Tata Consumer Products Ltd

Last modified by Asif Farooqui on 2021/04/06 16:36

Company Overview

Tata Consumer Products (NSE:TATACONSUM) formerly Tata Global Beverages Limited is a focused consumer products company uniting the food and beverage interests of the Tata Group under one umbrella. It is home to key brands such as Tata Tea, Tetley, Tata Salt and Tata Sampann. With a combined reach of over 200 million households in India, it has an unparalleled ability to leverage the Tata brand in consumer products.¹

In May 2019, the company announced the scheme of arrangement, according to which the Consumer Products Business of Tata Chemicals would be merged with Tata Global Beverages Limited, and the new combined entity would be renamed as Tata Consumer Products Limited (Tata Consumer) to reflect the larger portfolio of the Company and its vision to expand into multiple categories beyond just Food & Beverage (F&B). Post the transaction, Tata Consumer is among the Top 5 listed FMCG players basis revenues in F&B and among the Top 10 basis F&B revenues in India.

The company is on a mission to create a premier diversified consumer products company. The company's strengths lie in its deep understanding of its consumers in India and in international markets, iconic market leading brands and wide consumer reach. Tata Consumer Products is committed to delivering high-quality, innovative, tasty and convenient products with goodness at its core. The company's portfolio of products ranges from tea, coffee, water and ready-to-drink to salt, pulses, spices, ready-to-eat and more.

In the Beverages business, Tata Consumer Products is the 2nd largest player in branded tea in the world with over 330 million servings everyday across the world. The company's brands include Tata Tea, Tetley, Vitax, Eight O’Clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand and Joekels.

Beginning with the iconic Tata Salt that pioneered the crusade for iodisation in India, its Foods business is one of the most trusted food brands in India and Tata Consumer Products has extended its portfolio to include salt variants and nourishing food items. With Tata Sampann the company bring the traditional wisdom of Indian food in a contemporary package to deliver the best of taste, nutrition and convenience.

Tata Consumer Products has grown through innovation, strategic alliances and acquisitions, and organic growth. The Company has a joint venture with Starbucks called Tata Starbucks Limited, to own and operate Starbucks cafés in India. Since the inauguration of the flagship store in Mumbai in October 2012, this 50:50 JV has expanded to 10 cities, with many more Starbucks stores planned across the country.

The Company also has a JV with PepsiCo in India, called NourishCo, which produces non-carbonated ready-to-drink beverages that focus on health and enhanced wellness. NourishCo produces and markets Tata Water Plus — India’s first nutrient water, and Tata Gluco Plus — an energizing, glucose-based flavoured drink. Himalayan water is also marketed and distributed through NourishCo.

The high-growth contemporary 'single-serve' business is also an important play for Tata Consumer Products. In the USA Tata Consumer Products has an agreement with Green Mountain Coffee Roasters’ Keurig single-serve machines for Eight O'Clock Coffee, with K-Fee for MAP Coffee in Australia, and with Tassimo in Canada for Tetley tea.

Global Alliances

At Tata Consumer Products, its ambition is to expand its global footprint by entering new markets and new channels with foods and beverages that make its consumers’ day better. With brand presence in over 40 countries, Tata Consumer Products is on a journey to becoming a global leader in branded foods and beverages through organic growth, innovation and strategic alliances. Tata Consumer Products has partnered with some of the biggest players in the beverages category to deliver products and innovations that delight its consumers. Some of its significant alliances are mentioned below:²

Joint ventures

Tata Starbucks Pvt. Ltd.

Tata Starbucks Pvt. Ltd leverages the combined strengths of two leading beverage companies, Starbucks Coffee Company and Tata Consumer Products, to improve the quality and profile of Indian coffee. The unique Starbucks Experience is brought to Indian consumers along with the trust and reliability of the Tata name. The stores, branded as Starbucks Coffee ‘A Tata Alliance’, are present in Mumbai, Delhi NCR, Pune, Bengaluru, Chennai and Hyderabad with many more Starbucks stores planned throughout the country. In a separate sourcing and roasting agreement, Tata Coffee sources and roasts coffee to supply to Tata Starbucks Pvt. Ltd and to export to Starbucks Coffee Company.

Subsidiaries

NourishCo Beverages Ltd.

NourishCo Beverages is a 100% subsidiary of Tata Consumer Products Limited. Tata Consumer Products Limited after it acquired the 50% stake from PepsiCo. This move is consistent with Tata Consumer’s focus on widening its portfolio in the Food and Beverages space in India. NourishCo focusses on healthy, ready-to-drink beverages. Himalayan Water – the #1 Natural Mineral Water brand in India, Tata Water Plus - India’s first nutrient water and Tata Gluco Plus - glucose based drink in a cup, are under this business.

