We plan to shore up investment in new beverages

Written by Lalitha Srinivasan | Updated: Jul 31 2010, 05:33am hrs
Percy Siganporia, MD, Tata Global Beverages is fine tuning the companys pricing and marketing strategies to drive volumes in the second quarter this fiscal. The company plans to launch an aggressive communication package to highlight its commitment to develop global beverages. In an interview with FE's Lalitha Srinivasan, Singanporia talks about the company's strategy for the second quarter this fiscal. Excerpts:

Your comments on performance in the first quarter.

I think its a good performance under a competitive environment. Our groups operating income is up 7 %(underlying increase of 11%) at Rs 1,380 crore. Consolidated net profit is at Rs 46 crore, from a loss of Rs 20 crore. The drivers for the increase in group operating income include, price increases, impact of the Russian acquisition, improved instant coffee operations, despite adverse situations and phasing of promotional sales in key markets.

What is going to be the strategy to drive volumes this quarter

Our focus throughout the year is on investments in new beverages and brand offering. In India, our agenda is to grow Tion (our new launch)s distribution and spread in key markets. For our tea brands, we have built brand equity through the Jaago Re campaign to insulate and to develop the pricing power of our brands to overcome the commodity price serach to an extent that we have delivered not just enhanced margins but also generated funds to invest in new products. We will inrease our distribution network to pump up volumes. We will raise our ad budget this fiscal.

Global tea prices are softening.What's going to be yout pricing strategy

I think you should not look at it as pricing strategy. We are developing a value strategy. If our brands build up their pricing power and get that from consumers then how do we give them the value for the prices

In certain areas, it may translate to a price play. Increasingly we shall move away from that by design. When the markets turns, we are assessing, how we will meet the value challenges.

Whats the update on your joint venture with PesiCo

It is too early to talk about it. After inking the joint venture, we will share more details. You must be aware of PepsiCos top level restructuring recently. It shows we are aggressive about pursuing the proposed venture.

Tell us about your rural initiative and other expansion plans

We will invest in good-for-you beverage executions across different regions of the globe based upon the relevant consumer insights. Our plan is to take the rural packs to diverse target audience.