Strategy of Tata Coffee

The strategy laid out by Tata Coffee has been explained in the article 'Back to beans' by Surajeet Das Gupta which appeared in Business Standard dated 4-Oct-10.

Over the next few years Tata Coffee will move its brands like Tata Cafe, Mr. Bean, and Coorg to group company Tata Global Beverages (earlier Tata Tea) so that it can focus on commodities.
In March, the Tata Coffee brass began to brainstorm and came up with a four pronged plan.

1. To get out of the brands and leave the task to other group companies like Tata Global Beverages.

2. To expand the plantation business by acquiring estates overseas.

3. To reduce the dependence on coffee and sell other commodities as well.

4. To collaborate with Tata companies as well as others to sell its products the world over. By 2015, 40% of the company's revenues would come from inorganic growth.

According to Hameed Huq, MD Tata Coffee, there aren't too many plantation and commodity companies which have succeeded in brands as well. Their core competence remains running plantations and producing commodities. Brands are complex matters which require a different set of skills.

As land is too expensive in India, Huq plans to acquire it in Uganda, Zambia, Ethiopia and Laos. Plantations there are available at prices which are 50 to 60% cheaper than in India. Many of these plantations are located near equator which is the best place to grow coffee. Huq wants 3000 tonnes of Arabica coffee to come from these overseas plantations - almost 25% of its annual coffee production.