Tata Coffee Performance
Fundamentals of Tata Coffee
|P/E Ratio (TTM)||29.55|
|Debt to Equity||0.57|
Financials of Tata Coffee
|Dec 2022||Mar 2023||Jun 2023||Sep 2023|
|Profit before tax||57.08||75.82||81.91||82.04|
|EPS in Rs||1.45||2.61||2.54||3.04|
About Tata Coffee
History of Tata Coffee
Tata Coffee, known for its production of coffee, tea, pepper, and associated goods, operates as part of the Tata Group, falling under the umbrella of Tata Consumer Products. The company possesses 19 coffee estates in South India, specifically in districts such as Chikmagalur, Kodagu, and Hassan in Karnataka, as well as the Valparai district in Tamil Nadu. Notably, Tata Coffee stands as the largest fully integrated coffee plantation entity globally.
Tata Coffee’s roots can be traced back to 1922 when two coffee plantation companies, Coorg Co. Ltd., London, and Pollibetta Coffee Estates Co. Ltd., London, were acquired by the Edinburgh-based Matheson and Company. These two companies were then merged to create Consolidated Coffee Estates Ltd., Edinburgh, forming the largest coffee plantation in India. The registered office of Consolidated Coffee Estates Ltd. was located at 71 George Street in Edinburgh, Scotland.
During 1966–67, Consolidated Coffee Estates was renamed Consolidated Coffee Limited following a merger with Volkart properties in India, including four estates, two curing works, and an export division. In 1991, Tata Tea Ltd. (now Tata Consumer Products) acquired a 52.40% stake in Consolidated Coffee Limited. In September 1999, Asian Coffee Ltd., Veerarajendra Estates Ltd., and Charagni Ltd. merged with Consolidated Coffee Limited, creating the largest integrated plantation company globally. On August 11, 2000, Consolidated Coffee Limited was rebranded as Tata Coffee Limited.
In October 2004, Tata Coffee and Starbucks signed an agreement for Tata Coffee to supply coffee beans to Starbucks, marking the first time Starbucks sourced coffee beans from India. In February 2013, Tata Coffee and Starbucks inaugurated a roasting and packaging facility in Kushalnagar, Karnataka, with the capacity to produce 375 metric tonnes of coffee annually for Tata Starbucks outlets in India and some of Starbucks’ international markets.
On May 1, 2022, Tata Consumer Products announced a merger with Tata Coffee as part of a reorganisation plan. The merger was expected to be completed by late 2023, with Tata Coffee shareholders receiving 3 shares in Tata Consumer Products for every 10 shares of Tata Coffee.
Tata Coffee Limited is one of the world’s largest integrated coffee cultivation and processing companies. It has business segments in plantations and value-added products.
Tata Coffee owns and operates over 40,000 acres of plantations in India, Vietnam, and Africa. The company produces a variety of coffee beans, including Arabica, Robusta, and Cherry. Tata Coffee is also a leading producer of Indian-origin pepper. The plantations segment is responsible for growing, harvesting, and processing coffee and pepper. The company also has a number of nurseries where it grows coffee seedlings. Tata Coffee is committed to sustainable agriculture and uses a variety of practices to protect the environment and conserve natural resources. The Plantation segment is the larger of the two segments, accounting for around 60% of Tata Coffee’s revenue.
- Value Added Products
Tata Coffee produces a wide range of value-added coffee products, including instant coffee, filter coffee, and roasted and ground coffee. The company also produces a variety of coffee blends and flavoured coffees. Tata Coffee’s value-added products are sold under a number of brands, including Tata Coffee Gold, Grand, and Sonnets. In addition to coffee, Tata Coffee also produces a variety of tea products, including black tea, green tea, and flavoured teas. The company also produces pepper powder and other spices. The value-added products segment is responsible for manufacturing, marketing, and selling Tata Coffee’s branded products. The company has a strong distribution network in India and also exports its products to over 40 countries.
