Final Presentation
Topic : Himalayan : The Natural Mineral Water
Name : Zain Uddin
Class : PGDM 1
Roll no : 60
By:
1
Introduction 4
FMCG Sector 5
The Growth/Degrowth pattern observed in the sector 6
The Growth/Degrowth pattern observed in the sector 7
Porters Five Forces Model 8
Three Main Segment of FMCG 9
Food and Beverage Industry 10
TATA GROUP 14
Product/Services Profile & Target Market- Product/Services Offered by the Company 16
Competitors 19
SWOT Analysis 22
BCG Matrix of Tata Group 25
Marketing Mix of TATA group 26
Share Performance & Market Capitalisation 28
Financial Highlights for the Year 29
Balance Sheet of Tata Global Beverages 30
Cash Flow Statement 31
Income Statement 32
Organization Structure 33
2
3
Introduction
• Himalayan is marketed by NourishCo, a joint venture between Tata Global Beverages
and PepsiCo India.
• The water is bottled at source from a pure and unspoilt underground moving stream
aquifer, which is about 400 feet below the surface, located at the foothills of the Shivalik
range in the Himalayas.
• The catchment area has no human activity and is pollution-free. Every drop travels
through layers of rock, sand and silt for over 20 years.
• These layers act as natural filters and keep the water naturally pure and bacteria-free.
During this journey, the pure water picks up essential minerals and acquires its fine,
unique taste before reaching an underground reservoir.
• The aquifer is naturally protected from pollutants by a thick impervious layer of clay
that acts as a barrier and prevents any contaminants
from passing through it.
4
FMCG Sector
• Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year.
Examples of FMCG generally include a wide range of frequently purchased consumer
products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products
and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper
products, and plastic goods. FMCG may also include pharmaceuticals, consumer elec-
tronics, packaged food products, soft drinks, tissue paper, and chocolate bars.
• FMCG is the 4th largest sector in the Indian economy
• Household and Personal Care is the leading segment, accounting for 50 per cent of the
overall market. Hair care (23 per cent) and Food and Beverages (19 per cent) comes next
in terms of market share
• Growing awareness, easier access and changing lifestyles have been the key growth
drivers for the sector
• The number of online users in India is likely to cross 850 million by 2025.
• Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 672 bil-
lion in 2016, with modern trade expected to grow at 20 per cent - 25 per cent per annum,
which is likely to boost revenues of FMCG companies
5
• Revenues of FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and
are estimated to
reach US$ 103.7
billion in
2020.
The Growth/Degrowth pattern observed in the sector
• The FMCG sector in India generated revenues worth US$ 49 billion in 2016.
• By 2020, the revenues of the sector are forecasted to reach US$ 104 billion
• In the long run, with the system becoming more transparent and easily compliable, demonetisa-
tion is expected to benefit organised players in the FMCG industry.
• The growth in sales of major FMCG companies like Dabur, HUL, Marico, in the June-Septem-
ber 2017 quarter, is signalling the revival of consumer demand in India.
• Direct selling sector in India is expected to reach Rs 159.3 billion (US$ 2.5 billion) by 2021, if
provided with a conducive environment through reforms and regulation.
• Edible oil market in India grew by 25.6 per cent in 2017 to cross Rs 1.3 trillion (US$ 20.08 bil-
lion).
• The focus on agriculture, MSMEs, education, healthcare, infrastructure and employment under
the Union Budget 2018-19 is expected to directly impact the FMCG sector. These initiatives are
6
expected to increase the disposable income in the hands of the common people, especially in the
rural area, which will be
beneficial for the sector.
The Growth/Degrowth pattern observed in the sector
Good Growth in Volumes and realisations:There has been a sharp turnaround in volume
growth which has again picked up steam from as low as 4% a few quarters back. This volume
growth could be one of the core reasons supporting the enhanced performance of FMCG stocks
End of demonetisation woes for FMCG: One of the sectors where the demonetisation exercise
took its toll is in FMCG with nearly half of its incremental demand coming from rural or semi-ur-
ban areas, these were the worst hit by the demonetisation exercise. With nearly 85% of the demon-
etised currency back in circulation liquidity is no longer an issue. That has also meant that the vol-
ume growth has regained momentum something that help was a major challenge a couple of
quarters back.
