The Indian conglomerate saw total coffee sales surge 39% in India as it opened a record 25 new Starbucks stores over the quarter
Tata Consumer Products controls major packaged coffee and tea brands, including Eight O'Clock and Tetley, as well as holding the license for Starbucks in India | Photo credit: Tata Consumer Products Limited
Retailed packaged coffee and licensed branches of Starbucks continue to deliver strong results for Tata Consumer Products Limited (TCPL) as packaged tea sales in India remain “tepid”, according to the conglomerate’s Managing Director Sunil D’Souza.
Reporting its results for the quarter ended 30 September 2022, TCPL said total revenues across its tea, coffee and foodservice businesses rose 11% to reach Rs 3,363 Crores ($406.3m).
While coffee revenues grew 39% in the Indian market, packaged tea sales declined 7% due to ‘pricing corrections’ and ‘overall softness in the category’.
Net profit for the period grew 37% to reach Rs 666 Crores ($80.5m), with ecommerce sales growing 40% to account for 9.2% of all its sales in India.
Tata Starbucks, which holds the license for the Seattle-based coffee chain in India, recorded 57% revenue growth compared to the previous quarter, driven by ‘normalised store operations’ following the pandemic and a ‘revival in out of home consumption.’
Tata Starbucks also opened 25 new stores over the period, including its first ever premium Reserve format store in Mumbai
, marking the highest number of quarterly openings in the business’ ten-year history.
Starbucks now has 300 stores across 36 cities in India.
TCPL’s international beverages business also recorded strong 7% revenue growth for the period.
In the US, TCP said its Eight O’ Clock packaged coffee brand had gained market share following the launch of its branded K Cup coffee pod range.
TCP’s packaged tea business also gained ground in the UK, where TCPL overtook Twinnings as to become the third largest branded tea company by market share.
“We delivered another quarter of double-digit revenue growth while balancing margins despite inflationary pressures, weakness of currency and some lag in pricing in international markets,” said TCP Managing Director, Sunil D’Souza.
“Our out of home businesses - NourishCo and Tata Starbucks have recorded strong growth during the quarter. While unprecedented inflation & adverse currency movements in our International business have weighed on our margin this quarter, we will be driving structural cost saving initiatives to improve the trajectory going forward,” D’Souza added.
TCPL’s strong performance follows a major reorganisation
of the company announced in March 2022. 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 announced it would purchase a minority stake in Tata Consumer Products UK Limited (TCP UK).
In September 2022, TCPL appointed David Atkinson
as Senior Vice President and Head, UK & Ireland to strengthen its key tea brands, Tetley, Good Earth and teapigs alongside its ready-to-drink product range in key international markets.