Subsidiaries of Tata Coffee
- Tata Coffee Vietnam Company Limited (TCVCL)
TCVCL was established in 1994 as a wholly-owned subsidiary of Tata Coffee. The company has coffee plantations in the provinces of Daklak, Lam Dong, and Gia Lai in Vietnam. TCVCL also has a processing plant in Daklak province. TCVCL produces both Arabica and Robusta coffee beans and exports them to various countries around the world.
- Consolidated Coffee Inc. (CCI)
CCI is a wholly owned subsidiary of Tata Coffee, based in the United States. CCI is a leading importer and distributor of roasted and ground coffee in the US. The company also has a manufacturing plant in Seattle, Washington, where it produces instant coffee and other coffee-based products. CCI sells its products under a variety of brands, including Eight O’Clock Coffee, Tassimo, and Nescafé.
- Eight O’ Clock Holdings Inc.
Eight O’ Clock Holdings Inc. is a wholly owned subsidiary of Consolidated Coffee Inc. The company owns the Eight O’Clock Coffee brand, which is one of the leading coffee brands in the United States. Eight O’Clock Coffee is known for its high quality and fresh taste.
In addition to the above, Tata Coffee also has a number of joint ventures and associate companies around the world. These include:
- Tata Starbucks Pvt. Ltd. (India)
- NourishCo Beverages Ltd. (India)
- Tata Consumer Soulfull Pvt. Ltd. (India)
- Tata Tea Extractions Inc. (US)
- Amalgamated Plantations Pvt. Ltd. (India)
- Kanan Devan Hills Plantations Company Pvt. Ltd. (India)
- Chacko Purackal Thomas, Managing Director and CEO
Chacko Purackal Thomas serves as the Managing Director and CEO of Tata Coffee Ltd. With a career spanning over 27 years, he has amassed valuable experience in the field of the Plantation Industry, demonstrating expertise in various areas including plantation, Business Strategy, Sales, and Marketing. Mr Chacko Thomas commenced his journey with the organisation on August 4, 2015, and has since risen to the position of Managing Director and CEO at Tata Coffee. Prior to his tenure with Tata Coffee, he held the position of Managing Director at Kannan Devan Hills Plantations Company Private Limited, situated in Munnar.
- The company is actively engaged in producing premium coffee beans with an emphasis on sustainable practices. This includes initiatives related to water resources, eco-friendly practices, and quality control. Management should continue to prioritise and invest in sustainable coffee production.
- The coffee company aims to convert prospective customers and enter new geographies. Management’s outlook should involve strategies for diversifying product offerings and expanding into new markets to tap into the expected growth in global instant coffee consumption.
- To maintain high-quality crop production, management needs to focus on factors like harvesting at the right time and aligning with plantation certification standards. Quality control and certifications should remain a core focus.
- For the tea segment, management is prepared to capitalise on the expected 4.5% CAGR up to 2027 in the Indian tea market. This includes addressing trends like self-care, societal care, and health benefits awareness. Management should also consider expanding the product portfolio and leveraging sustainable tea concepts.
- Given the increasing disposable income in developing regions and the preference for premium tea blends, management should look to target the growing urban and middle-class population with a focus on premium tea products.
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What is the Share price of Tata Coffee (TATACOFFEE)?
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What is the total Asset of Tata Coffee?
The total asset of Tata Coffee is Rs. 3,689 crores.
What is the main business of Tata Coffee?
The main business of Tata Coffee is the production, trading, and distribution of coffee, green bean, tea, and pepper. It operates 18 coffee estates, 6 tea estates, and 3 instant coffee plants at Toopran, Theni, and Binh Duong.
Who are the promoters of Tata Coffee?
The sole promoter of Tata Coffee is Tata Consumer Products Limited with a 57.48% shareholding.
What are the Subsidiaries that comes under Tata Coffee?
The main subsidiaries that come under Tata Coffee are Consolidated Coffee Inc., USA, Eight O’ Clock Holdings Inc., USA, Eight O’ Clock Coffee Company, USA, and Tata Coffee Vietnam Company Limited, Vietnam.