Tata Consumer sets foot in the premium D2C coffee market

Tata Consumer products Ltd (TCPL) has launched a premium roasted and ground coffee under the Sonnets brand targeting urban and increasingly discerning coffee drinkers in India.

The move marks TCPL’s maiden foray into the direct-to-consumer market and it will let the company tap a growing number of buyers shopping online, especially during the pandemic when most are cooped indoors and unable to visit cafes and coffee shops.

Sonnets will be exclusively sold online, for now.

“We have been focusing on growing our business especially in beverages, that is, tea and coffee. As part of the focus on the coffee portfolio—which in India is largely instant filter coffee—the idea was how do we keep introducing innovations. Sonnets is a step in that direction, targeted at a more discerning consumer looking for freshly ground roasted coffee delivered to their doorstep,” said Puneet Das, president, packaged beverages, India and South Asia, TCPL.

Sonnets is sourced from Tata Coffee’s plantations in South India. India’s in-home coffee market mainly comprises of instant coffee and filter coffee powder from companies such as Nestlé India, Hindustan Unilever Ltd and TCPL.

The launch of Sonnets will pit TCPL against new-age coffee brands such as Dope Coffee Roasters, Blue Tokai and Araku who specialize in selling premium roasted and ground coffee. These brands have found favour among coffee connoisseurs in India.

The premium coffee market is pegged at ₹70 crore to ₹100 crore a year, said Das. The market is undergoing an evolution in terms of coffee drinking. The launch of the new brand will allow TCPL to grow its portfolio as it tries to grab a bigger share of India’s packaged foods and beverages market, he added.

Last year, TCPL said it will acquire PepsiCo’s stake in NourishCo Beverages Ltd—a joint venture between the two firms.

Earlier this year, it announced the purchase of Kottaram Agro Foods—the maker of Soulfull brand of breakfast cereals and millet-based snacks.

TCPL currently sells pulses, spices and ready-to-cook mixes under the Tata Sampann brand. It also sells beverages under Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand brands in India and overseas.

In a recent interview, managing director and chief executive Sunil D’Souza said TCPL’s “ambition is to become a large FMCG company” with immediate focus on food and beverages. Sonnets will also be available on Amazon. However, Das said the move to offline retail could take time.