Food & Beverage News: Top Stories - Tata Tea exits beverage retailing, to focus on branded products

Tata Tea, the second largest branded tea maker in the world, will exit the beverage retailing business, including Chai Unchai, as part of the group’s strategy to focus on its branded products. Tata Coffee, another group company, which sold its 34.3% equity in retail chain Barista to NRI investor C Sivasankaran five years ago, has also dropped its plan to re-enter the business, according to a report in Business Standard.

In a move to refocus on the growth of brands, the company had decided to exit from café business like Chai Unchai in Bangalore, said Sangeeta Talwar, executive director, marketing, Tata Tea. She also confirmed that Tata Coffee, a listed subsidiary of Tata Tea, would not pursue its plans in the café business. Since margins from the café business is volatile, Tata Tea would be interested to cash in on its core competence in the sale of branded products.

The company, which unveiled Chai Unchai in Bangalore in January 2008, was planning to add more outlets in the city in not just existing kiosk format but also in the form of tea parlours, on similar lines with urban coffee outlets. The company has five Chai Unchai outlets in the city. Tata Coffee was waiting for the non-compete contract it signed with Barista to expire for launching its café network. The largest coffee plantation company in Asia is also running its branded coffee powder retail business through Bean Coffee junction.