Tata Coffee Ltd.

Tata Coffee is a subsidiary of Tata Consumer Products and part of the Tata Group. It is one of the largest integrated plantation companies in the world and one of India’s largest exporters of instant coffee. The Company produces more than 10,000 MT of shade grown Arabica and Robusta coffees in its 19 estates in South India and its two Instant Coffee manufacturing facilities have a combined installed capacity of 8400 metric tonnes. It exports green coffee to countries in Europe, Asia, Middle East and North America. Tata Coffee’s farms are triple certified: UTZ, Rainforest Alliance and SA 8000 reinforcing its commitment to the people and the environment.

Tata Tea Extractions Inc.

Tata Tea Extractions, Inc. (TTEI), in the US is a wholly owned subsidiary supplying cold water soluble Instant Tea powders and Instant Green Tea. TTEI facility also enables the producing of value added products as per specific customer needs for the Iced Tea Beverage Industry in North America. The unit is certified under GFSI global food safety standards and all its products are Kosher and Halal Certified.

Associate companies

Amalgamated Plantations Pvt. Ltd.

Amalgamated Plantations Company Private Limited (APPL) is a tea plantation company located in Assam, India, in which Tata Consumer Products Limited ( Formerly known as Tata Global Beverages Limited) has a stake. It is also India’s second largest tea producer with operations spread across 24 tea estates in Assam and North Bengal, employing approximately 30,000 people. The company currently has one fully organic garden — the Hathikuli tea estate located within the Kaziranga National Park in Assam. This garden is now the largest Certified Organic integrated Farm in Asia manufacturing three varieties of tea and black pepper and was honoured with the ‘Wind under the Wings’ award by Sanctuary Asia Magazine in 2012.

Kanan Devan Hills Plantations Co. Pvt. Ltd.

The Kanan Devan Hills Plantations Company (KDHP) is the largest tea plantation company in South India. This Munnar-based plantation has achieved Rainforest Alliance Certification for all of its 7 estates and 16 factories, making it one of the largest tea plantation companies in the world to receive the prized recognition in a single shot. The company was also ranked No 1 in the category for Best Company for employee involvement and participation in 2015. KDHP is the first ever employee owned plantation company in India and nearly all its employees are shareholders.

Brands

Tea

No. 2 branded tea company in the world, with a portfolio of global leading brands and trusted regional ‘hero’ brands³

Offering

Black tea
Specialty tea
Cold infusions
Iced tea
Ready-to-drink tea

Tea brands

Tata Tea

Tata Tea is India’s largest packaged tea brand. Today, 1 in every 3 Indian households consumes tea from the brand’s extensive range of variants. With 4 national and 3 regional brands, Tata Tea keeps the diverse preferences of its consumers in mind, offering a varied range of flavours and tastes in its portfolio of tea products.⁴

Vitax

Vitax is one of the most well-established and well-recognized fruit and herbal tea brands in Poland. Vitax began its journey over 30 years ago with fruit infusions and has, over the years, developed a variety of teas in the fruit, herbal, functional, green and red teas’ categories. Polish consumers consider Vitax as one of the best fruit tea brand in the market, in terms of intensity, fragrance, colour and aroma. With a wide range of products it’s became indispensable companion on consumers’ everyday life. The brand joined the Tata Consumer Products family in 2007. It is currently building a market share in the functional tea segment and strengthening its position in the fruit and herbal tea categories.⁵

Tetley

Tetley, the 2nd largest tea brand globally, with a heritage of more than 180 years, joined the Tata Consumer Products family in 2000. Since then, the brand has gone from strength to strength, with a brand presence in over 40 countries, with millions of cups of tea enjoyed every day.⁶

Joekels

stablished in 1994 by Joe Swart and Jonathan Kelsey, Joekels Tea Packers (Pty) Ltd are blenders and packers of some of South Africa's favourite household brands of quality tea. Joekels is the 3rd largest tea business in South Africa, and its flagship Laager Rooibos brand is one of the country's top-selling Rooibos brands. Over the years, Joekels has built a portfolio of high quality and value-for-money brands.⁷

