During an interview, Vikram Grover, the Managing Director of NourishCo Beverages, a subsidiary of Tata Consumer Products, stated that while local FMCG brands may have experienced rapid growth compared to national brands over the past year, they are ready to face any competition with their unique and distinct products.
“The problem (of local competition) magnifies if companies sell the same products. We have a combination of differentiated products, great value, national advertising at scale and investments in distribution muscle, which is difficult to emulate,” he said.
According to a report by Kantar last week, the volume growth of regional and local brands surpassed that of national ones in the 12-month period ending on 30th April. The volumes of regional and local brands experienced a significant growth of 12.7%, while national brands only grew by 8.2% during the same period.
“We believe we have a potent mix of levers to help us overcome any such competition,” Grover said.
Tata NourishCo, known for its sales of Himalayan mineral water, Tata Gluco Plus functional drinks, Fruski juices, and honey, is now venturing into the premium spices category. Under the Himalayan brand, the company is introducing Kashmiri saffron, which Vikram Grover described as potentially the world’s most expensive spice.
“Given the adulteration prevalent in the category, there is a trust deficit in the saffron category in India and lack of awareness among consumers. We are addressing this with our product,” he said.
India’s total saffron demand is roughly estimated to be 100 tonnes per year, with domestic production accounting for 13 tonnes of Kashmiri saffron.
The company has plans to expand into other areas under the Himalayan franchise, but they will exclusively focus on premium offerings.
“The attempt is to move beyond the water space. But we will get into spaces within the guardrails of premiumisation and purity,” he said.
Functional beverages continue to be a niche category, unlike the mass entry-level segment where major players like Bisleri, Coca-Cola’s Kinley, and PepsiCo’s Aquafina engage in competition.
In FY23, NourishCo recorded net sales of INR 621 crore. Initially established as a joint venture between Tata Consumer Products and PepsiCo, a renowned beverages and snack foods maker, the company underwent changes in 2020 when the Tatas acquired PepsiCo’s stake in NourishCo. Since then, the Tata group has expanded its premium beverages portfolio within the NourishCo brand.
Grover said the company sees “a lot of scope to convert consumers to branded beverages and expand distribution”.
During the quarter ending June 30, 2023, Tata Consumer Products, a subsidiary of the Tata Group, announced a notable year-on-year increase of 22.1 percent in net profit, amounting to INR 337.7 crore. Within the same quarter, the packaged beverages business showed a 2 percent growth in revenue and a 3 percent increase in volume. The coffee business reported a substantial 21 percent growth, while the India foods business witnessed impressive revenue growth of 24 percent.
Earlier this year, the company revealed a business reorganization plan, consolidating Tata Coffee’s plantation business into Tata Consumer Products Foods and Beverages division.
