New launches at Tata Consumer Products have doubled during FY23 as compared to a year ago, with three new products launched every month on average in the first half of the fiscal. The maker of Tata Sampann, Tata Salt, and Tata Tea Gold also restructured the research and development (R&D) capabilities of its Bengaluru centre to drive further innovation.
Vikas Gupta, head of global R&D at Tata Consumer Products, said, “What we have done very systematically is future-proof the R&D and innovation infrastructure in the organization and historically we were category-focused, so we had teams aligned for tea and coffee businesses and teams looking at food businesses in a very conventional way.” But we realized as we grew in the organization that may not be the best model for us to look at. So we moved from a category-specific structure to a capability-specific structure.
Apart from its existing R&D facility in London focused on international beverages, this includes three new R&D centres established two months ago in Bangalore, Mumbai, and Sri City. The centre houses dedicated product development labs, packaging innovation labs, and a sensory science lab, enabling faster innovation and roll-out of its new products.
According to Gupta, health and wellness represent a significant opportunity, and they look at how to leverage it as a platform. The company is also investing in consumer science as well as the sensory skills of the organization and its speed to market improved significantly as it evaluates ideas through a governance mechanism that is chaired by the CEO along with the entire leadership team on a monthly basis. “That is a commitment as an organization we are driving and it has enabled the organization to move at a very agile pace where decisions are taken quickly and things move forward.”
From mainly selling tea, coffee, and salt a few years ago, the company stretched into pulses, spices, and ready-to-cook and drink product categories. The company also promotes ready-to-eat and snacking products and says it will enter newer protein-based segments. At present, innovation, or new products, accounts for 2.7% of its sales, which the company hopes to more than double in the next two to three years.
The management is confident of maintaining a 30% CAGR over the next three years, driven by entrance into new geographies, meaningful product launches, and share gains from unorganised players. The company has increased the pace of new product launches. The contribution of new products to the e-commerce platform is currently at 11%. TCPL is aiming for new product contributions to increase to 3.5% in FY2023 and to 5% in the coming years.