Tata Consumer has acknowledged five key platforms to expand its total addressable market and that the company’s top priority is to strengthen existing businesses and expand into food and beverage adjacencies.
Sunil D’Souza, managing director, TCPL, said, “After evaluating several factors, including market opportunity, profitability, and our overall competitive edge, we’ve narrowed the universe down to five key platforms: current core (tea, coffee, salt), pantry (pulses, spices, staples, dry fruits), liquids (water, ready-to-drink), mini meals (breakfast cereals, ready-to-eat, snacks), and protein (plant-based meat, plant protein powder).”
Tata Consumer has planned to take the inorganic route where necessary to acquire capabilities they do not possess or need to develop quickly, as long as they meet strategic and financial filters and align with long-term objectives.
“The macro environment was indeed challenging due to geopolitical tensions, decadal-high inflation hurting demand and consumer choices, monetary tightening, and rising interest rates, which impact the global economy,” D’Souza said.
The company reported a net profit of Rs. 268 crores for the quarter ended March 2023, an increase of 23% over the previous year. Revenue from operations was up 14% year-on-year to Rs. 3,619 crores. Noting that “market disruption is the new norm”, the company cited key trends such as digital marketing, e-commerce, direct-to-consumer (D2C) brands, and changes in consumption patterns, which were creating new opportunities while also reshaping the structure of the FMCG sector.
India’s packaged goods sector recovered with double-digit value growth of 10.2% in the January-March 2023 quarter, faster than the previous quarter when the sector grew at 7.6%, research firm NielsenIQ said in its quarterly sector update.
At an all-India level, food continued to see higher consumption growth, up to 4.3% in the first quarter from 1.6% in the last quarter of the previous fiscal, with staples driving this uptick. The research firm forecast that the FMCG market would grow 7%–9% for the full year 2023.
During the year, Tata Consumer said it increased its direct distribution by 15% and has a current direct reach of 1.5 million outlets and the infrastructure to launch 200 new products annually. The focus will be on strategic initiatives such as expanding distribution networks, accelerating growth through portfolio expansion, and putting a strong focus on innovation. It was noted that Tata Consumer’s proposed merger with Tata Coffee Limited, aimed at creating a simpler organizational structure and unlocking synergies, is expected to be completed in 2023.