Bisleri buyout by Tata Consumer Products brings strategic advantages

The buyout of Bisleri International, a brand known for its packaged water, by Tata Consumer Products, a Rs 12,425 crore entity, brings in key strategic advantages. It fits well with the existing beverage business of the buyer in one stroke.

Tata Consumer Products TCPL has a portfolio that includes tea, coffee, liquid beverages, foods and out-of-home products. The company was known as Tata Tea and then renamed to Tata Global Beverages. Its salt business was carved out of Tata Chemicals. The acquisition of Kottaram Agro Foods, the company that owns Soulfull, a breakfast cereal brand, was announced last year by TCPL.

Analysts say that TCPL has ambitions in the beverage business with their growing presence through Himalayan water, Tata copper plus water, Tata Gluco and Fruski. One of the points out that Bisleri is an iconic brand that is synonymous with the category and one that commands a lot of trust. The Bisleri distribution and innovation in the beverage segment is a plus for the business, according to the insider.

Those tracking the sector say that it is unlikely that bottled water will change until value-added beverages form a large part of the overall beverage business, and that is a challenge for bottled water in terms of low margins. Bisleri also has a small carbonated beverages business with brands such as Spycy, Fonzo, Pina Colada and Limonata, which does not necessarily complement the overall health and wellness imagery of the rest of the beverage portfolio. An analyst says it will be interesting to see how the buyer deals with this.

TCPL, a communique to the stock exchanges, said it evaluated various strategic opportunities for growth and expansion of the company's business on an ongoing basis. The management of the company remains in discussions with various parties, including Bisleri International Private Limited.