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Monday, April 12, 2010

TATA- PEPSI JV to grab Health Drink Market

Now TATA AND PEPSI has entered into a join venture for creating a new entity for non carbonated drinks. The new company will be exclusive for the Indian market, said Sanjeev Chadha, chairman of cola and snacks foods multinational PepsiCo.

now the question is Pepsi has already a JV with HUL for marketing, selling and distributing Lipton ice tea. and TATA TEA and HUL are in stiff competition to grab that market. HUL competes with the Tata Group firm in the packaged tea market.now it would be interesting to see what HUL has to say about this. Though both TATA TEA and PEPSI has said it wont affect any existing deals and would be taken as a step forward fro another healthy competition.

Under the new entity both the companies are trying to bring their non carbonated based products under the new entity.PEPSI has products like Nimbooz, Aquafina and tropicana juices as their non carbonated drinks in their portfolio. While TATA include Tata Tea’s ‘good for you’ liquid beverages such as Himalayan packaged water and T!ON — a fruit juice and tea-based beverage.

TATA which has been trying to reposition itself as branded beverage company, this JV would be crucial. India’s health and wellness food sector, estimated at Rs 5,050 crore, is growing at 24% a year, a report by Tata Strategic Management Group said last week.This JV is definitely going to redefine the particular market segment and would add fuel to already going war between HUL, NESTLE, P&G, Coca Cola and others.

1 comment:

  1. Natural and organic food and drink sales experienced strong growth over the last decade, and in particular in the last five years as mainstream FDM aggressively started stocking natural/organic name and private label brands

    Its likely focus will be on the lower end of the market will ensure that PepsiCo’s existing global alliance with Unilever to sell Lipton ice tea, which focuses on the mid- to-premium segment, will not be impacted. The new tieup will give PepsiCo the opportunity to be perceived as a wholesome beverages company, not just as a company making fizzy drinks.

    Tata Tea will get a larger foothold in the wellness beverages segment after an earlier attempt to foray in the category had to be aborted within a year.

    The size of energy drink market in India is currently estimated at about Rs 500 crore and could double to over Rs 1,000 crore by the end of this year, as per market research firm Datamonitor Plc.

    In comparison, the carbonated drinks market in India is already valued at over Rs 6,000 crore, but the growth rate there is much slower as compared to non-carbonated space.

    The transaction must be approved by the shareholders and executive boards of the two companies, as well as by authorities.

    So there are some positive sign that the market is providing for this J.V but there some basic hurdles that the companies have to over come to be successful...

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