Tata Consumer is looking for a partnership in retail outlets of Cafe Coffee Day.
As per the analysis it is being said that a partnership with Café Coffee Day’s outlets will give Tata’s Starbucks a chance to gain accessibility on premium and mass selling retail platforms for both the coffee and tea.
Tata Consumer Products is planning to hold a strategic stake in CCD’s retail outkets. This decision has been eyed upon to because it offers a good synergy with Tata Starbucks due to its branded tea and coffee business.
As per a report in the ET, the Tata Group strategizing for all the portfolios of CCD which include outlets, plantations and the vending machine business for establishing synergies. The only obstacle taking place is the legal complexities which is arising due to debt entanglements and deals post the untimely death of CCD former promoter. The possibilities of these portfolios are very high but the only constraint being evaluated by the management of TATA Group Is the legal complexities involved in the same.
However, the company declined to comment. “The company always evaluates various opportunities in an ongoing basis,” A Tata Consumer’s while responding to that publication’s mail asking for comments mentions that As a policy, we do not comment on speculative information.”
The analysts believe that partnering with CCD for its outlets present all over the country will provide Tata Starbucks an access to premium and mass retailing platform for both coffee and tea. Tata Starbucks has a total of 185 stores spread across 11 Indian cities is actually an equal joint venture of Tata Consumer along with Starbucks Corporation. Recently, it has accounted a 21% growth in FY2020.
The business daily mentioned that Coffee Day is also taking into consideration all the financial and strategic partnerships in respect to its retail outlets as a matter of restructuring the business in an addition to its busines of vending machines.
According to an earlier ET report, Coffee Day has set a price tag of Rs 2,000 crore for its vending machine business, for which TCPL is likely to offer an amount of Rs 1,000 crores. Across all its stores present in the country, CCD has a total of 60,000 vending machines.
As per an investigation conducted for the sudden death of Mr. VG Siddhartha, former promoter of Coffee Day Group it was revealed that an amount of Rs 3,535 crores was drawn off from the company by the promoter’s personal firms. Coffee Day Enterprise Ltd. Is selling its assets to overcome a debt of Rs. 7200 crores. Currently, the debt burden of the company has been reduced to Rs 3,200 crores and will be reduced in the future too.
It must be stated here that with the introduction of new management team being headed by Mr. Sunil D’Souza, Tata Consumer is eyeing itself in reinventing the company as an FMCG company. As per a publication the company’s profile demands strong or powerful brands and scale to power itself in this competitive market. The inorganic route is the best way forward to growth,” the publication quoted a company official as saying.