'Future Indian coffee market will be driven by young consumers and people living in metros'

Interview, Puneet Das, president, Packaged Beverages, Tata Consumer Products Ltd

Puneet-Das Puneet Das

Puneet Das is the president, Packaged Beverages, (India and South Asia), Tata Consumer Products Limited. He is a marketing professional with about 20 years of experience in the FMCG segment across India, Africa and the international markets. Apart from his Tata Consumer Products experience, he has held senior marketing roles across FMCG majors such as Marico, Pepsico, and GSK Consumer Healthcare, working on brands such as 7Up, Boost, and Horlicks. An alumnus of St. Stephen’s College, Delhi, Das holds a post-graduate diploma in management (MBA) from XLRI, Jamshedpur. In a freewheeling chat with THE WEEK on the sidelines of a Tata Coffee event in Coorg, Karnataka, Das talks about the marketing strategy of Tata Coffee and how it is trying to tap into the Indian market with different product offerings in the coffee segment.

India has predominantly been a tea drinkers' market; but now coffee is becoming popular. What is driving this market in India?

The tea category is ten times bigger than the coffee category. Coffee is around Rs 3,200 crore, out of which around 60 per cent is in the southern part of the country whereas tea is spread all across. What is really driving the coffee category in India is the instant coffee segment which is around 85 per cent of the coffee category while filter coffee remains big with 40 per cent when it comes to volume. In terms of value, it is the instant coffee which is driving the coffee segment in India.

In the rest of India, metros are driving the growth for coffee. Coffee outside south India is mostly in cafes, or when people are traveling or at their workplaces.

What steps are you taking to tap into this market?

Our primary focus is on growing the instant coffee category. We are tapping the southern market with differentiated products to suit the tastes of different regions of the south. At the same time, we are also expanding in the rest of India market as well with the Tata Coffee Premium brand. For consumers who are seeking variety, we are offering them convenience. For instance, we have Tata Coffee quick filter for people who want the filter like coffee taste but do not have the time to prepare it. One just needs to mix it with milk and one can enjoy a filter-like experience.

Similarly, we have Tata Coffee cafe specials where consumers are having cappuccinos at cafes, but do not really know how to make it at home. By using our cafe specials, they can have the convenience of making it at home and have a very cafe-like experience by just mixing it with milk. We are tapping into these trends of variety seeking and convenience which are driving the core markets of the south as well as the rest of India. We are seeing new users coming in towards the coffee category. Both the tea and coffee categories will keep growing.

Which is the most popular variety consumed in the domestic market?

In the domestic market, it is the Robusta category which is widely consumed, and most of the varieties in the domestic market has Robusta.

What kind of challenges do you face in the Indian market?

We are a fairly new entrant in the coffee market in India but in the last three years, we have really upped the trajectory. In the last financial year, we grew at 31 per cent, and 21 per cent in the last quarter. We are leveraging the might of our distribution network in order to get into more and more markets and more and more outlets and households.

Can you elaborate on the kind of innovations you have embarked upon?

From a product point of view, we have differentiated products both in the instant coffee segment, both for classic and premium. For instance, we have leveraged trends such as ASMR (Autonomous Sensory Meridian Response) which highlights the senses. It basically heightens the senses and a person's brain responds to that. We leverage that trend in telling the story of the coffee from the bean to the cup. All this is making us stand out from the usual coffee players. Our growth indicates that we are heading in the right direction. Tata Coffee's branded business has grown 31 per cent in the last financial year 2022-23.

Broadly speaking, most of our innovation has happened in the last two to three years. We have a D2C brand as well, 'Sonnets'. We had launched it targeting consumers who are kind of connoisseurs of coffee—it is a premium micro-lot roast and ground coffee. The quality is quite high and the consumers have the convenience of customising the roast type of the coffee. D2C is a super niche segment for us but we have seen that a lot of consumers are going online and are looking for these kinds of offerings.

Have you embarked upon any specific strategy to grow your branded coffee business?

Our strategy is that where coffee is a habit, such as in south India, we are tapping into the hyperlocal taste pallets. We have just launched a liquid decoction coffee which has different variants targeted at the different tastes of coffee consumers in the south. We are targeting other consumers in India with cafe experiences at home with the Tata Coffee quick filter, cafe special and cold coffee which can be straight away be mixed with milk. It is very clear that when you enter the market, you have strong entrenched players in the market along with a lot of regional and local players. However, when you come with a differentiated product, then your chances of success go up. We have been on a growth trajectory for the last three years and we are getting good consumer acceptance.

Where do you see the popularity of coffee heading towards in India in the future?

The future Indian coffee market will be driven by young consumers and people living in metros. Many have grown up with coffee but do not have the time to prepare a decoction and want to do things instantly. Hence even in the core traditional markets, we are seeing faster adoption of instant coffee happening. It is the convenience without compromising on the coffee taste which is sought by consumers across the traditional market.

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