INDIA – Tata Consumer Products Limited, the non-alcoholic beverages subsidiary of Tata Group has agreed to acquire PepsiCo’s stake in NourishCo Beverages Limited, a 50:50 joint venture between the two companies.
The move follows the companies’ prior announcement, in January this year, an agreement to revise their engagement terms in NourishCo Beverages. Pepisco and Tata Consumer Products (formerly Tata Global Beverages) formed NourishCo in 2010 to sell products in the non-carbonated ready-to-drink hydration space.
The key triggers for the revision included the Tata’s move to become a larger player in the food and beverages space that could include it stepping into PepsiCo’s space as well as PepsiCo India’s position in the space after selling its bottling operations to the Ravi Jaipuria group.
In May last year, Tata Group had announced consolidation of all its consumer products business with all branded food businesses of Tata Chemicals. This saw all of Tata’s packaged spices, pulses and salt being merged into Tata Global Beverages in an all-stock deal and thereafter renamed as Tata Consumer Products Limited.
Tata Consumer Products now plans to expand the food and beverages business that currently includes tea, coffee and water. The company confirmed in a filing to the stock exchange that the agreement to buy PepsiCo’s stake in NourishCo would enable it to widen its portfolio in the food and beverages space.
“This decision has been made after extensive deliberation between the JV partners and we feel this will bring in greater focus to the NourishCo Business,” Sunil D’Souza, MD & CEO, Tata Consumer Products, said in a statement.
“The liquid beverages category has exciting growth potential and this move will help us strengthen and widen our presence in it. Over the years, NourishCo has built a capable team and a network of distributors, co-packers and vendors. We will look to scale up these capabilities further and build a differentiated position in this segment.”
According to a Livemint report, Tata Consumer Products said that it intends to gradually use its sizeable resources, the capabilities acquired and the brands it now has, to propel its ambition in the value added liquid refreshment beverages space in India.