Singapore SGX Listed Food Empire Group Acquires 80% Stake in Brewhouse Ice Tea
Ice tea is the 3rd largest beverage category in the world, excluding bottled water. While carbonated drinks sales are slowing down globally due to shift in consumption to lower-calorie, healthier options, juices and juice-based drinks have been the major beneficiary of the shift from carbonates in India so far.
Dheeraj Jain of Redcliffe Capital
Food Empire Group, a Singapore SGX listed global FMCG company in the food and beverage space has acquired an 80% stake in Positive Food Ventures and entrepreneurial ice tea brand Brewhouse. Brewhouse was launched in May 2017 in the Delhi NCR market by former investment banker and IIM-Calcutta graduate Siddharth Jain as sole founder. The brand was backed by Dheeraj Jain of Redcliffe Capital as the largest investor prior to this transaction. The company would use the funds raised to expand manufacturing capability and take the bottled iced tea brand national.
Brewhouse ice teas are positioned in the semi-premium category as a natural and healthier beverage alternative with 40-50% fewer calories than sodas and fruit drinks. The brand is also the first to bring real-brewed tea in a bottled format in India, not relying on powdered extracts or concentrates for making the ice teas. “We’ve been absolutely focused on bringing to market a product that consumers will fall in love with, and so far, the response has been very encouraging. We brew the tea from high-quality, whole-leaf teas right before bottling to capture the natural taste and benefits of tea in the bottle”, says Siddharth Jain who led sales growth 400% in its second quarter of existence vis-à-vis the first quarter. So far, the brand has not invested in any marketing and has relied purely on word-of-mouth. It’s available in QSR chains like Burger Singh, Khan Chacha and Pita Pit apart from select modern trade outlets in Delhi and Gurgaon.
"Real-brewed & not-too-sweet ice teas are very relevant to consumers’ needs for natural and low-calorie beverages. We believe the ice tea category has the potential to reach Rs. 500-600 crore in sales in a few years, within which the low-calorie, real-brewed sub-category can reach more than Rs.100 crore sales. As the first-mover and market creator of this particular niche, we plan to capture the lion’s share of this volume." says Dheeraj Jain.
Ice tea is the 3rd largest beverage category in the world, excluding bottled water. While carbonated drinks sales are slowing down globally due to shift in consumption to lower-calorie, healthier options, juices and juice-based drinks have been the major beneficiary of the shift from carbonates in India so far. However, as juice-based drinks have a high sugar content themselves and a heavier taste profile, they are a less-than-ideal alternative, feels the management of the ice tea brand. Brewhouse fills the gap and caters to consumers who are looking to trade up but struggle to find well-branded, healthy and better-tasting alternatives in the affordable premium space. A 350ml bottle of the ice tea is priced at Rs. 60.
The Food Empire Group’s food & beverage products are sold in over 50 countries worldwide. The group enjoys a leading position in Russia and the CIS countries in the coffee premix category with its MacCoffee brand, however, this is the first direct investment into the Indian consumer product space for the group, which is headed globally by India-born Group Chief Executive and Executive Director Sudeep Nair. The Group first entered India in 2012-13 with a US$30 million greenfield investment in an instant coffee plant in Andhra Pradesh, a 100% export oriented unit which achieved operational break-even within the first two years of its operations, encouraging the Group to invest further in the Indian market.
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