Tata Global Beverages

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Tata Global Beverages Limited
Type Public
Traded as BSE500800, NSETATAGLOBAL
Industry Non-alcoholic beverages
Founded 1964 (Calcutta)
Founders J. R. D. Tata
Headquarters Kolkata, West Bengal, India
Key people Harish Ramananda Bhat
(CEO & MD)
Products Tea, coffee, dairy products, water, pepper and other plantation crops
Revenue Increase US$ 1.27 billion (2013-14)
Employees 3,166 (2011)
Parent Tata Group
Subsidiaries
Website www.tataglobalbeverages.com

Tata Global Beverages Limited (formerly Tata Tea Limited) is an Indian multinational non-alcoholic beverages company headquartered in Kolkata, West Bengal, India and a subsidiary of the Tata Group. It is the world's second-largest manufacturer and distributor of tea and a major producer of coffee.[1]

Tata Global Beverages markets tea under the major brands Tata Tea, Tetley, Good Earth Teas and JEMČA. Tata Tea is the biggest-selling tea brand in India, Tetley is the biggest-selling tea brand in Canada and the second biggest-selling in the United Kingdom and the United States[2] and JEMČA is the biggest-selling tea brand in the Czech Republic.[3]

Tata Global Beverages ventured into the Indian cafe market with a 50/50 joint venture with Starbucks Coffee Company. The coffee shops branded as "Starbucks Coffee - A Tata Alliance" will source coffee beans from Tata Coffee, a subsidiary company of Tata Global Beverages.[4]

History[edit]

1980 to 1990[edit]

In the early 1980s, the tea industry in India was experiencing rising input and labor costs and dwindling margins as well as high taxes. India was facing competition on the world market not just from China, but also from other countries entering the business.

In 1983, Tata Tea bought the stake belonging to the James Finlay group to form the individual entity Tata Tea. In the same year, the company decided to move from the commodities business to consumer branding. The first brand Tata Tea was introduced. This was followed by other brands like Kannan Devan, Agni, Gemini and Chakra Gold. In spite of being the largest market in the world, the concept of branded tea took time to be accepted.[citation needed]

In 1987, Tata Tea set up a fully owned subsidiary, Tata Tea Inc., in the USA.

1990 to 2000[edit]

In the 1990s, Tata Tea decided to take its brands into the global markets. It formed an export joint venture with Britain's Tetley Tea in 1992. Other new enterprises included a majority interest in Consolidated Coffee Ltd. (Tata Coffee Ltd.) and a joint venture to manage agricultural estates in Sri Lanka. Tata Tea Inc. in the United States processed and marketed instant tea from its facility in Florida, based on sourcing of instant tea products out of Munnar and Kerala. In 1993, they entered into a joint venture with Allied Lyons PLC in the UK to form Estate Tata Tetley.

In the mid-1990s, Tata Tea attempted to buy Tetley and the Lankan JVC acquired 51% shareholding in Watawala Plantations Ltd.

In 1997 the company was embroiled in a major scandal known as the "Tata Tapes controversy" which related to funds the company provided to the outlawed United Liberation Front of Asom (ULFA), an armed-struggle group operating in Assam.

By 1999, Tata Tea’s brands had a combined market share of 25% in India.[citation needed] The company had 74 tea gardens and was producing 62 million kilograms of tea a year, two-thirds of it packaged and branded. Towards the end of the year, the tea business was hit by a drought in much of India. In addition, Russia, once the largest buyer of Indian tea, temporarily withdrew from the market.

2000 to 2010[edit]

Tetley tea canister from Canada

An important step for Tata Tea was the acquisition of the Tetley Group (based in the United Kingdom) in 2000. It was a £271 million ($432 million) leveraged buyout. Tata Tea reportedly outbid the American conglomerate Sara Lee in what was described as the largest takeover of a foreign company by an Indian one to date. At the time, Tetley was the world's second largest tea company after Unilever's Brooke Bond-Lipton and had an annual turnover of £300 million. It was the market leader in Britain and Canada and a popular brand in the United States, Australia and the Middle East.

Established in 1837, Tetley was the first British tea company to introduce the tea bag to the UK in 1953. The tea bag was followed by the first round tea bag in 1989 and the 'no drip, no mess' drawstring bag in 1997. Tetley now contributes for around two thirds of the total turnover of Tata Tea.

From 2005, Tata Tea began a restructuring exercise to divest direct ownership of plantations in India, a process facilitated by subsidised loans from the World Bank's International Finance Corporation.[5]

In 2006, Tata Tea acquired Eight O'Clock Coffee, a U.S. based coffee producer from Gryphon Investors for $220m;[6] before being sold to Gryphon, the Eight O'Clock Coffee brand was originally owned by The Great Atlantic & Pacific Tea Company from its beginnings in 1859 to 2003.