Good Earth

Good Earth is one of the first herbal tea companies in the USA. In the late 1970s, it began developing trademark teas, especially its signature Original Sweet and Spicy Tea, for Good Earth restaurants. Thanks to the overwhelming popularity of Good Earth teas, in 1988, the brand began selling Good Earth tea in a bag format in California. Good Earth joined the Tata Consumer Products family in 2005.⁸

Teapigs

With funding by Tata Consumer Products, teapigs was launched in 2006 by self-confessed tea enthusiasts, Louise Cheadle and Nick Kilby. Their aim was to get the UK drinking better quality tea and introduce a brand that was more relevant to 21st century tea drinkers. The duo successfully launched their tea temples, essentially a roomy, biodegradable pyramid mesh bag containing high quality, whole leaf tea into the UK market.⁹

Coffee

Category-defining brands that are consistently ranked ahead on quality¹⁰

Offerings

Whole bean
Ground
Gourmet coffee
K-Cup brews
Instant coffee
Coffee capsules

Coffee brands

Eight O’Clock

Eight O’Clock, America’s Original Gourmet Coffee, with a legacy of 160 years, brings to consumers high quality 100% Arabica coffee at great value. It is the 5th largest coffee brand in the USA, in terms of volume, and has the highest loyalty and repeat rates among bagged coffee competitors. Eight O’Clock Coffee joined the Tata Consumer Products family in 2006, and since then has enjoyed significant brand revival. Eight O’Clock Coffee is headquartered in Montvale, New Jersey, and roasted and packaged in Landover, Maryland.¹¹

Grand

Grand is the well-known Russian coffee brand with a unique masculine and charismatic image which gives coffee lovers a premium range of instant coffee. Grand was first launched in Russia — a billion-dollar market with huge potential — in 1995, and became a part of the Tata Consumer Products family in 2009.¹²

Map Coffee

Map Coffee joined the Tata Consumer Products family in 2014. Map Coffee was established back in 2002 and supplied Australian cafés, restaurants and bars with a range of Italian and locally roasted coffee. It then expanded into servicing the coffee needs of business offices across Australia, and, in 2009, moved into capsule machines and capsules outside the Grocery channel, followed by entry into the Grocery channel in 2014. Map Coffee aims to provide people great coffee no matter where they need it, and encourages everyone to “discover new grounds” whenever they can.¹³

Tata Coffee Grand

In November 2015, Tata Consumer Products announced its entry into the branded instant coffee business in India under the brand name Tata Coffee Grand. After leading the Indian tea market under its iconic Tata Tea brand, the company took the strategic step to leverage its product, marketing and retail expertise to enter the branded coffee space in India.¹⁴

Water

Water, instant energy and RTD wellness brands¹⁵

Offering

Natural mineral water
Nutrient water

Water brands

Himalayan

Himalayan is marketed by NourishCo, a joint venture between Tata Consumer Products and PepsiCo India. The water is bottled at source from a pure and pristine underground moving stream aquifer, which is about 400 feet below the surface, located at the foothills of the Shivalik range in the Himalayas. This aquifer is one of the largest and purest sources in the world, providing a perennial source of natural mineral water. The catchment area has no human activity and is pollution-free. Every drop travels through layers of rock, sand and silt for over 20 years. These layers act as natural filters and keep the water naturally pure and bacteria-free. During this journey, the pure water picks up essential minerals and acquires its fine, unique taste before reaching an underground reservoir. The aquifer is naturally protected from pollutants by a thick impervious layer of clay that acts as a barrier and prevents any contaminants from passing through it.¹⁶

Tata Water Plus

Tata Water Plus is India’s first nutrient water.

Developed in collaboration with international scientists and Indian nutrition experts, Tata Water Plus represents the larger mission of NourishCo Beverages — to mitigate nutritional gaps in the average Indian consumer. NourishCo, its joint venture with PepsiCo India, seeks to deliver ‘Healthy Beverages for a Healthier India’ and intends to enhance the hydration category in the country.¹⁷

Tata Gluco Plus

An affordable on-the-go re-hydration solution, Tata Gluco Plus comes packed with great taste and instant energy. Tata Gluco Plus has been brought to the Indian market through NourishCo Beverages, its joint venture with PepsiCo India. NourishCo focusses on delivering ‘Healthy Beverages for a Healthier India’ and intends to enhance the hydration category in the country.¹⁸

