There is no plan to rebrand Ching’s Secret, Smith & Jones and Organic India brands, Tata Consumer’s MD& CEO Sunil D’Souza said in an analysts’ call on Wednesday. D’Souza was addressing investor queries on the acquisitions of Capital Foods and Organic India, announced on Friday by Tata Consumer.
The maker of Tata Tea and Tata Salt will spend Rs 7,000 crore on the acquisitions, which will help it get into high-growth areas, it said. “We have bought these brands for what they are. We have not bought them to dismantle them. If we feel there is value in adding the Tata name to these brands, we will do so later,” D’Souza said on the investor call.
The Tata name is part of most of Tata Consumer’s brands, barring Himalayan, which was acquired over 15 years ago. D’Souza says that addition of the Tata name requires a careful process of evaluation.
“We acquired the Soulfull brand in 2021 from Kottaram Agro Foods (based in Bengaluru). We added the Tata name to the Soulfull brand. It has helped the brand grow in the breakfast cereal and snacking category,” he told investors. Soulfull is a millet-based brand and has seen a number of extensions since acquisition by Tata Consumer.
The company also has Tata Sampann, which is into branded commodities, masalas, dry fruits, nuts etc. and has a portfolio of good-for-you beverages under NourishCo, apart from its base business, which includes tea, coffee and salt.
D’Souza said that Tata Consumer, whose FY23 consolidated turnover was Rs 13,783 crore, was looking to transition to a large FMCG company, using both organic and inorganic initiatives for growth. “We will play first in food & beverages, look at value-accretive inorganic opportunities that gives us access to fast-growing categories,” he said.
The company is looking at multiple funding options for the two latest acquisitions, which gives access to categories such as instant noodles, sauces and pastes and organic teas and wellness products.
In a conversation with FE on Sunday, D’Souza had said that the company had Rs 3,000 crore in terms of cash on its books, which would be utilised for the transactions. The balance Rs 4,000 crore would be raised through a mix of short-term debt and a rights issue. The proposed size of the rights issue has been pegged at Rs 3,500 crore, though D’Souza said that the Tata board would finally approve the fund-raising plans at a meeting on Friday (January 19).
“The Capital Foods transaction will close in two weeks from now. While Organic India will take around 45-60 days in terms of closure,” D’Souza told FE.
In terms of integration, he said, both Capital Foods and Organic India would fit strategically into the platforms built by Tata Consumer. This included breakfast and mini-meals for Capital Foods’s instant noodles and soups portfolio; pantry business for Smith & Jones sauces and pastes and premium teas for Organic India’s teas and infusions.