Sushant Dash, regional president-India, TGBL, tells how Tata Global Beverages aims to penetrate the Indian instant coffee market.
Tata Global Beverages (TGBL), the beverage arm of the Tata Group, has announced its foray into the instant coffee market, with a new brand, Tata Coffee Grand. The company aims to replicate the success it achieved in tea business over the last three decades in its new business venture. Sushant Dash, regional president-India, TGBL, tells Mahesh Kulkarni on how it aims to penetrate the Indian instant coffee market. Excerpts:
Tata Coffee has been largely exporting coffee. What made you to enter the instant coffee market?
Coffee penetration is just 21% at all-India level and primarily driven by south India. In rest of the country it is single digit, whereas tea is more than 90% across the country. In terms of total value, coffee market is just R2,500 crore in value, of which instant coffee market is R1,300 crore and growing. We at Tata Coffee have realised that in south India there is a clear shift from filter coffee to instant coffee. Cafe culture is driving the consumption in north, east and west and consumers there now want to have coffee at home. Instant coffee is the easiest way to do that. Besides, the rising income levels have made consumers to afford instant coffee. That is why we believe the category is poised
What do you think are your key strengths in this space?
There are three main things that keep us apart from the competition. In the last 30 years we have been in the tea market since 1985. One of the things we have done well is to get leadership position, in terms of consumer understanding and launching innovative products. I think we can do the same thing in coffee. More importantly, we have managed to create a great distribution network which has been our strength and we will leverage it.
Secondly, Tata brand stands for quality and assurance. Thirdly and most critical is that we have the expertise of Tata Coffee in plantation, knowledge of beans, roasting and product development — a clear differentiator for us in the
What is your strategy for the instant coffee market?
This is our first foray into instant coffee market, which we are doing under the mother brand of Tata Coffee. It is the same as how we created our tea portfolio under Tata Tea as mother brand and several brands coming under it. Here we are leveraging the Tata name.
How are you differentiating yourself in the market?
In three areas we are going to differentiate from the competition like product, packaging and communication. We plan to launch the communication strategy in 15 days. We will roll out a 360 degree multi-channel communication strategy involving digital, television, print and outdoor. It will be disruptive and different.
In terms of product, our beans are primarily sourced from Tata Coffee gardens. It is the first time in India that we have a unique blend of agglomerated, freeze-dried coffee and we are calling it “Dicoction Crystals”. Nobody has given freeze-dried coffee before, except gourmet coffee in miniscule. Nestle has it at very few outlets and imported from their international range. In the regular instant coffee market, very clearly no one has done that. And we are giving the freeze dried coffee at the same price point as any other instant coffee. We have adopted the same differentiated pricing strategy for the south and rest of the country. Our coffee will be priced 7-8% lesser in south India.
In terms of packaging, the coffee market traditionally uses two or three colours — brown or red. We have tried to differentiate by using blue colour packaging, which clearly stands out in the market. Our consumers have loved it. We will start selling in the market in ten days and available across all key outlets in A, B and C class cities and towns.
What difference does it make for the consumer to consume freeze-dried or agglomerated coffee?
The competitors sells agglomerated coffee. It is mainly the technique that is involved in making freeze-dried. The cost of production is much higher in freeze-dried coffee. For consumer, it makes difference in terms of better flavour and better aroma, which is the indication of good coffee. Dicoction crystals will be our USP.
In the domestic market, for the first time, we are launching freeze-dried coffee and that is the difference between us and the competitors.