GST preparedness: That is expected to be critical for companies going forward. How they ac-
custom themselves to this tax regime will determine whether it will be business as usual for them
in the coming quarters.
Sharp Fall in agriculture commodities
7
Most of the FMCG companies in the Indian market also have a major exposure to the processed
foods space. Over the last one year the price of most of the agricultural inputs that go into pro-
cessed foods like flour, edible oil, pulses, cereals have all gone down sharply due to glut of supply
in the agri-market. That has led to the reduction in input cost for these FMCG companies.
Threat of new
entrants
Low
Porters Five Forces Model
• Porter five forces analysis is a framework that attempts to analyze the level
of competition
within an in-
Power of dustry and
Power of Suppliers business
Buyer Low strategy de-
High velopment.
• It draws upon
industrial organization
economics to derive five forces that determine the competitive intensity and
therefore attractiveness of an Industry.
• Attractiveness in this context refers to the overall industry profitability.
• An “unattractive” industry is one in which the combination of these five forces
acts to drive down overall profitability.
• A very unattractive industry Threat of Sub- would be one approaching “pure
competition”, in which available stitute profits for all firms are driven to normal
profit. High
Michel Porter’s five forces include:
1.Threat of new entrants
2.Bargaining power of customers (buyers)
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3.Bargaining power of suppliers
4.Intensity of competitive rivalry
5.Threat of substitute products or services
• Heavy R&D required
• Large No. of Choices • Wide Distribution Network
• Information is freely available Required
• Availability • Government Rules and Poli-
cies Barrier
• FDI and Food security bill
• Background Integration
• Large number of Suppli-
Competitive
ers
Rivalry
• Low Switching cost
High • Heavy R&D required
• Wide Distribution Net-
work Required
• Government Rules and
Policies Barrier
• FDI and Food security
• Large number of players bill
• High price sensitivity
• Aggressive sales promotion
Three Main Segment of FMCG
9
Healthcare Food and Beverages Household and Personal Care
31%
50%
19%
Food and Beverages
• It accounts for 19 per cent of the sector.
• This segment includes health beverages, staples/cereals, bakery products, snacks, chocolates, ice
cream, tea/coffee/soft drinks, processed fruits and vegetables, dairy products, and branded flour.
Health care
• It accounts for 31 per cent of the sector.
• This segment includes OTC products and ethicals.
Household and Personal Care
• It accounts for 50 per cent of the sector.
• This segment includes oral care, hair care, skin care, cosmetics/deodorants, perfumes, feminine
hygiene and paper products, Fabric wash, household cleaners
Food and Beverage Industry
• The global food and beverages market was estimated to be over $5650 billion as of 2017.
10
• The segments in the food and beverages market include alcoholic – beverages, non alco-
holic – beverages, mineral water, pet food, tobacco, grain products, meat, poultry and
seafood, fruit and vegetable canning, pickling, and drying, frozen food, and dairy.
• Many manufacturers and producers are increasingly using natural ingredients and have
also reduced the use of artificial colours and flavours.
• Health concerns of consumers is increasing the sales of products with natural ingredients,
additives and colouring agents.
11
Global Bottled Water Market, Mark
400
300
200
100
0
2013 2014 2015 201
• The consumption of bottled water in 2017 was the highest in the Asia Pacific region, ac-
counting for 42% of global consumption.
• The Asia Pacific region is a host for two of the most populated countries where poor pub-
lic infrastructure is quite common and access to clean drinking water is limited, which
drove the market to such numbers.
• These conditions, in particular, raise consumers’ concerns and prompt them to seek out
clean drinking water to maintain a healthy life.
• From 2014 to 2017 due to increasing concern regarding various health problems caused
by consumption of contaminated water, the global bottled market grew to over $200 bil-
lion following 9% yearly growth, according to the report on the bottled water market
from The Business Research Company.
