The Indian coffee and tea group says its instant coffee business continues to perform robustly, as inflationary pressures negatively impact profits across the business
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Revenue growth at Tata Coffee's Vietnamese business was driven by higher sales of premium products | Photo credit: Tata Coffee
Tata Coffee has reported a fall in net profit during its latest quarter but cited its Eight O' Clock Coffee brand and instant coffee businesses as strong performers.
Reporting on the three months ended 31 December 2022, Tata Coffee achieved Rs38.4 crore ($4.7m) profit, a 45% fall compared to Rs69.46 crore ($8.5m) in the same period in 2021.
However, sales for the quarter grew 19% to reach Rs754.76 crore ($92.5m), driven by the strong performance of the company’s Eight O' Clock Coffee brand.
Tata Coffee also highlighted revenue growth at its Vietnamese coffee business, which were driven by higher sales of premium products during the quarter, including The Sonnets — its single origin, specialty coffee range.
“The performance of our instant coffee business continues to be robust. Tata Coffee's Vietnam operations continue to be strong with a healthy order pipeline. There is, however, continuing inflationary pressure on costs and impact on instant coffee sales in some geographies. Our subsidiary, Eight O' Clock Coffee, has registered higher revenues though the profitability for the quarter has been impacted due to higher costs,” said Chacko P Thomas, Managing Director, Tata Coffee.
Tata Coffee, a subsidiary of Tata Consumer Products, operates the Eight O'Clock Coffee, Tata Coffee Grand and Sonnets by Tata Coffee retail packaged coffee brands.
The Bangalore-based company is Asia's largest integrated coffee company and India’s second largest exporter of instant coffee.
In November 2022, shareholders of Tata Consumer Products and Tata Coffee approved a reorganisation of the businesses.
The shake-up, first announced in March 2022 and still pending, will see Tata Coffee Limited’s coffee plantation business demerged into a new entity, TCPL Beverages & Foods Limited. Meanwhile, the remainder of Tata Coffee’s branded coffee business will be merged with Tata Consumer Products.