Tata Global Beverage, the maker of Tata Tea and Tetley, has reported a decline in its fourth quarter consolidated net profit at Rs 69 crore, down 28 per cent than Rs 95 crore in the year ago period. The fall in margins was attributed to sharp rise in advertising and marketing budgets along with some new initiatives.
The company’s consolidated income for the quarter ending March 31, 2014 was up marginally by 3 per cent to Rs 1,910 crore from Rs 1,865 crore in the same period last fiscal.
Ajoy Misra, Managing Director and CEO of Tata Global Beverages, said “In a challenging market environment, we continue to invest strongly behind our brands. We have made good progress on category expansion into coffee and the single serve business in Australia with the acquisition of the MAP brand.”
The company’s strategic alliances with PepsiCo and Starbucks are making good progress and seeing steady growth, he added. Tata Starbucks – a joint venture between Tata Global Beverages and Starbucks- now has 46 Starbucks stores across the cities of Mumbai, Delhi, Bangalore and Pune. The stores continue to see excellent consumer response.
The company has launched new flavours within its Tetley brand in the UK. With these launches, Tetley in UK is establishing a presence in the fast growing flavoured green tea segment, Misra said. The Tetley Infusions range, which was recently launched in pyramid tea bag format in Australia has done very well during the last quarter.
In India, the recent marketing campaign for the green tea range, focused on cleansing from within, has seen good market response.
The ‘Power of 49’ campaign for Tata Tea Gold in India, which encouraged women to exercise the power of their franchise, saw strong momentum and consumer participation last quarter with a mix of elements spanning advertising, on ground activation and digital marketing. The campaign touched over 100 million women across India and sparked over 5 million interactions through its communication channels.
The company has also announced that it has acquired ‘MAP’ brand in Australia this month, though moderate in size, the brand is significant for the Australian market and will help Tata Global Beverages further expand its offering in Australia to include coffee. MAP is present in roast & ground coffee, single serve coffee pods and machines and in the food service industry.
This acquisition will help strengthen the Company’s portfolio in the high growth contemporary ‘single serve’ business.