- Tata Global Beverages

53rd Annual General Meeting
Financial Year 2015-16
Presentation by
Ajoy Misra, Managing Director
CONTINUING INNOVATION AND INVESTMENTS BEHIND BRANDS
2
Focus on Innovations continue – new products launched
Tata Tea Gold Mixture
Tata Tea Fusion
Tetley Super Greens/Fruits (UK)
Tata Coffee Grand (India)
Tetley Signature
Collection (Canada)
EOC Coffee Instant Can/Jar (USA)
Mr Barista (Australia)
Teapigs Matcha drink (USA)
3
Continuous Investment behind our power brands
Sr.
4
Restage of the Tetley Brand
Tetley brand re-stage meets
key objectives:
 Enhance brand positioning
 Modernise & Premiumise
brand identity
New logo and
packaging
 Improve fixture navigation
& shopability
Celebrating success at iconic moments in British history where there is a
clear role for tea as a catalyst
Brand new TV
campaign
amplified with
print and PR
Winning the war
Creating the best music
Winning the world cup
5
Green tea and super premium segments growing in key markets
UK Green Tea
India Green tea
 Our growth faster than
category growth in both
volume and value terms
 Growth rate in double digits
 Supergreen gaining
momentum – voted
product of the year
 Brand activation - increasing
engagement on social media
 Investments in Modern
trade
 Maintains market leadership
position in this category
Teapigs
 Double digit growth rate
 #1 super premium brand in UK
and #2 in Canada
 Gaining traction in e-commerce
and foodservice channels
 Expanding presence in USA as
well as developing new export
markets
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EMERGING TRENDS
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Emerging trends
Category growth – USA
12%
9%
7%
6%
Sports and
Energy Drinks
Carbonates
RTD Tea
RTD Coffee
0%
Tea
• Carbonated Soft Drinks category growth declining in
developed markets
7%
4%
• Growing preference for natural and healthy alternatives
Coffee
Health & Wellness
2010-2015 CAGR
Bottled Water
• Growing recognition of health benefits of tea
Non-black vs Black – relative growth
Growth beyond
mainstream black
tea
• Non-black segment growing faster than black
• Bias towards variety and novelty
2015-2020 CAGR
Canada
USA
1.3x
2.0x
UK
India
3.7x
1.9x
Source: Euromonitor (based on value @ manufacturer selling price)
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Emerging trends
Coffee Pods % of total coffee category - USA
• Single-serve pod systems growing for coffee as well as tea
Premiumisation and
format innovation
35%
30%
25%
• Innovative packaging formats emerging e.g. pyramid tea bags
17%
11%
• Tea and Coffee as artisanal products
7%
2010
2011
2012
2013
2014
2015
Source: Euromonitor
New channels
• Emergence of specialty tea store and café concepts
New channels
• E-commerce players focused on tea and coffee – emphasis
on personalisation
9
STRATEGIC PRIORITIES
10
TGBL’s strategic priorities
Base business
rejuvenation
• Focus on key brands in core categories: Tea, Coffee, Water
• Profitable growth in core businesses: India, UK, Canada, USA (Coffee), Coffee Extractions
 Focus on brand building, premiumisation and enhancing distribution reach
 Grow non-black tea segments – green , fruit & herbal
 Develop alternate channels (e.g. foodservice, e-commerce)
Invest for growth
• Continue growth momentum in India JVs: Starbucks and Nourishco
• Accelerate expansion of super premium brand Teapigs into new markets
• Scale up businesses in Middle East, Australia (Coffee) and USA (Tea)
Drive Innovation
agenda
• Commit resources to bolster R&D pipeline and launch new product lines with a focus on specific
themes: premiumisation, health & wellness and convenience (new formats)
• Strengthen innovation and new product development processes
Operational
effectiveness
• Reinforce organizational capabilities
• Actively manage commodity costs: strategic buying, blend optimisation
• Cost management
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PERFORMANCE HIGHLIGHTS
12
Snapshot of financials
Rs Crs
7993
- 17%
Rs Crs
+ 2%
8111
2015
642
2015
532
2016
2016
+ 32%
Rs Crs
2015
2016
2015
2016
Total Operating Profits
Total Operating Income
326
2015
248
2016
Group Net Profits include profit on sale of
investments net of impairments taken
2015
Group Net Profits
2016
13
Increase in Dividend Payout over time
Market Capitalisation increases to Rs 7637 crores in 2015-16 from Rs 2948 crores in 2004-05.