12
• In addition to health concerns, rising disposable income also let people in the Asia Pa-
cific region influence the growth of the market significantly.
13
TATA GROUP
• Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in
India, comprising over 100 independent operating companies.
• The group operates in more than 100 countries across six continents, with a mission 'To
improve the quality of life of the communities we serve globally, through long-term stakeholder
value creation based on Leadership with Trust.
• Each Tata company or enterprise operates independently under the guidance and super-
vision of its own board of directors and shareholders.
• There are 29 publicly-listed Tata enterprises with a combined market capitalization of
about $116 billion (as on March 31, 2016). Tata companies with significant scale include Tata
Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Bever-
ages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.
• Tata Global Beverages is the second-largest tea company in the world
Tata Global Bevereages
Tata Global Beverages focusses on branded natural beverages — tea, coffee and water.
•
With a long history and experience in the beverages market, and a heritage of innovation and
development, the Company has evolved from a predominantly domestic Indian tea farming en-
tity to a marketing and brand-focussed global organisation.
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• Tata Global Beverages is the 2nd largest player in branded tea in the world. Our ambition
is to expand our global footprint by entering new markets and fresh channels with our brands.
We have a strong portfolio of brands, including Tata Tea, Tetley, Jemča, Vitax, Eight O’Clock
Coffee, Himalayan, Grand Coffee and Joekels. Around 300 million servings of our products are
consumed everyday, bringing many magical beverage moments to consumers across the world.
• Over 60% of our consolidated revenue originates from markets outside India and more
than 90% of our turnover is from branded products. The business has diversified and expanded
significantly over the last decade, with the Company now employing 3,000 plus people, and
having a significant brand presence in 40 countries worldwide.
• Tata Global Beverages has grown through innovation, strategic alliances and acquisitions,
and organic growth.
• Sustainability is at the heart of our plans for long-term success. We are an active member
of Ethical Tea Partnership (ETP). The ETP is working with Rainforest Alliance to help estates
achieve Rainforest Alliance certification, and this will facilitate the launch of Tetley products
carrying the Rainforest Alliance Certified™ seal. In India, Tata Global Beverages is one of the
founding members of Trustea — a multi-stakeholder initiative led by the Tea Board of India to
sustainably transform the tea industry in India.
Global Alliances
At TGB, our ambition is to expand our global footprint by entering new markets and new
channels with natural beverages that create many moments of magic for our consumers through
the day. With brand presence in over 40 countries, we are on a journey to becoming a global
leader in branded natural beverages through organic growth, innovation and strategic alliances.
Over 90 per cent of our sales today are from branded products and over 65 per cent of our Group
turnover is generated outside India. We have partnered with some of the biggest players in the
beverages category to deliver products and innovations that delight our consumers. Our strong
alliances and partnerships complement our vision of making a lasting difference in tea, coffee and
water.
Joint Ventures
1.NourishCo Beverages Ltd.
A JV between Tata Global Beverages and PepsiCo, NourishCo focuses on delivering health
and enhanced wellness through innovative ready to drink beverages. This JV is in line with Tata
Global Beverages’ ambition to grow through strategic alliances, category expansion and innova-
tion. The NourishCo portfolio now has Tata Water Plus, Tata Gluco+ and Himalayan natural min-
eral water. Drawing on the strengths of both companies, NourishCo has a pipeline of innovations
to fuel growth and create newer hydration solutions.
2. Tata Starbucks Ltd.
Tata Starbucks Ltd leverages the combined strengths of two leading beverage companies,
Starbucks Coffee Company and Tata Global Beverages, to improve the quality and profile of In-
dian coffee. The unique Starbucks Experience is brought to Indian consumers along with the trust
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and reliability of the Tata name. The stores, branded as Starbucks Coffee ‘A Tata Alliance’, are pre-
sent in Mumbai, Delhi NCR, Pune, Bengaluru, Chennai and Hyderabad with many more Star-
bucks stores planned throughout the country. In a separate sourcing and roasting agreement, Tata
Coffee sources and roasts coffee to supply to Tata Starbucks Limited and to export to Starbucks
Coffee Company.
