 Mumbai:
If
things brew as it is planned, we soon might drink some tea
made by Godrej Industries. The group is said to have roped
in Pranab Barua, former managing director of Reckitt Benckiser
and before that a director in Hindustan Lever (HLL), to
head Godrej’s foray into the hot beverages (tea and
coffee) business.
Recently
Godrej Industries incorporated a new subsidiary, Godrej
Tea, in which the Godrej group will hold a 60-per cent
stake, while Barua and two non-resident Indians will hold
the remaining 40 per cent.
Senior
Godrej officials reveal that initially Godrej Tea will
identify a range of tea and coffee flavours accustomed
to Indian consumers’ taste. At a later stage the
group might look at picking up a stake in one of the national
coffee retail chains. The officials add that the group
feels this category has a lot of potential and there is
room for more players.
 The
company’s manufacturing operations will be set up
in the southern part of India, as tea is sourced from
the auctions and blended and packaged there. The brand
name of the tea has not been chosen yet though it will
be launched under the Godrej umbrella.
The
company is in the process of setting up a full-fledged
top management team under Barua. The tea industry in India
is at present going through uncertain times. With countries
like Sri Lanka and Kenya giving stiff competition to Indian
teas, the industry is gearing up for tough times ahead.
In
the packaged tea market HLL is the market leader with
a share of around 30 per cent, followed by Tata Tea at
20 per cent. There is cut-throat competition among the
leading players in the packaged tea market with each player
trying to outdo the other in offering freebies and prizes
to keep sales moving. As a result, collections are actually
falling.
But,
in the past two to three years, out-of-home consumption
of hot beverages has been on the rise and tea and coffee
vending machines are fast becoming a lucrative source
of revenue. HLL and Nestle have got into this segment
in a big way.
Coca-Cola
has also launched its Georgia brand (also available through
vending machines), which will be available at select McDonald’s
outlets. Coke has a global tie-up with McDonald’s
in soft drinks. The latter has also tied up with Nestle
to offer Nestea and Nescafe at select McDonald’s
outlets.
Apart
from this the success of the Barista chain of coffee outlets
and Café
Coffee day has led many players to eye the hot beverages
market.
|
