Tata Global Beverages, the owner of Tetley, Eight O Clock and Grand Coffee brands, is investing heavily in re-launching its existing brands through packaging and new flavours.

Managing Director Harish Ramanand Bhat told Business Line that though the company witnessed a sharp decline in its margins in the September quarter, it has undertaken restructuring moves to help improve performance. Edited excerpts:

What are the main highlights of the September quarter?

Brand re-launches and extensive advertising and campaign are the main highlights. We spent in excess of Rs 37 crore in this quarter in most of the markets.

Can you elaborate on the exceptional gains that helped push profit up by 51 per cent? Can we expect the company to get back to the levels of the first quarter performance by the next quarter?

We had initiated some restructuring moves in this quarter (July-September) and also changed the way sales were being carried out in Canada. While a few restructuring moves have resulted in negative figure in P&L (profit and loss), some have helped us gain. However, we can’t give any guidance on the next quarter.

What is the consolidated underlying volume growth in the quarter? Even sales were just marginally up at 4 per cent. Is there a particular reason for this?

As a global company, it is difficult to give the exact number, but it was in the range of 3-5 per cent. For example, in India, growth was slightly lower at 4 per cent, but we were ahead of the packaged tea market, which was flat because of volatility in the commodity market. There are signs of consumers down-trading from packaged tea to loose tea in this quarter.

On sales, our coffee pods business is doing well in the US, but sales come as royalty and, hence, are lower than actual sales that happen in other categories.

Can we expect the packaged tea market to show an improvement in the coming quarters?

Definitely yes, the category is getting more exciting. And as we move into the winter season, we might see improvements.

Which markets and categories performed well for the company?

Most markets, except the recession-hit Europe and the UK, have performed well. Our water business has grown by 60 per cent, but it is still a nascent market. We will see more action in the tea market.

You have entered a joint venture with Tata Realty? What is the purpose of getting into the real estate business?

We have vast land in Bangalore and Tata Realty would be developing the same. We don’t intend to get into real estate. It is too early for us to say whether it will be used for residential or commercial purposes.

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