Limited options for Tata Tea in US beverages mkt

KOLKATA: Post stake-sale in Energy Brands Inc, Tata Tea has two options to build volumes in the ultra-competitive US beverages market. The company either has to acquire sizeable space in the fast-growing energy drinks segment or in the speciality/herbal tea space, which is gaining popularity in health-conscious America.

Energy drinks had taken the US beverage market by storm in 2006, outperforming most other beverage categories. Although carbonated soft drinks still dominate the US market, sales of energy drinks shot up by nearly 50% last year. Analysts indicated that Coca-Cola’s decision to buy Energy Brands is largely driven by this trend.

Beverage market experts told ET: “Beverages offering functional benefits are growing two-to-three times faster than conventional refereshment beverages. As consumers increase their per capita consumption of beverages in these newer segments, they are putting pressure on carbonated soft drinks and juices. These drinks are more successfully tapping into the spirit of the age, which is charaterised by a greater emphasis on functional, healthy products.