In a recent interview with Business Standard’s Sharleen D’Souza, Tata Consumer Products MD and CEO Sunil D’Souza shares her strategic roadmap for food and non-food businesses. Listen
Tata Consumer Products | merchandise
Q1: The volumes of your food business are impacted. Is it because of inflation?
>Tata’s food business in India consists of salt and Tata Sampann/Soulfull/ready-to-eat
>Reasons for volumetric sweetness of salt at T4
-Last year’s fourth quarter volumes up 21% set a high base to cycle this year
-Salt inflation, followed by rising prices over the past nine months
>Despite inflation, salt maintained its margin for Q4 FY22 compared to Q4 FY21
>Tata Sampann grew over 30% in value in Q4 FY22
> Starting from a zero base, Tata Soulfull has seen triple-digit growth in recent months
Q2: Have you been able to pass on lower tea prices to consumers, and why is revenue still impacted in the category?
>Compared to all beverages in India, Tata’s tea revenue was -1%
>Prices have fallen for brands of tea where prices have fallen
Q3: You had a good margin in the quarter when the rest of the industry struggled. Can you explain how you managed this kind of performance on the margin front?
>Salt, tea and coffee are the three main products purchased by Tata Consumer Products
> Apart from salt, tea and coffee prices now seem to be in a range
> The surge in commodity prices seen in categories that Tata Consumer Products does not rely heavily on, such as sunflower oil, palm oil, wheat, etc.
>Ensuring that execution and volume growth continues, despite price increases
Q4: In your performance in international markets, especially in tea, mobility has increased in those markets. This is why out-of-home consumption has picked up and at-home consumption has taken a hit. What is your strategy to improve black tea consumption in these markets?
>The coffee sector enjoys a stable market share, where rising prices are in line with coffee prices and industry trends
>International tea markets have normalized and returned to pre-Covid trends
>Follow three-brand strategy for international markets – put Tetley, Good Earth and Teapigs under the same portfolio and expand
>Beyond strengthening the brand image and improving the execution of Tetley Black Tea, the next opportunities for growth are in fruit and herbal specialties
>Black tea as a category is under pressure in international markets, but the company has an opportunity to equalize
Q5: Starbucks had strong store openings in the previous quarter. Will it continue for you?
>Starbucks opened 50 stores in the last fiscal year. 23 stores opened in the last quarter
>Substantive work has already been done before the stores reopen
>Ambitions to accelerate store growth in India
>Starbucks has 268 outlets in 26 cities in India
Q6: In the Indian market, the contribution of modern commerce has exceeded Rs 1,000 crores. If you can tackle fast commerce, your D2C brands and e-commerce business are evolving right now.
> Modern trade has grown by 30% YoY and is now over Rs 1,000 crore
>New companies like Soulfull, Tata Q, Sampann, etc. are experiencing a disproportionate share and volume growth in modern commerce
First published: Monday 09 May 2022. 07:00 IST