Tata Consumer Products

Tata Consumer Products Limited, formerly Tata Global Beverages 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.[6]

Tata Consumer Products
Public
Traded asBSE: 500800, NSE: TATACONSUM
IndustryFood processing
Headquarters1, Bishop Lefroy Road, Kolkata, West Bengal, India[1]
Area served
Worldwide
Key people
Sunil D’Souza
(CEO & MD) [2]
Natarajan Chandrasekaran (Chairman)[3]
ProductsTea, coffee, water, salt, lentils, spices, ready-to-eat, sweetener etc
Revenue₹58,079,900,000 (US$810 million) [4] (2020)
₹5,753,500,000 (US$81 million) [5] (2020)
ParentTata Group
Subsidiaries
Websitewww.tataconsumer.com

Tata Consumer Products Limited markets tea under the major brands Tata Tea, Tetley and Good Earth Teas. 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 United Kingdom and United States.[7]

In 2012, Tata Consumer Products Limited ventured into the Indian cafe market in a 50:50 joint venture with Starbucks Coffee Company. The coffee shops branded as "Starbucks Coffee—A Tata Alliance" source coffee beans from Tata Coffee, a subsidiary company of Tata Consumer Products Limited.[8] As of 2020, the company's revenue stood at ₹5807.99 crore (US$810 million) while its net income stood at ₹575.35 crore (US$81 million). [9]

History

1980 to 1990

In the early 1980s, the tea industry in India was experiencing rising input and labour 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.

In 1987, Tata Tea set up a fully owned subsidiary, Tata Tea Inc., in United States.[10]

1990 to 2000

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 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 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 Assam (ULFA), an armed-struggle group operating in Assam.

By 1999, Tata Tea's brands had a combined market share of 25% in India. The company had 74 tea gardens and was producing 6.2 crore 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
Tetley tea canister from Canada

An important step for Tata Tea was the acquisition of the Tetley Group (based in 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 United States, Australia and the Middle East.

Established in 1837, Tetley was the first British tea company to introduce the tea bag to 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.[11]

In 2006, Tata Tea acquired Eight O'Clock Coffee, a U.S.-based coffee producer from Gryphon Investors for $220m;[12] 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.[13] 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.[14]

2010 to 2019

On 30 January 2012, Tata Consumer Products Limited 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 started operating in 2012, launching initially in Delhi and Mumbai.[15]

On May 15, 2019, Tata Chemicals Limited (TCL) announced the de-merger of the Consumer Products Business of TCL and into TGBL through a National Company Law Tribunal (“NCLT”) approved scheme of arrangement (“Scheme”) to become Tata Consumer.[16][17] In the beverages business, Tata Consumer brands include Tata Tea, Tetley,[18] Vitax, Eight O’Clock Coffee, Himalayan Natural Mineral Water, Grand Coffee and Joekels.[19] In the food segment, the brands include Tata Salt and Tata Sampann.[20]

2020 to present

Tata Global Beverages Limited (TGBL) and Tata Chemicals Limited (TCL) announced that the Scheme of Arrangement between TGBL and TCL regarding the Consumer Products Business of TCL is now operational, effective from 7 February 2020. Following this, TGBL has been renamed Tata Consumer Products Limited.[21][22] Tata Consumer combines food and beverages brands such as Tata Salt, Tata Tea, Tata Sampann and Tetley under a single umbrella.[23]

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

The company was renamed as Tata Global Beverages (now Tata Consumer Products Limited) to include the range of health and nutritional beverages it wants to enter into. Via subsidiary companies, Tata Consumer Products Limited manufactures 7 crore kilograms of tea in India, controls 54 tea estates, ten tea blending and packaging factories and employs around 59,000 people.[24] 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 Consumer Products Limited has now product and brand presence in 50 countries. It is one of India's first multinational companies. The operations of Tata Consumer Products Limited 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 Consumer Products Limited 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 approximately 159 square kilometres (61 sq mi) under tea cultivation, Tata Consumer Products Limited produces around 30 million kg of black tea annually. Instant tea is used for light density 100% teas, iced tea mixes and in the preparation of ready-to-drink (RTD) beverages.

Tata Consumer Products Limited owns five brands in India: Tata Tea, Tetley, Kannan 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 United States. Tata Consumer Products Limited has subsidiaries in Australia, Great Britain, The United States of America, Czechia and India.

Marketing strategy

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

Jaago Re!

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.[25]

Scholarships

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?"[26]

Criticism

In January 2014, Tata Consumer Products Limited 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.[27][28]

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.[29]

In October 2015, a movement of 6,000 female labourers calling themselves "Pempilai Orumai", or women's unity laid siege to the Munnar tea estates, one of Kerala's most popular tourist destinations and owned subsidiary of Tata Tea's plantation in Kerala. Trade and tourism were brought to a near standstill but, after nine days of protest and marathon negotiations overseen by the chief minister of the state, it gave in.

