A Director in Tata Sons, R. K. Krishna Kumar is also the Vice-Chairman, Tata Global Beverages. In Chennai to launch Tata Water Plus, the country's first nutrient water from NourishCo, an equal joint venture between PepsiCo and Tata Global Beverages, he talks to K. T. Jagannathan on the group's tie-up with PepsiCo and Starbucks.
This joint venture with Pepsi — how will this leverage your Himalayan brand as well?
We want to partner PepsiCo to distribute Himalayan widely. They have the liquid bottle distribution strength. We don't have that. We can tap that strength to take Himalayan to international markets. Hopefully soon, we will take it to one or two countries. A product like Evian is a source product. Given the uniqueness of the water sources, there is no reason why Himalayan can't be taken to other markets and compete with brands such as Evian. The source, our aquifer in the Himalayas, is a unique source. We have vast reserves. We can tap it, bottle it and make it a global brand.
Will you get into bulk water?
No, we aren't excited about it.
Why are you test marketing Tata Water Plus in Tamil Nadu first?
It can be test-marketed anywhere. Tamil Nadu, however, is a market, where Pepsi is strong with Aquafina. It's an indulgent kind of market. If you take one of those states in the north, they may not be able to generate accurate data on how consumption takes place. Also, media spends can be uniform, and out of this exercise, you can get a formula.
You bought and sold Glaceau to Coke, which would have enabled you to enter the ‘Vitaminised' water space. Will we see more flavoured and water with Vitamins from Tata Global stable?
That is what triggered us to develop research on this product. The big difference between then and now: the addition of Vitamins to water changes the taste of water, but they mask it with flavours. Here, we wanted to have a product that tastes neutral and yet carried the nutrients and is more accessible to common people. That was the biggest technical challenge for us.
When the Starbucks alliance gains traction with 50 stores as you are planning, will it see a good off-take of coffee from Tata Coffee?
Our coffee production is about 10,000 tonnes. And, it has its own mandate and agenda globally. Its high quality Arabica coffee will be used by this network in India and outside. We are setting up a modern roasting facility that can supply Indian and requirements abroad. It may not be economically feasible to supply to the U.S. market (for Starbucks) because Latin America is closer to it. Yes, we can supply to other markets, especially to the eastern ones.
The Tatas bought the Barista brand from Sterling's Sivasankaran. Later, they sold it to Lavazza. Why are you again venturing into coffee retailing?
When we bought Barista, we saw the Indian market transforming. Out-of-home consumption was gaining. The experience of going into a store is not about just a product. There are other values that come into the picture. We were a minority stakeholder in Barista. And there was some difference of opinion so we sold out. The same drive — that there is a change taking place in the market — encouraged us to tie up with Starbucks. It has 17,000 stores around the world. It is opening new stores every month. A product like Himalaya or Tata Water Plus can be in any of those stores or all of those stores. We are opening up a new dimension.
Will Starbucks be a premium offering in the Indian market?
Yes, it will be at a price point higher than other products in the market.
Do you think the market is ready for it?
We are seeing a strong surge in demand for that experience. Starbucks is not just about coffee, but the whole experience.