In 2007, Tata Tea launched the campaign Jaago Re! to awaken youth to social issues. The campaign was extended into 2008. In 2009, their campaign revolve around the issue of corruption with a new adline 'Ab Se Khilana Bandh, Pilana Shuru'.

The international trade union IUF criticized the company in 2009 for not allowing statutory maternity leave to pregnant tea pluckers, and for locking out 1,000 workers on the Nowera Nuddy Tea Estate in West Bengal for so long that the local government began distributing food coupons for emergency rations to workers and their families.[7] In May 2010, a crop sprayer died of suspected poisoning on a Tata estate in Assam, leading to protests at which two more workers were shot dead by riot police.[8]

2010 to present[edit]

On 30 January 2012, Tata Global Beverages and Starbucks announced the creation of a 50-50 joint venture called Tata Starbucks Limited, which will own and operate Starbucks outlets branded as Starbucks Coffee "A Tata Alliance" in India. The stores will start beginning to operate in 2012, launching initially in Delhi and Mumbai.[9]

Operations[edit]

Tata's tea plantations in Munnar, India
Packages of Tata Tea in a store shelf.

The company was rechristened as Tata Global Beverages to include the range of health and nutritional beverages it wants to enter into. Via subsidiary companies, Tata Global Beverages manufactures 70 million kilograms of tea in India, controls 54 tea estates, ten tea blending and packaging factories and employs around 59,000 people.[10] The company owns 51 tea estates in India and Sri Lanka, especially in Assam, West Bengal in eastern India and Kerala in the south. The company is the largest manufacturer of Assam tea and Darjeeling tea and the second-largest manufacturer of Ceylon tea.

Set up in 1964 as a joint venture with UK based James Finlay and Company to develop value-added tea, Tata Global Beverages has now product and brand presence in 50 countries. It is one of India's first multinational companies. The operations of Tata Global Beverages and its subsidiaries focus on branded product offerings in tea, but with a significant presence in plantation activity in India and Sri Lanka.

The consolidated worldwide branded tea business of Tata Global Beverages contributes to around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from bulk tea, coffee and investment income. With an area of approx 159 km² under tea cultivation, Tata Global Beverages produces around 30 million kg of black tea annually.[citation needed] Instant tea is used for light density 100% teas, iced tea mixes and in the preparation of ready-to-drink (RTD) beverages.

Tata Global Beverages owns five brands in India: Tata Tea, Tetley, Kanan Devan, Chakra Gold, and Gemini. The company has a 100% export-oriented unit (KOSHER and HACCP certified) manufacturing instant tea in Munnar, Kerala, which is the largest such facility outside the United States. Tata Global Beverages has subsidiaries in Australia, Great Britain, United States, Czech Republic and India.

Marketing strategy[edit]

In spite of a global presence, the brands are distributed differently depending on the location. As Tata tea is far better known in India and a powerful brand there, it is pushed on this market and countries with a large Indian population. Therefore, Tetley is the company's global face and the largest markets focus on the Tetley brand. Where both brands co-exist in one market, Tetley is positioned as the premium brand.

Social initiatives[edit]

Jaago Re![edit]

Tata Global Beverages worked with Janaagraha on a voter registration drive, with the campaign name "Jaago Re!" ("Wake Up!"). Following this, the company moved the campaign on to opposing corruption. The Jaago Re! website encourages discussion on this and other social issues.[11]

Scholarships[edit]

Tata Global Beverages awarded the Tata Global Beverages Re-imagination Scholarships on 17 March 2013 to eight students from the 'Urban Scholars' program at Brunel University in London. The participating students were required to write an essay based on the following topic "A hot cup of tea on a cold morning, sharing a joke over a cup of coffee, a sip of cool water after a long trek. Beverages are part of our everyday life and yet they also sprinkle some magic on it- moments of reflection, sharing, inspiration and laughter...moments which take us away from the ordinary. What do you think makes a magical beverage moment?"[12]

Criticism[edit]

In January 2014, Tata Global Beverages and International Finance Corporation (IFC) which is part of World Bank were criticized for poor working conditions, low wages, and gross human rights violations in a report released by Human Rights Institute at Columbia Law School. The report alleges Amalgamated Plantations Private Limited (APPL) that is partly owned by Tata Tea and IFC is in violation of many of provisions of Indian Plantation Labor Act (PLA) on its tea plantations in Assam and West Bengal. [13][14]

In March 2014 a documentary on The Guardian news web site claims that Tata Global Beverages is underpaying the minimum Indian wage at an Assam tea plantation that Tata co-owns with Tetley and other major tea producers. [4]

See also[edit]

References[edit]

External links[edit]