Tata Global Beverages, which has entered the branded instant coffee business under Tata CoffeeBSE 0.63 % Grand, will source beans from its plantations in South India and use the company's tea network to market the product.

After leveraging Tata Tea's position as a market leader in the domestic market, the company has taken a strategic step to enter the branded coffee space in India, TGBL said in a statement.

"The coffee beans will be sourced from Tata Coffee's own plantations in South India, and the product will be priced competitively in the market," Regional President (India) of Tata Global Beverages Ltd (TGBL) Sushant Dash told reporters here.

A 50 gram jar of coffee will cost Rs 130 in the north, east and western regions, while the pack will be priced about 7-8 per cent lower in the southern markets in line with competition, he added.

"The southern region, which accounts for 80 per cent of the coffee consumption in the country is a more mature market with more competition and unorganised players and the company will use its extensive distribution network for tea to retail its coffee across the country," the Regional President said, justifying the pricing strategy.

The coffee category in India is poised to grow in the coming years and is estimated at Rs 2,500 crore, out of which Rs 1,300 crore is the instant coffee market, he informed.

He further indicated about the scope of overall instant coffee segment to grow and said "this is very small compared to the more mature tea markets which currently stand at Rs 20,000 crore."

Tata Coffee Grand was jointly developed for the domestic market with its subsidiary company Tata Global Beverages Ltd (TGBL).

This is the first retail initiative of instant coffee for TGBL, which primarily operated in the business-to-business segment so far.

Besides, Tata Coffee Grand include Tata Tea, Tetley, Himalayan natural mineral water, Good Earth Tea, among others, while Tata Coffee retails a packaged coffee powder called Mr Bean in the southern markets.
 
The annual turnover of TGBL is USD 1.4 billion, employing around 3,000 people globally.