The R600-crore Tata Coffee plans to diversify its business to save its topline from shocks in the coffee commodity market by strengthening its presence in the instant coffee segment, while also planning to create consumer brands over the next year to expand its retail presence to take on Nestle?s Nescafe and Hindustan Unilever?s Bru.

The coffee plantation market has seen the price of the commodity coming down over the past two years by over 25% over the past 12 months alone, forcing companies to look at ways to protect their topline growth. As part of this, the company is set to inaugurate a refurbished coffee processing plant in Theni district in south Tamil Nadu, which will largely export its produce.

?The knowledge we gained from starting a unit with Starbucks in Kushalnagar (in Kodagu district of Karnataka) helped us build this plant to global standards,? Hameed Huq, the managing director of Tata Coffee said. The company already has one instant coffee plant in Hyderabad.

The plant, bought and renovated with R75-80 crore, will buy the cheapest coffee from anywhere in the world and process it. The share of instant coffee has increased to 55-60% for the company, which it plans to raise to 75% over the next few years, even as the plantation share in business has come down to 19% today.

Tata Coffee, which already has two coffee brands internationally like Eight O?Clock in the US and Grand in Russia, besides having brands domestically like Mr Bean and Tata Coffee, had so far resisted from aggressively building consumer brands.

?Building brands also comes with a cost. So we restricted ourselves to business-to-business consumers, which was giving us strong growth,? Huq said, probably based on the learning from the failure of its aggressive promotion of Mr Bean in a country which was largely consuming tea at home.

But with the consumer now more exposed to coffee with the explosion of cafes, the company is sensing a new opportunity in the segment. ?We are thinking of something with our parent company and we will come up with something,? he said.