Nothing in this century has grabbed our collective attention heightened anxiety and upended our lives like the Covid pandemic that's still raging and affected more than 10 million people as this Annual Report goes to digital print. Our consumers employees suppliers and other stakeholders have all been affected in ways we still don't fully appreciate. In all our major markets including the US UK Germany and India the virus has struck hard taken lives destroyed jobs and created a challenging future for millions.
We dedicate this year's Annual Report to the memory of more than 500000 who have lost their lives to Covid and we wish those still afflicted a speedy recovery.
For a lot of us the future is both uncertain and challenging. However before I go into what the post-Covid world can look like for your company let's briefly review our performance for the year gone by. By any reckoning this has been a very satisfactory year.
Here are some quick highlights:
Your company grew 28% over last year by adding a record INR 1 billion to end the year with INR 4.55 billion in net revenues
Profits after tax grew even faster (36%) at INR 409 million representing 9% of revenues
The uninterrupted growth in both exports (27%) and the domestic business (26%) continued through this year as well
In the consumer business both branded (17%) and private label (62%) saw healthy growth
In our largest market the US all categories including entrees and rice saw double digit consumption growth. Velocity and points of distribution both grew in all three segments of club grocery and natural channels. For yet another year online sales growth outpaced all channels
Organic Madras Lentils was introduced in club stores in the US and was received enthusiastically by our consumers
Tasty Bite saw successful launches in new markets UK and Germany. The product has been well received in both markets
TFS (Tasty Bite Food Service) witnessed a robust 26% growth during the year with sauces growing almost 44%
Our frozen business faced headwinds and remained flat as some of our customers reduced their plant-based offerings in a move counterintuitive to megatrends
`TastyBite Xclusive' our domestic HoReCa initiative was rolled out during the year in test markets Bangalore and Mumbai. These are early days and we remain hopeful
We added INR 235 million to our fixed assets for new capacity and infrastructure.
Preparing for new reality:
We know that some things in the post-pandemic world will change forever but not all for the worse. Governments industry and consumers will each recalibrate in some fundamental ways. All of these will have a profound influence on our industry and on your company. However I believe Tasty Bite will continue to evolve for the better and do its part to stay mission aligned to build a socially responsible company that will provide consumer delight.
The pandemic is teaching humans many lessons as many as the number of people who've succumbed to it. We have learnt lessons that are global regional and extremely personal. Let's examine all three.
The Global Environment:
Very simply we have plundered the surface of the earth the air above and the crust below. Every year on an average we deforest 70 million acres globally. That's about the size of Maharashtra! We emitted a record 37 billion tons of carbon dioxide last year. That's almost 20 times the weight of all the cars on the road globally. We drill relentlessly and oil production alone at 100 million barrels / day is 5 billion tons annually. That is more than double the quantity of food grains we produce every year!
The consequences of these are plentiful. Let me name just a few: pandemics by releasing viruses & bacteria that belong inside forests extinction of thousands of species annually upsetting our ecosystem conversion of agricultural land for animal feeds increasing hunger & malnourishment and endangering public health.
Covid might succeed in doing what the environmentalists and the Paris accord have failed to achieve a change in human behavior.
Atmanirbharata (or self-reliance) has suddenly become an imperative for all nations reversing decades of progress in globalization. Nowhere will this be more pronounced and more regional than in the area of food security. Governments industry and consumers will pull in different directions making concerted progress challenging.
Governments will continue to dip into their coffers through short term stimulus packages support local small & large businesses to protect jobs and increase regulations and erect tariff & non-tariff barriers to global food and agriculture trade. Such protectionism may threaten global regional and even bilateral trade agreements underlining the belief that countries can localize their way out of this socio-economic crisis.
Industry and particularly the food sector has been affected in very different ways depending on the country and the segment they are in. Farmers traders processors transporters restaurants wholesalers distributors retailers are each confronting difficult everyday choices even as they know that some changes they have made are likely to be more permanent. Companies are asking fundamental questions about their business model many will reconfigure their supply chains renegotiate contracts and struggle to hold on to their consumers all the time wondering how to deal with the changing demands of their stakeholders. We will witness not just a change in strategy but a shift in corporate missions as well.
Consumers too have faced a new reality. Maintaining a social distance that is unnatural to humankind working from home terrified of the virus and yet discovering a quieter cleaner and healthier planet has given us all time to pause. We may have transformed in some fundamental ways. From profligate spenders to savers polluters to cleansers mere consumers to producers at home physical to digital and magically from indifference to engagement.
All of these changes will have a profound effect on the food industry globally and on your company. While it is impossible to predict specific changes a few megatrends that were already visible will accelerate threatening some businesses while offering huge opportunities to others. Three of them in particular are relevant for Tasty Bite:
1. Heightened awareness of the correlation between food and wellness. These last few months have seen a dramatic increase in both in-home dining and cooking. These new food habits may have made us healthier even as we reel under the raging Covid epidemic. This is a major behavioral change and will result in us simultaneously competing and collaborating with our consumers.
2. Plant based natural foods will see explosive growth. The drivers of this change are visible all around us. Fear of processed meats heightened sensitivity to animal cruelty increasing knowledge of the goodness in plants and the recent growth in plant - based meat alternatives
3. De globalization will change food habits. Concerns for public health and climate change combined with government stimulus will drive the local movement which in turn will drive a change in food habits. Global logistics will yield some ground to shorter supply chains. The palate will shift to healthier prepared but less processed foods.
It'll be a bumpy road but I am deeply confident that your company is poised to emerge stronger in the long run despite these turbulent times. Historically Tasty Bite's growth has been anchored in a culture of innovation. This has not been only through new product and process development but through constantly reimagining a better way to deliver on the promise of our mission statement that we will build a socially responsible organization that will provide consumer delight. This philosophy is deeply embedded in the DNA of the organization and empowers all who work here.
Our parent company Mars Incorporated not only shares this vision but has been like a rock through these months providing unstinting support and cheerleading us through these very stressful times. The employees at Tasty Bite across the length and breadth of the company continue to inspire with their dedication competence and have been nothing less than spectacular.
This year's annual report explores Innovation across all functions in the company and its role in providing stability flexibility and in designing a new future. Enjoy the ride but keep your seat belts on. Welcome to a new beginning.
Chairman DIN: 00575574