Mumbai: Tata Tea Ltd is looking to acquire more beverage brands to tap growing consumer demand for health drinks, taking on the world’s biggest drinks companies. Tata Tea, the world’s second-biggest branded tea firm, has conditionally agreed to sell its 30 percent stake in Energy Brands -- which it bought last year -- for $1.2 billion to Coca-Cola Co.
But the company is also competing with Coca-Cola in other markets where it is looking to buy specialty teas and beverages.
“We increasingly bump into them (Coke) and compete with them,” Peter Unsworth, chief operating officer at Tetley Group, a unit of Tata Tea, said late on Tuesday.
He mentioned the example of Brazilian tea and beverage maker Leao Junior, which Coca-Cola bought in March, that Tata Tea was also considering.
“If you look at Coke’s recent acquisitions, like Fuze and Glaceau, they’re buying them for the same reasons that we consider,” he said, referring to the juice and tea company and the vitamin-water brand owned by Energy Brands, respectively.
Coke has lagged rival PepsiCo Inc. in offering alternatives to the sugary soft drinks that young consumers are increasingly avoiding, but its recent acquisitions indicate it is focused on closing the gap.
Tata Tea, which has acquired herbal and fruit tea brands in eastern Europe and the United States, recently bought almost 26% in India’s Mount Everest Mineral Water and has made an open offer to buy a further 20%.
A local news report recently said Tata Tea was also evaluating a bid for Cadbury Schweppes Plc’s Snapple range of beverages which, Coke is also evaluating.
“We’re looking at all opportunities, so we may be looking at it,” Unsworth said, declining to specify more details.
Meanwhile, Tata Tea is expanding its presence in Coke’s home market, where it recently signed a deal with Yum Brands Inc.’s Taco Bell for Tetley iced tea. The deal could be extended to other Yum companies such as Pizza Hut and KFC, he said.