INTERNATIONAL AGRI-BUSINESS MANAGEMENT INSTITUTE

ANAND AGRICULTURAL UNIVERSITY, ANAND – 388110

Name: Gohil Tarunkumar K Advisor:

Reg. no.: 2040619009 Dr. Y. A. Lad
IABMI, AAU, Anand Associate Professor & Head,
Date: 03/03/2021 IABMI, AAU, Anand

SYNOPSIS

Market Entry Strategy for Grufet Foods Inc. in Gujarat

• Introduction
Tea is not a simply beverage in India. It is a staple beverage. Indians are
preferring it regular because of its energy boosting characteristic. Tea is the world’s
second most consumed beverage after water. The reason behind this is to lowest cost
and affordable to everyone in the world. Tea industry are organized and labour driven
industry. The Tea industry make good contribution in Indian economy.
World Coffee consumption and popularity is increasing, in non-traditional
markets. Coffee is primary caffeine provider for world, followed by tea and soft drinks.
Total 2.5 billion cups are drunk everyday (Alpha Invesco). Coffee provides livelihoods
for millions of dozens of countries people. Due to healthiness and protective against
many chronic diseases like characteristic of coffee, it should be a clear priority sector.

Global Tea Industry:

Globally tea is grown in more than 35 countries, from them top 7 countries
contributed 90% of the total world tea production. In the world, tea production and
consumption saw the strong and steady growth over the time. World tea production
reached 3848 million kilograms in 2019. With 2700 million kilograms production china
stand at first place and with 1390 million kilograms production India at second highest
producer of tea. India accounts for 36% of the world tea production. Total 1895 million
kilograms of tea was exported worldwide in 2019. The Kenya was the biggest exporter
with accounted 20% of world export. India contributed 13.29% in the world tea export.
(Source: Tea Board of India,2020)

India Tea Industry:

 The Indian tea industry many changes occurs over a period. It is about 180 years
old and integral place in the economy. At present, India is the second largest producer
in the world. As per the Tea Board of India, the tea was produced 1181.7 million
kilograms upto November 2020 and 371.9 million kilograms of tea export upto
September 2020 from India. Apart from the production, India is also the largest
consumer of tea in the world. The tea drinking population was around 64% of the total
population of India. It consumed 80% of the produce. The India tea consumption in per
capita 0.780 kilograms. Gujarat is the biggest consumer of tea as per the study of Tea
Board of India. The India tea segment revenue was accounted US$ 15,820.2 million
and projected to reach US$ 17,589.9 million in 2021. The market is expected to grow
annually by 5.8% during 2021-2025(Statista, 2020).

Global Coffee Industry:

As per the International Coffee Organization, in 2020-21global production is

estimated to rise by 1.9% to 171.9 million bags. Also, the world coffee consumption is
projected to increase 1.3% to 166.63 million bags in 2020-21. Globally coffee market
was valued USD 102.15 Billion in 2019 approximately and expected to reach revenue
worth USD 155.64 Billion by 2026 with the CAGR of 6.2% over the period from 2020
to 2026 (Business wire). In relation to total population figures, per person revenues of
US$57.89 will be generated in 2021. The average per capita consumption will stand at
1.0 kg in 2021 (Statista).

India Coffee Industry:

India is the 6th largest producer of coffee in the world and 5th exporter. It
accounted 3.14 % of the global production in 2018-19. The India export stood at US$
836.85 million in 2018-19. India exported 70 % of the total coffee production and 30%
consumed domestically (Indian Trade Portal). Indian is a tea drinking nation, but coffee
has become an increasingly popular drink in twentieth century. Urban Coffee
consumption was accounted 73% of total volume, the remaining 27% in rural
consumption (COFFEEBI).

Major Brands of Tea & Coffee

Tea Brands Coffee Brands

• Wagh Bakri • BRU

 • Nescafe
• Lipton
• Tata Coffee
• Girnar
• Café Coffee day
• Tata Tea
• Davidoff
• Brooke Bond
• Lavnzza
• Tulsi Green Tea
• Continental
• Tetley Tea
• Barista
• Organic India
• Le Cafe
• Jivraj
• House of Coffee
• Apsara
• D’aromas
• Himalaya Green Tea
• Girnar
• Society
• Wagh Bakri
• Vestige Zeta Tea
• Jivraj
• Fresh & Pure

