How Tata Consumer Products Is Tapping Into the Indian Coffee Market

India is witnessing the rise of a coffee culture wherein young urban consumers are showing affinity for specialty, artisanal coffee. Underlining this trend, many coffee chains and packaged artisanal coffee brands are expanding their presence in the Indian market rapidly. According to a report, the India instant coffee market is projected to grow at a compound annual growth rate of 12.86 per cent to attain a market size of $905.168 million in 2027, from $388.219 million in 2020.

Tata Consumer Products (TCP), the consumer products company announced its entry into the Ready to Drink Cold Coffee category with the launch of Tata Coffee Gold- Cold Brew. Speaking at the 60th annual general meeting, the company’s chairman N. Chandrasekaran said that the company is transforming itself into a full-fledged fast moving consumer goods company (FMCG) with a rapid expansion of the food portfolio, backed by research, development and innovation. Branded tea and coffee represent 58 per cent of the revenue while the rest is accumulated by the non-branded and foods business and the company will continue to grow the beverages business alongside foods.

With this particular launch the company aims to tap the rapidly growing demand for the cold coffee market in India, said Raviteja Neralla, Consumer Analyst at GlobalData.

“The rapid growth of India’s ready-to-drink cold coffee market is driven by a rise in the popularity of the drink among young consumers. According to GlobalData’s recent quarterly beverage forecast, the iced/RTD coffee drinks category’s volume witnessed double-digit growth in Q1 2023,” she added.

Tata Consumer Products’ new launch has also kept Indian consumers’ growing health awareness in mind. According to GlobalData’s 2023 Q1 consumer survey, 46 per cent of Indian consumers are health conscious, especially among millennials, this percentage grew to 49 per cent.

Francis Gabriel Godad, Business Development Manager at GlobalData India, adds, “Tata Coffee Gold – Cold Brew targets these young urban consumers who are showing a great affinity towards growing coffee culture, with its gourmet coffee offering. The company claims that these products are brewed using cold water so that they retain their smoothness and that they offer a rich, rounded taste devoid of any bitterness.”

TCPL coffee continued its strong performance with a revenue growth of 31 per cent YoY for the quarter ended 31st March 2023. TCPL’s coffee revenues grew 34 per cent in the 9-month period year-to-date, according to the earnings performance reported by the company for the quarter ended December 2022. TCPL proposed a merger with Tata Coffee Limited (TCL) in March 2022 with the objective of unlocking synergies and creating a simpler organizational structure.

TCPL was formerly known as Tata Tea, the name was changed to Tata Global Beverages in 2010, reflecting the transition from a single category (tea) to multiple beverages. After N Chandrasekaran became the Tata Sons chairman in 2017, the consumer facing businesses under Tata Chemicals were transferred to TGBL which was later renamed as TCPL. The company has a consolidated annual turnover of approximately INR 12,425 crore with operations in India and International markets.