The spark that ignited the protest was a decision to cut the 20% bonus paid to tea pickers, but its roots go much deeper than that. "Part of the women's complaint is that they live in one-bed huts without toilets and other basic amenities and, while they earn significantly more than the tea workers in Assam, they say the ₹230 (US$3.20) (£2.30) they are paid for a day's work is half what a daily wage laborer in Kerala would get."[30]

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See also

References
  1. "Contact information". www.tataconsumer.com. Retrieved 11 April 2020.
  2. "Tata Consumer Products appoints Sunil D'Souza as MD & CEO". Times of India. 4 April 2020.
  3. "Tata Global Beverages appoints N Chandrasekaran as Chairman". The Economic Times. 3 July 2017.
  4. "Tata Consumer Products Yearly Results, Financial summary, Tata Consumer Products Yearly Earnings - The Economic Times". economictimes.indiatimes.com. Retrieved 8 June 2020.
  5. "Tata Consumer Products Yearly Results, Financial summary, Tata Consumer Products Yearly Earnings - The Economic Times". economictimes.indiatimes.com. Retrieved 8 June 2020.
  6. "Archived copy". Archived from the original on 11 November 2006. Retrieved 30 August 2006.CS1 maint: archived copy as title (link)
  7. "Archived copy". Archived from the original on 31 December 2013. Retrieved 13 January 2014.CS1 maint: archived copy as title (link)
  8. "Archived copy". Archived from the original on 5 April 2013. Retrieved 27 March 2013.CS1 maint: archived copy as title (link)
  9. "Tata Consumer Products Yearly Results, Financial summary, Tata Consumer Products Yearly Earnings - The Economic Times". economictimes.indiatimes.com. Retrieved 8 June 2020.
  10. "Tata Global Beverages Ltd". Business Standard India. Retrieved 18 July 2019.
  11. "UPDATE 1-Tata Tea sells stake in new plantation firm to IFC". Reuters. 19 February 2007. Retrieved 1 April 2016.
  12. "Tatas buy Eight O'Clock Coffee". The Economic Times. 26 June 2006.
  13. "IUF". IUF. 23 November 2009. Retrieved 1 April 2016.
  14. Press Trust Of India, Tetley accused of rights violation Archived 15 October 2010 at the Wayback Machine, Hindustan Times, 30 September 2010. Retrieved 7 October 2010.
  15. "Archived copy". Archived from the original on 2 February 2012. Retrieved 31 January 2012.CS1 maint: archived copy as title (link)
  16. "Tata Chemicals & Tata Global Beverages to merge consumer businesses". The Economic Times. 15 May 2019. Retrieved 13 February 2020.
  17. "Tata Group to consolidate FMCG Business; announces Tata Chemicals transfer to Tata Global Beverages". www.businesstoday.in. Retrieved 13 February 2020.
  18. Pani, Priyanka. "Tetley enters into pact with TASSIMO". @businessline. Retrieved 13 February 2020.
  19. "Tata Global Beverages And Tata Chemicals Announce Transaction To Combine Consumer Businesses". www.tata.com. Retrieved 13 February 2020.
  20. www.ETBrandEquity.com. "Tata Group's consumer products business to be brought under one roof - ET BrandEquity". ETBrandEquity.com. Retrieved 13 February 2020.
  21. "TGBL renamed as Tata Consumer Products Ltd, to spearhead FMCG ambitions". The Economic Times. 11 February 2020. Retrieved 11 February 2020.
  22. PTI. "Tata Global Beverages renamed as Tata Consumer Products to spearhead FMCG ambitions". @businessline. Retrieved 11 February 2020.
  23. "Tata Global Beverages and Tata Chemicals announce transaction to combine Consumer Businesses to create a focused Consumer Products Company". www.tatachemicals.com. Retrieved 13 February 2020.
  24. "Archived copy" (PDF). Archived from the original (PDF) on 9 September 2006. Retrieved 30 August 2006.CS1 maint: archived copy as title (link)
  25. "Archived copy". Archived from the original on 26 January 2010. Retrieved 7 January 2010.CS1 maint: archived copy as title (link)
  26. "Archived copy". Archived from the original on 23 April 2013. Retrieved 27 March 2013.CS1 maint: archived copy as title (link)
  27. ""The More Things Change ..." : The World Bank, Tata and Enduring Abuses on India's Tea Plantations" (PDF). Web.law.columbia.edu. January 2014. Retrieved 1 April 2016.
  28. "Hopes, and Homes, Crumbling on Indian Tea Plantations". The New York Times. Retrieved 1 April 2016.
  29. "Assam's modern slaves: the real price of a cup of Tetley tea - video | Global development". The Guardian. Retrieved 1 April 2016.
  30. "The Indian women who took on a multinational and won". BBC News. 19 October 2015. Retrieved 1 April 2016.
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