• Review of Literature:
Blees, et. Al (2003), present report on barriers to entry. The report concluded,
there were 37 barriers founded to entry in market. 15 out of 37 barriers in total are either
related to the size of the entrant or to their financial position. The greater part of these
boundaries can't be impacted at the moment of entry, or must be affected by major
player. Governments that need to animate business and rivalry by new passage into
enterprises should consider that specific underlying and strategic barriers must be
impacted over the long run, through broad rivalry strategies, and not in the short run.
Mishra (2008), study conducted on FMCG Distribution Channels in India. That
study show four type of distribution channel was prevalent in the India. The channel A
was firms ship products from their manufacturing facilities to stock keeping unit to
wholesalers and to retail or kirana stores. Another was channel A2 which eliminate the
wholesaler and channel A3 which appointed the rural wholesalers for the distribution
to the village shop. Apart from those channels one more channel show in India, in which
the FMCG firm works with the NGO’s and local entrepreneurs to stock and sell their
products.
Khanna (2012), study conducted on “Market Study of Waghbakri Tea” was
taken up with the goal to survey the current market and the competitors and look at
 them dependent on product, price and promotion just as expected market for tea. The
study summarises, the organisation realises their strengths and weaknesses by the study
of competitor and their marketing mix.
ICRA (2018), present report on Girnar Food & Beverages Private Limited
which show that, high passage obstructions in the packaged tea business because of
local inclination for various tastes, mixes and flavours. Due to territorial inclination of
various tastes/mixes/flavours set up throughout the long term, the section boundaries
for the new parts in the packaged tea business stays high requiring a high notice,
showcasing and limited time cost to draw in end-clients to changes in its preferences
inclination.
• Company Profile:

Name of Company: Grufet Foods Private Limited

Industry: Food & Beverages

Headquarters: Gurgaon, Haryana

Type: Privately Held

Established: January, 2019

Specialties: Food & Beverages, Tea, Coffee, Wines & Spirits, Juices, Spices, and
Vegetable Oils

Grufèt is a privately-owned Indian company that operates worldwide and is

known for its luxurious Tea, Coffee and Chocolates. Established as a premium food
and beverage company. Grufèt's mission is to provide best food and beverage products
to consumers across the globe.

• Objective:
✓ Competitor analysis of Tea & Coffee in the Gujarat market
✓ To find out existing distribution channels prevalent in Gujarat market
✓ To find out distribution channels partners for tea and coffee in Ahmedabad and
Vadodara market
✓ Analyse market entry barriers for Tea and Coffee segment in Gujarat market
• Research Methodology:
 The research includes, interviewing of respondents by means of semi-structured
schedule based on the mentioned objectives and analysing their response with the help
of statistical tools.
Source of data: Primary data and Secondary data to be collected to meet the stipulated
objectives of the study.

Primary Data: It is to be collected from the respondents with the help of Semi-structured
Schedule.

Secondary Data: It is to collected from literature, private and government publications

and web sources.

• Research Design:

Type of Research Exploratory Research

Sampling Method Non-Probability
Sampling Technique Convenience Sampling
Sample Unit Distributor
Sample Size 100
Sample Area Ahmedabad and Vadodara
Research Instrument Semi-structured Schedule
Analytical Tool Tabular, Graphical, Percentage

• References:
✓ Blees, J., Kemp, R., Maas, J., and Mosselman, M., (2003), ‘Barriers to Entry’,
SCientific AnaLysis of Entrepreneurship and SMEs (Report No. H200301).
https://core.ac.uk/download/pdf/7074647.pdf
✓ ICRA (2018). ‘Girnar Food & Beverages Private Limited’, Gurgaon.
https://www.icra.in/Rationale/ShowRationaleReport?Id=68443
✓ Khanna, V. (2012). ‘Market Study of Waghbakri Tea’, Summer Training Report,
International Agribusiness Management Institute, Anand Agricultural University,
Anand.
✓ Mishra, D. (2008). ‘FMCG Distribution Channels in India: Challenges and
Opportunities for Manufacturers and Retailers’, The Journal of Global Business, 2(2),
175-182.
✓ Tea Board of India,2020 http://www.teaboard.gov.in/
✓ https://www.alphainvesco.com/blog/overview-indian-coffee-sector/
✓ https://www.grufet.com/
✓ https://www.statista.com/statistics/870829/india-consumption-volume-of-
tea/#:~:text=The%20consumption%20volume%20of%20tea,increased%20consistentl
y%20throughout%20the%20years.&text=India%20was%20the%20second%20largest
,in%20the%20world%20after%20China.
✓ https://coffeebi.com/
✓ https://www.statista.com/statistics/292595/global-coffee-consumption/