Tata Consumer To Exit Tea Café Chain, Transfer Business To Indian Hotels
Tata Consumer will transfer Tata Cha to Qmin-Shops, operated by a subsidiary of Indian Hotels Co.
Nearly three years after its second attempt to open a chain of tea cafés, Tata Consumer Products Ltd. has decided to exit the venture to focus on its core consumer goods business.
The maker of Tata Tea will transfer Tata Cha — a tea café format quick-service restaurant — to Qmin-Shops, operated by a subsidiary of Indian Hotels Co., according to a company statement. The business, it said, is a “good strategic fit” for Indian Hotels and can be synergised with the Qmin brand.
“This is in line with our strategy of streamlining and simplifying our operations,” said Sunil D’Souza, managing director and chief executive officer at Tata Consumer Products. “Though it’s a relatively small venture in its current form, exiting Tata Cha will enable us to sharpen focus on our core FMCG (fast-moving consumer goods) business.”
(Image: Tata Cha website)
In 2008, the Tata group firm forayed into the café business with four beverage kiosks named Chai Unchai in Bengaluru. But that didn’t work and all four outlets, which were to become a chain of tea cafés, were shuttered within six months. Later in 2017, it introduced Tata Cha as a pilot project with the launch of three stores — all larger in size than Chai Unchai — in Bengaluru. The cafés serve not just tea and coffee but also coolers, snacks and merchandise.
Currently, Tata Cha has 12 stores across Bengaluru. It competes directly with more established tea café chains, including Sunshine Teahouse Pvt.’s Chaayos and Mountain Trail Foods Pvt.’s Chai Point.
Tata Consumer chairman N Chandrasekaran, at the company’s annual general meeting in June, had said Tata Cha was an “experiment and currently there’s no definitive plan to scale this up”.
The company is already operating Tata Starbucks, a 50-50 joint venture since 2021, with 233 stores in 19 cities. The aim is to open at least 40-50 outlets this year and foray into new cities.
Tata Starbucks, the company said, recorded revenue growth of 128% over the preceding year in the quarter ended September on a relatively low base of last year that was impacted by reduced mobility. Revenue grew 23% when indexed to the same period in FY20.