Foods

Household in-the-kitchen brands enjoyed all over India ¹⁹

Offerings

Salt
Dals and pulses
Besan
Ready-to-cook mix
Spices
Poha
Nutritional solutions

Foods brands

Tata Sampann

The name ‘Sampann’ has many meanings - wholesome, prosperous, accomplished, ‘full of.’ It is also a name that directly inspires its product philosophy. With every Tata Sampann product, you get nutritional ‘more-ness.’ The company's products may look just the same as the next product. In some cases, they might even look duller or rougher because the company like to leave them as natural as possible to give you the most nutrition. But make no mistake. Every Tata Sampann product carries a strong core of nutritional superiority. The company's differentiation starts with its products.²⁰

Tata Salt

From being India's first national iodized salt brand in 1983 to continuing to be a market leader in the salt category today, the journey of Tata Salt is a testament to the consumer’s enduring trust in the brand. The tagline of Tata Salt - ‘Desh Ki Sehat, Desh Ka Namak,’ aptly sums up the brand’s aim of improving the health of the nation, supported by the various social initiatives that have have been introduced.²¹

Tata Salt remains steadfast in its mission to deliver healthy, superior quality products to the masses. Every month, 161 million households across India buy pure iodized Tata Salt through 19 lakh+ retail outlets.

Tata Nx

Tata Nx is Tata’s foray into Indian Nutraceuticals with a focus on BIO-EASY nutritionals. This new-age range of nutritional solution specially crafted for today’s health-conscious generation promises to deliver the best nutrition backed by science. Tata Nx is the result of applying innovative food science, combined with its traditional strengths in consumer products. The brand’s ideology is centred on discovering better insights about the human body and developing products using cutting-edge science and technology.²²

Tata Nx Zero Sugar is made from 100% natural ingredients like stevia herb extract, lactose as a bulking agent and thaumatin which is a fruit extract. It has a low Glycaemic Index compared to regular sugar and it is suitable for those who have been advised to reduce their sugar intake. It blends easily in hot and cold beverages so you can enjoy the goodness of natural sweetener with TATA Nx Zero Sugar

Industry Overview

The total organised Indian F&B industry is expected to be ~Rs. 4,00,000 Crores market as on 2019 and projected to grow by 2.5x to ~Rs. 10,00,000 Crores by 2025 (CAGR of 16%) – leveraging India’s favourable demographic (1.4 Billion strong population, rising income levels and higher urbanisation). The F&B segment constitutes ~30% of household spending and is expected to sustain the wallet share, going forward.²³

Beverages

Tea

As per Euromonitor estimates, global hot tea category is a ~USD 45 Billion industry. Black/Everyday black tea forms the largest category sub-segment globally – but is declining across different international markets. Non-black tea (Green, Fruit & Herbal, Decaf, Specialty, Cold Infusions etc.) is growing and in some markets like Canada, has become larger than black tea. However, a similar growth profile may not be seen across the different non-black segments. For instance, green tea has started witnessing softening of growth/decline in some markets

Health & wellness is one of the key focus areas of the industry. There is an increasing number of new launches with active health claims, such as Gut Health and Sports & Recovery (Tetley Super Teas also leverage on this trend). Consumer perception with respect to macronutrients in relation to health are evolving as media/science dictates what is good for body like no sugar, good carbs, low sodium (Tetley Cold Infusions was launched with an alternative offer of low sugar hydration).

Indian tea market is estimated to be ~Rs. 26,000 Crores, with unbranded being 30-35% of the overall market (by value). Tea is the favourite Indian beverage and the company continue to see growth across all tiers through upgradation from loose to economy branded tea and movement up the chain to premium and super premium teas. Black tea is the predominant sub-category, with high customer preference for the taste of boiled milk tea. Green tea is estimated to be ~3% of the branded category and is growing at 12.5%. Health & wellness continues to be a strong trend and consumers are also looking at functional benefits from their cup of chai (such as Ayurveda Tea and Tulsi Tea).

There is a re-emergence of tea cafés in urban centres in the last few years, which is helping reinvent the tea culture, provide a comfortable venue compared to tea stalls and serve as an alternative to coffee chains. Tea cafés like Chaayos, Chaipoint and its own Tata Cha are becoming prominent. There is an increasing potential base of consumers, who see tea as fashionable and are getting familiar with different varieties of tea.

Coffee

Retail hot coffee is ~2x the size of Tea at USD 88 Billion. USA is the largest coffee market – estimated at ~USD 12 Billion – and has also been leading growth in the category.

Coffee has four sub-segments: Roast & Ground, Beans, Pods and Instant Coffee. Affordable ground and instant formats are more prevalent in early stage markets like Asia, Africa and the Middle East (where Tea is the primary beverage of choice) while Roast & Ground and Pods are more prevalent in countries with an evolved café culture. The company's largest play in coffee is in USA with the Eight O’ Clock coffee brand.

