Tata Consumer Products Ltd (TCPL) is now strategizing to explore pharmaceutical channels following the acquisition of Organic India. MD and CEO Sunil D’Souza stated on Sunday that this move would result in a “fully rounded portfolio” when combined with the wholesome offerings from TCPL’s own brands. Additionally, the acquisition of Capital Foods, known for brands like Smith & Jones and Ching’s Secret, will cater to Western cuisine and ‘desi Chinese’ flavors. TCPL aims to expand these flavors into the oriental cuisine space.
Combined with its exclusive brand Sampann, highlighting a diverse array of Indian food and spices, TCPL now aspires to provide a broad spectrum of the Indian culinary palate, featuring Ching’s Secret and Smith & Jones.
“We now have the brands that were required to address the entire portfolio of the Indian consumer’s cuisines per se,” said D’Souza.
Conversely, through Organic India, TCPL is set to venture into the realm of nutraceutical supplements.
“So between the tea infusions, which add to the premiumisation agenda on our portfolio in our base business and entering a completely new category of nutraceuticals, that is the sweet spot with the being,” he said.
This presents an opportunity to establish a strong presence in herbal infusions and herbal as well as traditional supplements, both of which are rapidly growing and offer high profit margins. Additionally, it opens doors to venture into various other categories within the nutrition industry.
This also grants TCPL entry into pharmaceutical retail channels, which have emerged as an alternative for the FMCG industry post-pandemic. These channels facilitate the sale of a range of products, from health supplements to shampoo and soaps.
“So we already have in our portfolio brands like Tetley, GoFit (plant protein powder), Soulfull (healthy millet-based Snacks) which can sell in the pharma channels but we never had a fully rounded portfolio which can actually address this channel.
“Now with with the infusions and the nutritious supplements portfolio of Organic India, we will start looking at how we create a go-to market for the pharma channel. That is what is yet to be done,” said D’Souza.
Last Friday, TCPL announced complete acquisition of Capital Foods at an enterprise valuation of INR 5,100 crore and Fab India-backed Organic India, which operates in the health and wellness category, at an enterprise value of INR 1,900 crore.
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Over the growth in the Indian market, D’Souza said it is coming back but not like in the pre-Covid times.
The FMCG sector went through a significant price hike due to inflation, however, now prices are coming down and expansion is happening.
“We see broadly costs remaining flat. I think the game is to drive volume increases. We are seeing green shoots but too early to say we are out of the woods yet,” he said.
Tata Consumer Products’ Network Expansion and E-commerce Focus
TCPL is also expanding its network by increasing its direct reach. To deepen its penetration in smaller cities, it has now appointed more distributors in towns.
Currently, TCPL is getting around 9 per cent of sales from e-commerce and has also plans to expand its D2C (direct to consumer) business, in which it had decent success, he said.
When asked whether TCPL has plans to enter into the HPC (Home & Personal Care) segment, D’Souza said in the long term it has plans but it will take time.
“In the long term, yes. We will not get from where we are to a full FMCG in one shot,” he said adding, “We are just a three-and-a half year old company. We still have a long way to go. We do aspire to be a large FMCG but one step at a time.”
TCPL is right now focused on the food and beverage space, which has “huge opportunities” and high margins.
