High ambition is brewing over at Tata Global Beverages — the former Tata Tea — and if there was any doubt on where it wants to go after being India's biggest maker of the common brew, Chairman Ratan Tata laid it bare on Monday.
Tata Global Beverages (TGB) wants to be in the same league as Anglo-Dutch Unilever or Swiss Nestle and wants to get there with new products and acquisitions. It has an eye on the foods business with a focus on health and nutrition products.
Tata Global Beverages, formerly Tata Tea, is aiming to become a $5 billion (R23,000 crore) company by 2015, growing more than three-fold from the current $1.5 billion. It plans to create new brands and invest heavily on new product development.
Addressing shareholders at the 47th annual general meeting of the company in Kolkata, Ratan Tata — who would have retired by the time the goal he outlined is achieved — said that in the long run, the company was mulling an entry into the foods business.
"Over the next 5 years, we are looking to grow our EBITDA (earnings before interest, taxation, depreciation and amortisation) levels by 15 per cent year-on-year," he said.
Tata Global Beverages CEO Peter Unsworth said all the new product offerings from the group's stable would be in the high-margin areas.
Bullish on the recent acquisition of Grand Tea and Coffee Company in Russia, Tata said the company would now penetrate deeper into the Russian market and introduce all its offerings there. Similarly, it is eyeing the markets of Latin America and an entry there is expected to be through acquisitions.
Terming the deliberate and gradual shift from a tea company to a global beverage major as "significant," Tata said TGB's recent joint venture with PepsiCo augured well and there would be a whole new sector opening up in meeting global market demands in ready-to-drink products and in vitaminised water-based products.
"Going forward and looking in the future we will continue to make investments in our brands and innovation of new products. The intention is to develop this into a beverage company with a wider and innovative sets of products always based on wellness and good health. We will stay away from products that in fact tend to be unhealthy or injurious to people's health," Tata said.
The Tatas also expect to step up control of the company.
Responding to a shareholder's query, whether the Tata Group would increase its holding in Tata Global Beverages beyond the 35.38 per cent it holds now, Tata said the group would eventually do so via creeping acquisition of up to 5 per cent a year.