Tata Consumer Products to roll out sustainable products, says chairman

Tata Consumer Products to roll out sustainable products, says chairman

Informist, Tuesday, Jun 6, 2023


--Tata Consumer: Consolidating JV ownerships in S Africa, Bangladesh

--Tata Consumer MD, CEO: India FY23 foods ops revenue up 26%

--Tata Consumer MD, CEO: India beverage ops revenue rose 1% in FY23

--Tata Consumer: Sales ratio improved to 3.4% in FY23

--Tata Consumer: Expect to complete Tata Coffee merger this year

--Tata Consumer: FY23 margin hit by commodity inflation, FX volatility

--Tata Consumer: Starbucks opened record stores in a year in FY23

--Tata Consumer: Expanded portfolio to include new product categories

--Tata Consumer chairman: Product launches doubled on year in FY23

--Context: Tata Consumer chairman speaking at co's 60th AGM

--Tata Consumer: Global mkts hit by volatile macro-econ conditions

--Tata Consumer: Distribution network trebled FY23 to 1.5 mln outlets

--Tata Consumer chairman: Continue to strengthen core business


KOLKATA – Taking forward its portfolio premiumisation drive, which yields better revenue and margins, Tata Consumer Products Ltd is working on rolling out sustainable products in the coming days while also focusing on strengthening its core business, Chairman N. Chandrasekaran said at the company's 60th annual general meeting.


Sustainable products are usually priced higher and are marketed as premium products. These also yield higher margins. "We are building sustainability (in sourcing) chains to launch sustainable products," Chandrasekaran said in his opening remarks.


In its annual report for 2022-23 (Apr-Mar), Tata Consumer Products said that 55% of the inputs used by the foods and beverages major were sourced sustainably during the financial year. The company is committed to sourcing tea, coffee, water and food offerings sustainably, ensuring its products are produced in an economically, environmentally, and socially just manner, the report added.


Tata Consumer Products is also one of the founding members of the Ethical Tea Partnership, a non-profit collaboration of tea companies dedicated to improving the lives of tea workers and their surroundings in order to create a thriving tea industry that is both socially and environmentally sustainable.


Notably, export markets such as the European Union, the US, Japan and other countries stress on sustainable and organic products and are averse to products that lack certifications on food safety, quality and sustainability. This has led companies such as Goodricke to opt for Rainforest Alliance certification for its tea gardens in Darjeeling to continue with exports. Rainforest Alliance is an international non-profit organisation fighting deforestation and climate change, whose certification is valid in the EU and US.


In 2022-23, which saw Tata Consumer Products' core tea business in India decline by 1% in terms of volume albeit a 1% rise in revenue, and global revenues feeling the heat of global currency volatility, the company doubled launches of new products to maintain revenue growth.


The foods business registered 26% on-year value growth and 2% on-year volume growth. In the last three years, the company has improved its sales ratio to 3.4% from 0.8% earlier but commodity inflation and currency volatility hit the margins in the last financial year.


Chandrasekaran said Tata Consumer Products will also be stressing on the wellness and health categories to drive future growth. The top official told shareholders that the merger of Tata Coffee Ltd with Tata Consumer Products is awaiting the court's approval and is expected to take place this year.


Chandrasekaran said the Tata Starbucks joint venture, where the company has a 50% stake, registered the best ever new outlet opening count in the last financial year, taking the total to nearly 350 outlets.


Further, Managing Director and Chief Executive Officer Sunil D'Souza said the company is targeting to increase its reach to towns with a population of 20,000-50,000 this financial year to improve sales volume and revenue. It currently has a reach across 3.8 mln outlets in the country, or roughly around 54% of the total fast moving consumer goods retail universe in the country. Of this, Tata Consumer has a direct reach to 1.5 mln outlets.

At 1210 IST, shares of Tata Consumer Products Ltd traded 0.8% lower at 785.8 rupees on the National Stock Exchange.



IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Reported by Avishek Rakshit

Edited by Namrata Rao



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