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Tata announces major reorganisation of its coffee businesses

Tata Consumer Products says the proposed reorganisation of Tata Coffee's retail packaged coffee and coffee plantations interests will result in revenue and operational efficiencies alongside ‘focused business verticals’

Tata Consumer Products will absorb Tata Coffee's retail packaged coffee brands and demerge its coffee plantation business | Photo credit: Tata Consumer Products Limited



Tata Consumer Products Limited (TCPL) has announced a major shake-up of its coffee businesses in India and the UK.
 
The proposals will see Tata Coffee Limited’s coffee plantation business demerged into a new entity, TCPL Beverages & Foods Limited. Meanwhile, the remainder of Tata Coffee’s branded coffee business will be merged with Tata Consumer Products.
 
The move will see Tata Coffee’s Eight O’Clock, Tata Coffee Grand, and Sonnets by Tata Coffee retail packaged coffee brands, join the ranks of Tata Consumer Product’s tea brands, which include Tetley, Tea Pigs, and Tata Tea, and its bottled water, soft beverages and kitchen ingredients ranges.
 
Additionally, TCPL will purchase a minority stake in Tata Consumer Products UK Limited (TCP UK) via a preferential issue of its equity shares. 
 
“These actions further TCPL’s objective of creating a future ready organisation and will act as a stepping-stone for further simplification. These will also result in operational efficiencies, faster decision making and execution, creation of focused business verticals and unlocking of potential synergies,” Tata Consumer Products wrote in a press release.
 
Founded in 1922, Tata Coffee currently operates as a subsidiary of Tata Consumer Products. It is Asia's largest integrated coffee company, and the second largest exporter of instant coffee and a leading producer of specialty coffee in India.
 
The company operates two instant coffee production facilities in India, and a further site in Vietnam. It also operates 19 coffee plantations across 8,000 hectares in India.  
 
Tata Coffee, which also has interests in tea and pepper production, generated $106bn in revenues in 2019-20, according to the company website.
 
In December 2020, Tata Consumer Products divested its MAP out-of-home coffee business in Australia amid sustained trading pressures resulting from the country’s strict Covid-19 lockdown. Shortly after, the company partnered with Lavazza to launch at-home coffee products via its premium Tata CLiQ Luxury e-commerce platform.
 
Aside from its coffee plantation and consumer packaged coffee business, Tata Consumer Products also licences Starbucks stores in India through its Tata Starbucks subsidiary, where is currently operates more than 250 stores.
 
In November 2021, Tata Consumer products Managing Director, Sunil D'Souza indicated that smaller stores would be critical to Starbucks’ growth in India, with the Seattle-based coffee chain opening its first Indian drive-thru location and delivery playing a greater role in its business.

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