Tata Global Beverages Ltd. has announced its results for the year ended FY 2015-16. For the financial year, income from operations stood at Rs 8111 crore, up by 3% in constant currency terms. Profit from operations at Rs 532 crore is lower than the previous year due to spend on new initiatives, new launches and higher competitive intensity in certain key markets. Post the impact of exceptional items, the Group Consolidated Net Profit at Rs 326 crore reflects an increase of 32%.
During the quarter the company recognized profit from sale of non core investments. The company also recognized non-cash impairment loss mainly on goodwill relating to the branded businesses in Eastern Europe and branded tea business in the US. While the company is actively pursuing various growth opportunities, the accounting impairment has been recognised due to factors like macro-economic instability, decline in category growth rate and higher competitive intensity.
The year has seen strong focus on investing behind brands, growing the green tea segment and innovating for growth.
Green tea has shown growth across key markets. The Tetley Super Green tea range- the first functional green teas in UK has shown significant growth and was also awarded the “Product of the Year 2016’, the world’s largest consumer voted awards for product innovation. TGB is a market leader in green tea in India and the category continues to show good growth fueled by sustained marketing support through the year. In Australia, new flavor variants such as steamed green tea with lychee were added to the product range.
The year saw the entry of TGB into the branded coffee segment in India with the launch of Tata Coffee Grand. The product saw good consumer response and was backed by a differentiated marketing campaign which created good visibility for the brand launch. The MAP coffee brand in Australia saw good growth in the grocery sector. Eight O’ Clock coffee in the USA entered the instant coffee segment and the Roast & Ground can segment. Tata Starbucks continues to expand steadily in India with 82 stores across 6 cities.
In the water segment, Himalayan natural mineral water revamped its website to better communicate its core brand promise of ‘Live Natural.’ The brand has engaged in impactful brand activations such as premium culinary experiences. Tata Gluco Plus, an affordable on-the-go rehydration drink, recorded very good growth after improvements made to the marketing mix and brand communication. The focus for the water business continues to be on enhancing market penetration & brand building.
Commenting on the results, Ajoy Misra, Managing Director and CEO of Tata Global Beverages, said “Tata Global Beverages continues to leverage global trends such as health & wellness and convenience through our focus on green tea, entry into branded instant coffee and strengthening our functional waters portfolio. During the year, we have initiated key product launches, strong marketing campaigns and entry into new segments. Innovation, investing behind our brands and managing operational efficiencies will be key to growing in a challenging market environment.”