3. Tetley Harris
In Order to broaden its product line, Tetley’s Foodservice division in the US entered into a
joint venture with Harris Freeman in 2002. With over 200 years combined expertise in tea procur-
ing and blending, this partnership is now the largest North American packer of quality tea prod-
ucts for Private Brands ranging from Black to Herbal, Specialty and Green. The joint venture also
has state of the art production facilities in Moorestown and Marietta capable of packing every
style of tea bag. Marietta and Moorestown also blend and package for Tetley & Good Earth re-
spectively.
Product/Services Profile & Target Market- Product/Services Offered by
the Company
16
Tata Tea:
Tetley Himalayan
Jemča
Grand Coffee
Vitax
Eight O’Clock Coffee
17
18
Competitors
19
1.Bisleri
5.Kingfisher
Mineral Water
2.Kinley
6.Manikchand Ox-
yrich
3.Aquafina
4.Bailey
20
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SWOT Analysis
SWOT analysis has been completed to compliment the internal and external of Himalayan
Natural Mineral Water.
Strengths :
• The sophisticated and innovative design of the bottle provides a symbol of luxury.
• The brand promotes a healthy lifestyle with water free of impurities and harmful miner-
als. Their bottles are more practical for reuse due to the sturdy glass bottle.
• Himalayan portrays as socially and environmentally-concerned image.
Weaknesses :
• The market for expensive water is very confined and is viewed as a luxury, not a neces-
sity.
• The weight and height of the bottle may inconvenience consumers and deter from con-
venience purchasing.
• The market for expensive water has the potential to be temporary due to large monetary
outlay.
• While the bottles are recyclable there is no guarantee that they will be recycled if the right
action is not taken by the consumer; 80% of the water bottles consumed worldwide do not
get recycled and instead end up in landfills.
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Opportunities :
• The introduction of flavoured water line that remains in tune with the focus on promoting
a healthy lifestyle.
• Consideration of manufacturing a larger bottle variety. The introduction of a Natural
Flowing water from the the foothills of the Shivalik range in the Himalayas which col-
lects mineral naturally on a pollution free environment.
• Rising income levels, i.e. increase in purchasing power of consumers
• Large domestic market- a population of over one billion. • Export potential
• High consumer goods spending
Threats:
• The bottled water industry is a highly competitive market.
• Competition from private-label waters has weakened sales, increasing volume growth.
• Market in Rural area is hard to attract.
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BCG Matrix of Tata Group
Question Mark
Star
Cash Cow Dogs
A. Cash cows are products which are existing since ages and which cannot be chal-
lenged in the current market conditions and have a majority market share when the
global data is referred –Tata Steel, Chemicals, Power, Salt, etc.
B. Stars are the the products whose earning capital is low but it is in growing stage
like in TATA - Tata Motor,Titan, Insurance, Hospitality, Software (TCS), Tata Global
Beverages.
C. Question mark is which has low market share in an industry which is showing
great potential and might grow at a rapid pace in the future like - Housing,
Electronics (Voltas)
D. Dogs is which has a very less Earning Potential and should be minimised like -
Communication (Docomo).
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Marketing Mix of TATA group
Let us start the Tata Group Marketing Mix:
Product:
Tata Group is one of the leading conglomerates in India. Tata Group has its presence in
several industries and has businesses in its marketing mix spread across the world. The Tata
group is into following business verticals:
• Communication & ITeS: Tata Communications, Tata Teleservices, Tata Consultancy Ser-
vices, Tata Elxsi, Tata Interactive Services
• Consumer & Retail: Tata Sky, Titan, Landmark, Infiniti Retail, Casa Decor
• Defence & Aerospace: Tata Advanced Materials, Tata Industrial Services, Tata Technolo-
gies, Tata Manufacturing Services
• Realty & Infrastructure: Tata Power, Tata Housing Development Company, Tata Consult-
ing Engineers, Tata Power Solar, Voltas
• Financial Services: Tata AIA Life Insurance, Tata AIG General Insurance, Tata Capital,
Tata Investment Corporation
• Manufacturing: Tata Chemicals, Jaguar Land Rover, Tata Steel, Tata Motors, Tata Dae-
woo Commercial Vehicle Company
• Services: Tata SIA Airlines – Vistara, Tata Services, Tata Technologies, Taj Air, TM In-
ternational Logistics, Tata Global Beverages
Price:
All companies of the Tata group function independently, under its own set or board of di-
rectors. All these companies are unique and distinct from each other. Therefore, the pricing
strategy in its marketing mix followed by all these are individual company decisions as they
are all in different industries facing different economic factors, capital, scale, etc. The Tata
group is definitely the market leader given his market share of US $ 116 billion, there it fol-
lows a differential pricing strategy to capture and maintain its market share.