The USA market has been witnessing a slowdown of growth and an increase in competitive intensity. The growth is either being driven by: (1) premium/food service brands (such as Starbucks and Dunkin Donut) that are over-investing in promotions/discounts; (2) small niche brands that are capitalising on trend of artisanal, single-origin coffees; and (3) private label (retailers look at SKU rationalisation and restrict shelf choice to a few select brands).

Consumers are looking at authentic and premium choices in coffee, and there have been several new launches targeting the trend (like the company launched Barista Blend and Flavors of America). Consumers are also more conscious about their choices and want to select healthier options.

The branded retail coffee market in India is estimated at ~Rs. 2,750 Crores in 2019. Instant coffee is the largest sub segment and is ~80-85% of the category and growing as consumers look at convenience. Tata Consumer Products is also witnessing the emergence of artisanal and gourmet premium coffees – estimated to be ~5% of the organised market. In terms of at-home consumption, the company see different consumer behaviours in the South and Rest of India segments. In the Rest of India, coffee is an aspirational product and there is preference for instant coffee, especially during winters. On the other hand, in the South, the company see regular consumption of both instant and Roasted & Ground (filter coffee).

Water

Water is the second largest beverage sub-category after Tea in India (globally it is the largest sub-category in the Beverages market). The current size of the packaged water market in India is ~Rs. 17,000 Crores, growing at a CAGR of 12%. Fruit-based beverages is a ~Rs. 8,250 Crores category, growing at a CAGR of 10%.

Within the packaged drinking water category, the company were one of the first players to launch naturally sourced mineral water in India through its brand Himalayan, and continue to enjoy a leadership position. The company also entered the functional and fortified water space with Tata Gluco Plus and Tata Water Plus.

Outlook

The COVID-19 pandemic has resulted in short-term disruptions in the industry, especially for out-of-home consumption. Even for essential products like Tea and Coffee, there will be supply challenges before things get normalised. In the short term, the company will also see consumers getting more value conscious and hence, the growth dynamics will change across the different tiers (economy/premium).

However, long-term drivers remain robust and expect continued expansion of the categories. There is an opportunity to grow, driven primarily by distribution expansion (including into white space geographies like Rajasthan, with the acquisition of Lal Ghoda and Kala Ghoda) as well as through new product innovation.

Foods

The organised Indian Staples industry is ~Rs. 88,000 Crores in 2019. It is largely unorganised, with the share of branded players at less than 10%.

Salt

Within the Staples category, the Indian Salt market is estimated to be ~Rs. 7,000 Crores with unorganised players forming ~12% of the category by volume (a stark difference to the rest of the category). The growth drivers for branded play remains the increasing awareness of better product quality, visible purity and iodine content. The company compete in the category with Tata Salt (vacuum evaporated salt sold nationally) and I-Shakti salt (lower priced solar evaporated salt normally sold in South). The company's supply partners, Tata Chemicals have the largest manufacturing facility for producing vacuum evaporated salt in India. Tata Consumer Products is seeing a growing trend of health & wellness with consumers making conscious choices by selecting better-for-you options (such as lower sodium content in Tata Salt Lite, Iron and iodine fortification in Tata Salt Plus). Specialty salts like rock salt and black salt have increased presence in modern format stores.

Pulses

India is the largest producer, consumer and importer of pulses. The total Pulses and Derivatives industry is estimated to be ~Rs. 1,50,000 Crores in FY 2018-19 with only 1% of the segment being branded. The low penetration is primarily led by a host of factors including low perceived value addition by packaged players (leading to consumers unwilling to pay price premium) and low consumer concern regarding adulteration in unbranded. However, the trend has been changing in the last few years with consumers preference for better quality packaged products, launch of differentiated products (such as Tata Sampann Unpolished dals, Tata Sampann Low Oil Absorb Besan, an organic range of pulses) and growth in the number of organised players entering the category (and thereby, expanding the base). Tata Sampann is the first national branded player in this category.

Spices

India is the world’s largest producer, consumer and exporter of spices and accounts for almost half of the global spice trade. The total Spices industry is worth ~Rs. 60,000 Crores, with the branded Spices industry, estimated to be ~Rs. 18,000 Crores in FY 2018-19, is highly fragmented with the presence of many regional players. The branded segment is growing at a CAGR of ~15%. Straight/Pure Spices form ~80% of the segment (with a high-competitive intensity from unorganised players), while blended spices are mainly branded with consumers choosing to be brand loyal. However, there is an increasing demand for branded products, with consumers looking at improved quality products in straight/pure spices (with better quality of raw materials used) and increasing adoption of blended spices in the kitchen (higher convenience and consistency of taste).

