Tata Consumer Products has been witnessing strong growth in its food business and margin gains in the beverage/international business, leading to new all-time highs in its stock. The company’s consolidated sales for the July-September quarter (Q2) increased by 11% over the year-ago quarter, driven by robust performance in the India food business and the NourishCo segment.
To further enhance its growth trajectory, Tata Consumer Products is venturing into new segments such as Sampann (packaged staples), Soulfull (healthy snacks/drinks), and NourishCo. These growth segments are expected to account for 15% of the company’s India branded business sales in 2022-23, with an estimated increase to 20% in 2023-24. The company anticipates a 30-40% annual growth rate in these new businesses.
Expansion into Packaged Staples and Healthy Snacks/Drinks
Tata Consumer Products aims to capture the growing demand for packaged staples and healthy snacks/drinks through its Sampann and Soulfull brands. Sampann offers a range of high-quality packaged staples, catering to the evolving needs of health-conscious consumers. The brand focuses on providing nutritious and convenient food options, ensuring the highest standards of quality and taste. Soulfull, on the other hand, offers a variety of healthy snacks and drinks made from natural ingredients. With a focus on sustainability and wellness, Soulfull aims to provide consumers with guilt-free indulgence options that align with their health goals.
NourishCo, a joint venture between Tata Consumer Products and PepsiCo, is another key growth driver for the company. The segment witnessed a 25% rise in the energy drink portfolio during the Q2, reflecting the increasing demand for healthier beverage options. NourishCo’s portfolio includes brands like Himalayan mineral water, Tata Gluco Plus, and Tata Water Plus.
By leveraging the strength of its distribution network and brand equity, Tata Consumer Products aims to expand the reach of NourishCo’s products and capitalise on the growing demand for functional and healthy beverages.
RTM Watch’s Take
Tata Consumer Products’ strategic focus on new businesses is a testament to its commitment to innovation and growth. By diversifying its product portfolio and tapping into emerging market trends, the company is well-positioned to capture a larger share of the FMCG market. The expansion into packaged staples, healthy snacks/drinks, and the continued growth of NourishCo will not only drive revenue growth but also cater to the evolving needs of health-conscious consumers. With a strong distribution network and a portfolio of trusted brands, Tata Consumer Products is poised to capitalise on the growing demand for healthier and more sustainable food and beverage options. As the company continues to invest in research and development, marketing initiatives, and distribution capabilities, it is likely to maintain its growth momentum and deliver value to its shareholders.