As at 17th of August, 2016 Market Capitalisation at Rs 8691 crores ….. an increase of approx 3 times over
2004-05
Exceptional Dividend
142
142
2014/15
2015/16
133
2012/13
139
133
2011/12
2013/14
124
2010/11
108
2008/09
124
92
2007/08
Dividend declared 225%, same as PY.
2009/10
92
2006/07
67
2005/06
2004/05
56
Rs crores
124
Dividend
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Performance Highlights – India
 Base Business – Grow current brands and distribution
•
•
•
Maintained volume and value leadership
Growth in national as well as regional brands
o Brand re-stage for Tata Tea Premium.
o Turnaround for Kanan Devan
White space: Successful new product launch in Maharashtra – Tata Tea
Gold Mixture
 Base Business – Upgrade and grow value/serve
•
•
Significant growth in Green tea continues
Launch of Tata Tea Fusion
 Expand portfolio beyond black and green tea
•
Successful launch of Tata Coffee Grand – high impact launch created
desired buzz and visibility
 Good management on commodity costs
15
Performance Highlights – Key International markets
 UK
•
•
•
•
Green tea sales continue to perform well – led by Supergreens
Moderate growth in retail channel; strong performance with top customers.
New packaging and media campaign well received
Successful launch of Super-fruits
 USA
•
•
•
•
Moderate growth in EOC in-market volumes in an aggressive competitive
environment
Impact of high Coffee costs in the beginning of the year
Tetley continues to gain share in black and green segments
New launches:
o Incremental sales from the new Can and Instant coffee products
o Tetley Herbal Infusions roll-out underway.
 Canada
•
•
Maintains volume and value leadership
New products continue to gain distribution
o Tetley Signature Collection launch
o Teapigs is now #2 brand in the super-premium category
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Performance Highlights – Incubatory Businesses
 Starbucks JV
•
•
•
•
Topline growth with good store-level profitability
Currently operating 84 stores
Expansion to continue – new cities, new formats
Focus on reducing costs through localisation and other initiatives
 Nourishco
•
•
•
Tata Gluco Plus has demonstrated significant growth
Himalayan performance steady; reworking Tata Water Plus model
Focus on enhancing market penetration and brand building
 MAP (Australia Coffee)
•
•
•
Topline growth led by single-serve capsule sales in grocery channel
Improving market position
Expanding presence in channels beyond grocery
 Middle East
•
•
Improving market share in 2 key Gulf markets, Saudi Arabia and UAE
Tetley is also making good progress in the smaller GCC markets
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Performance Highlights – Non Branded Business
 Instant Tea
•
•
•
Topline growth in US and other export markets
Lower input costs boosts profitability
China business yet to stabilize
 Plantations
•
•
•
Topline growth aided by good pepper/ coffee sales
Coffee improvements due to Robusta
Tea plantations impacted due to lower commodity costs
and wage revision
 Instant Coffee
•
•
Stable performance
Growth led by improved agglo coffee sales
 Associate Plantation Co’s in India
•
Impacted due to wage revision and production disruptions
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Other Significant Items
Employee engagement
Affirmative Action
TGB moved up to the next band in the
Tata Group wide Affirmative Action
assessment
Process Improvements
Recognition within Group
 TGB crossed over to the “Good
Performance” from the “Early improvements”
in the Tata Group wide Business Excellence
model.
 Next milestone would be “Emerging Industry
leader”
Tata Excellence in Communication awards
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Sustainability initiatives
“Sustainable products are good for people, good for the planet and also good for
business”
Sourcing it Right
Protecting the environment
Sustainable Plant
Protection
Formulation (S-PPF)
• Specific Project
with ETP and
Tea Research
Association
Improving lives
Breaking Barriers
Sristhi
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Awards and Achievements
Over 50 accolades for the Power of 49 campaign
Tetley in UK wins five Great
Taste Awards!
TGB wins at the Effie
Awards – Gold and Bronze
Eight O’Clock Coffee wins
two Reggies
Website of the Year Award
2015 in Consumer Goods
category
Tetley Super Green Tea awarded
UK Product of the Year 2016
Tata Coffee wins two awards at the
12th Golden Leaf India Awards 2016
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STRATEGIC CENTRICITY
PRIORITIES
CUSTOMER
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Spotlight on Consumer Centricity - Connect with every sip
Tata Global Beverages Annual Report
2015-16
- Highlights our focus on consumer
centricity across the organisation using
the 3Ds of Develop, Deliver and Delight
- Features some of our best efforts in
engaging with the consumer from
source to cup
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Some of our Initiatives in the 3Ds
Develop
Deliver
Delight
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Thank you