Snacks/Ready-to-Cook

Snacks/Ready-to-Cook is an Rs. 40,000 Crores segment with a high share of branded play (Ready-to-Cook is all-branded in comparison to Snacks). The growth is being driven by more players entering the segment and offering consumer different taste choices including healthier food and convenience (such as Tata Sampann Chilla Mix).

Outlook

The company expect the current trends to continue and the demand for the branded products in the staples category to grow at a strong pace. The disruption caused due to COVID-19 is likely to further accelerate the adoption of branded products across the Staples and Spices category as customers are now preferring more branded products than loose and local options.

Financial Highlights

During the year 2019-2020, the Company has completed the acquisition of the Consumer Products Business (India Foods business) from Tata Chemicals Limited (“TCL”). Further details relating to this acquisition are given in a subsequent section of this Board report. The Company also acquired the branded business of Dhunseri Tea and Industries Limited which includes the leading local brands in Rajasthan, India – ‘Lal Ghora’ and ‘Kala Ghora’.

The Consolidated Revenues at Rs. 9,637 Crore reflect an increase of 33% mainly due to the inclusion of India Foods business. On a like to like basis, Revenue from operations from the beverages business at Rs. 7,573 Crore recorded a growth of 4% mainly due to improvement in branded business and in the Non-Branded business mainly due to commencement of instant coffee sales from Vietnam. Profit before exceptional items at Rs. 1,084 Crore includes the impact of acquisition of the Foods business and improved performance of the branded beverage business arising from gross margin improvements and good control of spends partially offset by higher spends behind brands. The non-Branded business has performed marginally behind previous year, mainly due to underperformance in Coffee plantations partially offset by improvement in pepper plantation and commencement of operations in Vietnam.

The Consolidated Profit after tax at Rs. 535 Crore recorded a growth after absorbing the impact of exceptional items. The Group Net Profit for the year remained flat while Group Net Profits net of minority interest at Rs. 460 Crore recorded a growth of 13% as compared to the previous year. Exceptional items for the year primarily relate to costs arising out of the acquisition of the food business and non-cash impairment loss on goodwill relating to the branded businesses in Australia and tea business in the US. The accounting impairment has been recognised due to a combination of factors like COVID - 19 related impact on specific out of home business segments, changes in discount rates due to market conditions and revision in business plan sensitivities.

Recent developments

Tata Consumer Products to divest stake in US-based Empirical Group, Southern Tea ²⁴

April 01, 2021; Tata Consumer Products Ltd (TCPL) on Thursday announced exit from its two US-based joint ventures by selling its stake to the JV partner Harris Tea Company LLC.

TCPL's step-down subsidiaries in the USA have decided to divest their entire membership interest in Empirical Group LLC and Southern Tea LLC to the JV partner Harris Tea Company LLC, USA (Harris Tea), the company informed in a regulatory filing.

The exits from both the JVs are in-line with TCPL's strategy to focus on the core branded business, it added.

"We hereby inform that the overseas step-down subsidiaries of TCPL in the USA have entered into an arrangement for the sale of its entire membership interest held in Empirical Group LLC (Empirical) and in Southern Tea, LLC (Southern Tea) to its Joint Venture Partner - Harris Tea Company LLC on March 31, 2021,” it said

However, the company did not share the amount, which it will receive from the divestment in both JVs.

Empirical is engaged in the sale of tea and coffee for food services and contract customers and Southern Tea is a manufacturing entity managed by Harris Tea Company LLC.

The exits from both the JVs are in-line with the TCPL's strategy to focus on the core branded business, as the businesses of the above JVs do not have synergies with core branded business of TCPL.

"Other than the strategic advantage to TCPL from exiting these JVs, there are no other benefits to the promoter/promoter group of the Company from the said transaction," it added.

Commenting on the development TCPL MD & CEO Sunil D’Souza said: "This divestment is another step towards consolidating and strengthening our presence in international markets and will enhance our focus on the branded tea and coffee businesses in the US market.”

TCPL (formerly known as Tata Global Beverages), which has operations in India and International markets, had reported Rs 9,637 crore as revenue from operations in FY 2019-20.

Its portfolio of products includes tea, coffee, water, salt, pulses, spices, ready to-cook offerings, breakfast cereals, snacks and mini-meals.