Tata Consumer ‘narrows its universe’; identifies 5 core areas for launches
Packaged goods company Tata Consumer Products (TCPL) has “narrowed its universe” by identifying five key categories for its upcoming product launches. These categories represent its current core offerings, including tea, coffee, and salt.
Within the pantry segment, the company will explore opportunities in pulses, spices, staples, dry fruits, and ready-to-cook.
In the liquids category, the company plans to introduce new products in the water and ready-to-drink sectors.
The mini-meals category will see TCPL expandings its offerings in the breakfast cereal, ready-to-eat, and snack markets, along with its protein platform, which includes plant-based meat and plant protein powders.
Ajit Krishnakumar, chief operating officer, TCPL, explained the rationale behind this strategic approach in an interview with Business Standard. He said, “This framework enables us to develop a targeted understanding of our consumers, enhance our internal capabilities, innovate within established parameters, expand our total addressable market, and tap into new consumption occasions.”
He further added, “We have taken a strategic approach to identifying key platforms we want to play in. After evaluating several factors, including market opportunity, category growth, profitability, our capabilities, including distribution and research and development, and our overall competitive edge, we’ve narrowed the universe down to five key platforms.”
TCPL currently derives 5 per cent of its sales from innovation, and Krishnakumar said that the company achieved this target earlier than anticipated due to its active efforts in launching products.
When considering acquisitions, the company adopts a specific perspective that includes financial viability. The company also assesses whether the acquisition can complement its existing operations and if it can extract value by integrating it into its distribution network. Also, the company evaluates whether the acquisition aligns with its production and delivery systems.
Krishnakumar said that the primary focus for acquisitions will be the Indian market, explaining, “Our primary interest is India because we get the maximum value given our established brands, strength, reputation, and distribution, among other strengths.”
He also acknowledged the significance of the international market in the company’s overall portfolio but emphasised that it would not grow at the same pace as the Indian market.
Last week, Tata Group’s consumer arm made headlines for expressing interest in acquiring a majority stake in Haldiram’s Snacks, a prominent player in the ethnic packaged foods sector. However, in a stock exchange filing, the company clarified that it is not currently engaged in acquisition negotiations and added that it regularly evaluates various strategic growth and expansion opportunities.
Bain Capital declined to comment, and Haldiram’s denied that the company was up for sale.
Last year, Tata Consumer Products was also in discussions to acquire a majority stake in packaged drinking water major Bisleri. However, the deal fell through, with sources indicating that high valuations were a contributing factor.