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Place:
Tata group is present in more than eighty-five countries in more than six continents. The
group has grown to a huge scale globally. It has different websites for all countries. Besides
Tata group activities are also accessible on digital platform. Most of its companies are up to
date and provide services on mobile phone and hold a good presence on the internet.
Promotion:
Tata group does not promote itself directly. The independent companies sunder it promote
its brand or themselves under the individual marketing plans. Its services and consumer
products are known to employ celebrities to promote the products like that of Titan, Taj Ho-
tels, etc. Print media is also used extensively by companies like Tata Steel and Tata Motors,
even television. Companies like that of defence and consultancy are more of B2B nature,
therefore do not indulge in mass promotions.
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Share Performance & Market Capitalisation
Share price touched a high of Rs 328.75 on 15th Jan 2018
MARKET CAP (Rs CRORES)
22500
20000
17500
15000
12500
10000
7500
5000
2500
0
M A M J J A S O N D J
28
Financial Highlights for the Year
REVENUE FROM OPERATIONS higher by c.2% in underlying terms (excludes Fx impact)
• Growth led by Branded business - Improvement in India and US (change in K-cup agreement)
partially offset by underperformance in UK
• Non branded business mainly impacted by abnormal weather conditions
OPERATING PROFIT higher by 10% in underlying terms
PROFIT BEFORE EXCEPTIONAL improves by 19% in underlying terms
• Lower tea costs in India and good Cost management
• Lower finance costs and higher interest income
• Favourable impact of exits from Russia/ China and upside from Empirical Offset by
• Higher coffee and tea commodity cost in the international markets (mainly Brexit related)
• Adverse performance by non- branded business
EXCEPTIONAL ITEMS
• Includes redundancy cost for internal restructure and Russia exit offset partially by profit on
sale of EMSPL shares, China disposal and reversal of write down of assets held for sale
GROUP NET PROFIT higher by 22%
• Improved operating performance
• Lower tax charge mainly due to tax credits post US tax legislation change Offset by
• Higher exceptional items
29
Balance Sheet of Tata Global Beverages
as of march 2018
30
Cash Flow Statement
31
Income Statement
32
Organization Structure
33
Every year, Tata recognise a few Culture Champions, who form a diverse vibrant
team that works collectively to revitalise its culture, as described by the Directional
Themes. This team cuts across the traditional hierarchy and organisation structure.
While Culture Champions spark change, senior leaders support them in their initia-
tives. There are no limits and no boundaries — their roles are simply to inspire and
lead cultural innovation within our Company. A few examples of their successes in-
clude:
Consumer connect:
A programme driven to help everyone in the business build their consumer under-
standing and ensure a continued focus on our end consumer. The UK Sales and Mar-
keting team first completed the programme and found it both interesting and reward-
ing. It was then rolled out within our South Asia region and to our Operations and Fi-
nance teams.
Comfort dressing at the Bengaluru office:
was introduced with a guideline about dressing in a smart yet comfortable and casual
way. The goal is to feel comfortable at work, while living the attitude of a dynamic
organisation.
Volunteering initiative:
A UK employee-volunteering event was conducted. The project was set in the local
community to demonstrate our respect for people and the planet. Our team built a
greenhouse at a local school using 1,500 plastic bottles as a sustainability project to
'grow their own'. The volunteers spoke to children about tea and got them slurp and
spit tea, learning about Tata Global Beverages Limited in a playfully professional
way!
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