Chandrasekaran on how Tata Consumer plans to be a formidable FMCG player

Tata Consumer Products (TCPL) has completed the integration of its India food and beverages business and is now well-positioned for accelerated growth by putting in place the right building blocks for the future, its chairman N Chandrasekaran said.

The Tata group firm has enhanced its product portfolio through "targeted acquisitions" as it aspires to be a formidable player in the FMCG category, said Chandrasekaran, who is also the chairman of Tata Sons.

Besides, it has stepped up the pace of innovation across markets in line with consumer trends such as health and wellness and convenience, he said in his message to shareholders in the latest annual report of TCPL.

"In line with our ambition to become a formidable player in the FMCG industry, Tata Consumer embarked on a transformation journey and we made significant progress despite the pandemic.

"As a first step, the integration of the India Foods and Beverages business has been substantially completed and we have started to see synergy benefits from this integration," he said.

In the international markets, TCPL -- earlier known as Tata Global Beverages Ltd -- has divested stake in non-core businesses to enable greater focus on core branded businesses.

"We now have a portfolio which covers tea, coffee, water, salt, pulses, spices, ready-to-cook offerings, breakfast cereals, snacks, and mini-meals.

"We have also stepped up the pace of innovation across markets in line with consumer trends such as health and wellness and convenience," said Chandrasekaran.

In FY21, TCPL has delivered robust broad-based growth across all its businesses and strong financial performance across all matrices, despite a challenging operating environment, he noted.

"Importantly, we have focused on putting in place the right building blocks for the future.

"These include identifying our strategic priorities, implementing an integrated organisation structure, investing in capabilities and talent, and driving digital to name a few," Chandrasekaran added.

He further said, "With these building blocks in place, Tata Consumer is well-positioned for accelerated growth."

TCPL has expanded distribution and enhanced focus on premiumisation, leading to robust outcomes in the core portfolio, TCPL MD and CEO Sunil D'Souza said.

"A major component of the integration was the redesign of our sales and distribution architecture and network in India.

"This has led to substantial enhancement of our reach.

"While we rationalised our distributors, we added (+) 30 per cent feet on the street in the system and our direct outlet coverage has gone up by 30 per cent and numeric distribution increased by 15 per cent," he said.

It is now focused on increasing its rural reach for which it now has 3X the number of territory sales officers and has already added 2,000+ rural distributors.

"We now have a strong foundation and will build on it to accelerate our growth momentum.

"We will continue to focus on our strategy and remain nimble enough to adapt to the evolving operating environment," he said.

However, D'Souza added that the macroeconomic environment is "challenging" and this may lead the company to "recalibrate some of our plans".

In February this year, TCPL had announced acquiring Bengaluru-based Kottaram Agro Foods, which is primarily engaged in the business of healthy breakfast cereals and millet-based snacks.

TCPL, which own brands such as Tata Tea, Tetley, Tata Salt, Tata Sampann, Eight O' Clock Coffee and Himalayan Water -- had last year also acquired beverage major PepsiCo's stake in NourishCo Beverages to build a strong play in the packaged beverages market.

"The FMCG ambition was bolstered through two strategic acquisitions in India -- Soulfull and NourishCo, which helped create a much wider portfolio," said D'Souza.

It has also divested non-branded businesses in Australia (MAP out-of-home coffee) and food-service business in US (membership interest in Empirical Group LLC and Southern Tea LLC).

After merging the consumer products business of Tata Chemicals with Tata Global Beverages, the company was renamed as TCPL.

TCPL has reported a consolidated revenue from operations of Rs 11,602.03 crore for FY21.