Recognizing the comparatively lower coffee consumption rates in regions outside of South India, Tata Consumer Products is resolute in its efforts to enter India’s branded coffee market, which is estimated to be worth around INR 3200 crore. To cater to the northern region, the company has rolled out specialized products.
Numerous research studies indicate that more than 70 percent of coffee consumption is centered in the southern regions.
The data reveals that the coffee market in Tamil Nadu, encompassing both rural and urban areas, commands an impressive 90 percent share, with an average monthly consumption of around 85 grams.
Conversely, throughout urban and rural regions in India, coffee exhibits a penetration rate of 39 percent, with an average monthly consumption of 38 grams, according to findings from the Kantar World Panel.
In anticipation of International Coffee Day, celebrated on October 1, Puneet Das, President of Packaged Beverages India and South at Tata Consumer Products, discussed the company’s branded coffee business and outlined the diverse market strategies aimed at establishing a significant presence in the country.
At present, the Indian branded coffee market is estimated to be worth around INR 3,200 crore, with the instant coffee segment contributing to 80-85 percent of its total value.
“In the non-south market, consumers do not understand what chicory is and hence 100 per cent of coffee blends and decoctions work better in those markets,” explained Das.
The brand initially offered a coffee chicory mix, primarily catering to the South market. However, last year, they introduced Tata Coffee Premium, a 100 percent coffee blend targeted at non-South markets. Furthermore, he mentioned that Coffee Grand and Premium are the key contributors to the volume in the instant coffee business.
“The idea is to grow and eventually become a serious player in the coffee segment. So, we intend to scale up some of the offerings much faster,” Das said. The business grew 31 per cent last year and 21 per cent in the last quarter, he added.
In relation to the prevailing demand patterns for tea and coffee, Puneet Das observed that rural consumption and expansion had encountered obstacles because of inflationary pressures until the previous year. Nevertheless, starting from December 2022, there has been a relatively optimistic increase in volume, although it remains within the single-digit range.
