Tata Global Beverages: in search of tea drinkers
The lowering of black tea consumption is not being replaced fully by other forms of tea. In the UK, for instance, sales of ordinary tea bags are estimated to have declined by 14% between 2013 and 2016, according to market research provider Mintel
A presentation that Tata Global Beverages Ltd made last week to US-based investors gave a spring to its share briefly, before it cracked along with the market in the aftermath of India’s “surgical strike” across the border. After gaining 5% mid-week, it closed the week ended 30 September below the previous week’s close.
One item in the presentation, in particular, may have caught the attention of investors.
“Going forward”, it says, the company wants to increase focus on India, beef up its presence in Asia and the Middle East, and re-evaluate stressed businesses. That may be a good thing.
Now, the focus on India may seem strange. After all, South Asia (mainly comprising India) already contributes to 42% of turnover. Other important markets are Great Britain and EMEA (Europe, the Middle East and Africa) which contribute to 30% of sales, and the US, Canada and Australia which contribute to 28%. Tea is the major product, accounting for nearly three-fourths of sales except in the US, where it’s coffee. The coffee business is mainly under its listed subsidiary Tata Coffee Ltd.
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