market, we intend to focus on growing the distribution of our Mr Bean and Coorg Pure brands. These two brands have negligible presence in southern markets currently.”
The two primary brands of Tata Coffee are limited to southern markets. Since the two brands are not into instant coffee, it does not have a pan-India presence. The instant coffee segment is dominated by Nestle across India.
Tata Tea has been assigned the task of marketing and distribution of the two brands in southern markets. According to Ashraff, the market share of these two brands in the southern market stands at mere 5 per cent.
Further, Tata Coffee has no plans of introducing the Eight O’ Clock Coffee brand in India. The company acquired the US-based Eight O’ Clock Coffee last year to strengthen its presence in the global market. Export has always been a major business strategy for Tata Coffee with domestic market accounting for only 10 per cent of its revenues. The company reported revenues of Rs 1,121 crore for FY09, including revenues of Eight O’Clock Coffee.
Source: Financial Chronicle
