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Tata Global looks beyond tea, to launch fruit-based drinks

To raise overall tea consumption, Tata Global has been trying to regularly launch several variants

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Move over tea, Tata Global Beverages, once known as Tata Tea and deriving most of its revenues from branded tea and related consumer products, is set to launch a host of fruit-based drinks like mango and orange, sources said.

The company has been working on several brands like Fruski and Pep before zeroing in on the former.

The Kolkata-based arm of the Tata Group said in a disclosure to the exchanges that the brand Fruski is expected to be launched on May 10, adding that the product will cater to the domestic market only without disclosing the nature of the product.

Trade sources told DNA Money that mango and orange variant of Fruski are ready to get launched.

The fruit juices would be value-added containing extracts of green tea or Amla or other naturally occurring ingredients depending upon the nature of the variant, sources said.

Over the past several months, Tata Global Beverages has been finalising on the brand and product development and has registered the trademark Mango Fruski in January.

The products would also be made available for sale on online commerce platforms like Amazon.in.

Alternative brand names were also thought about including Tata Pep but were subsequently dropped as the name Fruski was found to be more receptive among customers for its apparent association with fruits and freshness, sources said.

After retailing tea for years, what made Tata Global Beverages venture into widely consumed fruit juices?

Country's low per capita consumption of tea and a secular yearly growth of just 3% are some of the reasons that can be attributed to factors affecting the decision.

"Production has largely remained range-bound over the past three years; demand is mostly driven by domestic consumption, although per capita consumption remains low relative to other countries," a bulk tea sector report released by rating agency ICRA said.

To add to the woes of tea producers in India, consumption growth has slowed in recent years due to a difficult operating environment in tea-consuming nations globally, leading to unfavourable impact on global tea prices, the report released last month added.

The scenario is being played out on Tata Global's financials as well.

Despite significant spend on brands, Tata Global Beverages saw a measly 1% during the nine-months period till December over 2015 levels and just 3% during the third quarter.

To raise overall tea consumption, Tata Global has been trying to regularly launch several variants. It recently brought products like Tata Tea Elaichi and Tata Tea Gold Mixture (TTG), specially crafted for the Maharashtra market. It also collaborated with Starbucks to create an innovation especially for the Starbucks Teavana portfolio in India called the India Spice Majesty Blend.

Alongside, it launched Tea Veda range that tries to capture the goodness of Ayurveda in the daily cup of tea.

...& ANALYSIS

  • To raise overall tea consumption, Tata Global has been trying to regularly launch several variants
     
  • It recently brought products like Tata Tea Elaichi and Tata Tea Gold Mixture, specially in Maharashtra
     
  • Apart from India Spice Majesty Blend for Starbucks Teavana portfolio, it launched Tea Veda range that tries to capture the goodness of Ayurveda
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