Tata Tea Blog

Friday, September 07, 2007

Tata Tea eyes broader range of water products

Tata Tea Ltd plans to use a newly acquired mineral water brand to launch premium and mass-market packaged products for health-conscious consumers, a senior company official said on Thursday.

Tata Tea, the world's second-biggest branded tea firm, has taken management control of Mount Everest Mineral Water Ltd after it bought nearly 26 percent of the company in June. It plans to make an open offer for a further 20 percent. Tata Tea will use the "wellness" plank to sell Himalayan mineral water and other water products, Pradeep Poddar, managing director of Mount Everest Mineral Water, told Reuters by telephone.

"The opportunity in water is very exciting for us," he said. "We are looking at niche segments such as functional and enhanced water, as well as mass offerings for the lower end of the consumer pyramid," he said, referring to vitamin- or mineral-enhanced water and basic packaged water.

Last year, Tata Tea bought 30 percent of U.S. vitamin water maker Energy Brands Inc. It sold the stake to Coca-Cola Co in May for $1.2 billion, nearly twice what it paid, but said it was still keen to increase its presence in non-tea beverages, including through acquisitions.

Local media have reported Tata Tea was interested in U.S.-based AriZona Beverages as well as Cadbury Schweppes Plc's North American beverages unit.

Tata Tea, which owns the Tetley brand, has bought herbal and fruit tea brands in the United States and eastern Europe, and has a green tea venture in China. It also plans a venture in Russia.

Tata Tea would also look at launching Himalayan water, or other brands it develops, in overseas markets, Poddar said.

"We will have a plan on the table in three to six months," he said, declining to specify investments.

The Indian market for packaged water, estimated at about 20 billion rupees ($490 million), is growing quickly on the back of higher incomes and the expansion of modern retail.