Tata Consumer scales up transformation, adopts 'One Tata' approach

Eight O'Clock Coffee to be launched next week in India

Tata Consumer Products (TCPL) is stepping up its integration exercise across all key functions as it seeks to strengthen its position in fast-moving consumer goods (FMCG). 

At the same time, the food and beverage player will harness the power of digital, pushing more products via e-commerce and direct-to-consumer (D2C) initiatives in a bid to reach new consumers quickly. 

Addressing shareholders at TCPL’s 58th annual general meeting (AGM) on Friday, Tata Sons’ and TCPL’s Chairman N Chandrasekaran (Chandra) said Eight O’Clock Coffee, a popular brand in the US from the company, would be launched in India on the D2C platform. 

The company had also sharpened its focus on its key geographies, including India, and simplified its business model by exiting several non-core markets and businesses. The firm also has capex plans of Rs 350-400 crore per year.

“We embarked on a major transformation initiative and adopted the One Tata approach at the group, simplifying our portfolio, synergising operations, and scaling up businesses through growth and consolidation. At TCPL, we made significant progress in all these areas,” Chandra said.  TCPL closed the financial year ended March 31, 2021 (FY21) with consolidated net sales of Rs 11,602 crore, a jump of 20 per cent over the previous year. While net profit in FY21 doubled to Rs 930 crore versus last year.  The growth came amid a challenging year, which saw the country go into a national lockdown due to a rise in Covid-19 cases. 

Like most FMCGs, TCPL quickly navigated the disruption, switching its attention to key products in its portfolio, using traditional trade and e-commerce to drive sales and getting its staff to work-from-home.

Raw material inflation, especially in tea, has meant that most branded tea majors, including TCPL, have had to increase prices sharply in FY21, with the trend expected to only abate now. 

The next few years will see TCPL focus its attention on new product launches, as well as targeted acquisitions to drive scale. Integration will be seen in distribution and supply chain, with digitisation of trade partners being a top priority. 

The company also proposes to use its product portfolio from tea to coffee, water, pulses, salt, spices, and snacks to tap multiple meal occasions. In FY21, for instance, Chandra told shareholders that TCPL had acquired Kottaram Agro Foods, for its millet-based products. The company’s label ‘Soulfull’ had been rebranded as ‘Tata Consumer Soulfull’ and would help push TCPLs presence in the health and wellness space. “The acquisition also opens up a significant new area in the fast-growing breakfast, snacking and mini-meal segments, enabling entry into newer consumption occasions,” he said.