Tata Consumer Products bullish on growth prospects

Tata Consumer Products Ltd (TCPL) is looking to widen its product basket and expand distribution network to strengthen its position across the three segments of in-the-kitchen, on-the-table and on-the-go.

Responding to a shareholder's query at the first e-AGM (annual general meeting) on the possibility of the roll-out of prebiotic, probiotic and other such segments, including ready to eat, N Chandrasekaran, Chairman, Tata Group, said, "We are looking at the entire portfolio....we will definitely be getting into more adjacent products and strengthen our distribution."

When asked about the possibility of expanding its product portfolio into atta, suji and maida under the brand Tata Sampann, he said, the different options would be studied and looked into at an opportune time.

Meanwhile, TCPL's MD & CEO, Sunil D'Souza said that the company would build on its third pillar - Tata Sampann - with a more robust portfolio of pulses and spices.

"We will build on our core business and look to unlock synergies both in costs and revenues. We will explore new opportunities (for growth), both organic and inorganic," he said.

Growing market

As per the company's FY20 annual report, India’s food and beverage consumption in 2019 is estimated at close to ₹30 lakh crores. The ‘in-the-kitchen’ segment, comprising staples, spices and condiments, dairy and others, accounts for nearly 70 per cent of the food and beverage basket (approximately ₹21 lakh crore).

However, the share of organised players in this segment is less than 10 per cent and remains largely untapped.

The other segments, ‘on-the-table’ (comprising spreads, sauces and others) and ‘on-the-go’ (involving snacks, ready-to-eat options and others) have traditionally seen a larger play by organised players, but their offerings are skewed towards indulgent snacking products. However, the industry is currently witnessing a shift in consumer preferences, with demand for healthier, better quality and more affordable food and drink options growing across all the three segments.

"Rising affluence of Indian households will lead to premiumisation and higher demand for products that are healthy, provide well-being and are convenient to use," the report said.

Talking about the demand situation at present given the economic slowdown in the wake of the Covid-19 pandemic, Chandrasekaran said that the demand was holding and in fact in specificmarkets, the demand was higher than usual as people were stacking packaged categories of food.

"I am expecting a good growth and performance of the company moving forward," he said.