Tata Global Beverages, Pepsi serve ‘nutrient water’

Prefer water charged with nutrients?

NourishCo, an equal-stake joint venture between Tata Global Beverages (formerly Tata Tea) and the Indian arm of PepsiCo, on Thursday launched Tata Water Plus, India’s first nutrient water.

“There is a growing trend towards health and wellness in the beverages category,” said Ashok Namboodiri, chief of sales and marketing at NourishCo Beverages Ltd. “We believe there is immense potential, which will evolve over a period of time.”

‘Nutrient water’ generally contain externally added vitamins and minerals and also sugar for taste.

Priced at a premium of Rs16 for a 750 ml PET bottle (a litre of normal water costs Rs12-15), Tata Water Plus has been launched in Tamil Nadu with ‘Zinc’ and ‘Chromium’ variants, and will be rolled out across the country over the next few months.

PepsiCo said NourishCo will continue to focus on non-carbonated, ready-to-drink products in the hydration category that will be sold in India and could be taken to other parts of the world.

By 2016, the venture is likely to generate revenues of Rs700 crore, R K Krishna Kumar, vice chairman, Tata Global Beverages, said. “But the company won’t see real impact from the joint venture until 2014,” said Mehul Desai, a Mumbai-based analyst at K R Choksey Shares and Securities.

“Even in the urban markets, health products haven’t penetrated because the knowledge of the product is not there,” he said. “NourishCo would take time to gain penetration.”

India’s soft-drink market is expected to double to 12.9 billion litres in 2015 from 6.2 billion litres in 2010, Euromonitor International predicts.

Meantime, in another development, PepsiCo which had launched a Rs5 glucose-based drink — Gloco+ — under the Leher brand in May last, mainly to cater to the bottom-of-the-pyramid consumers who couldn’t afford some of its higher-priced colas and juices, has been renamed Tata Gluco Plus — though the launch was part of the NourishCo agreement.

The manufacturing and licensing of Himalayan, Tata’s mineral water brand, too, is a part of NourishCo. The venture now has three wellness products in its portfolio that serve the top and bottom ends of the pyramid.

Meanwhile, Krishna Kumar said Tata Global’s sales may grow 7-8% in the year ending March 31, 2012. This compares with a 3.5% increase to Rs5,980 crore a year earlier.