NourishCo Beverages, the maker of Himalayan packaged water, premium honey and preserves, and ready-to-serve fruit drinks, and 100% subsidiary of Tata Consumer Products Ltd (TCPL) is betting on the unorganised nature of the beverages segment in India and is looking to launch products which cater to local tastes and are differentiated in terms of innovation from what the peers in the market do.
Vikram Grover, managing director, NourishCo Beverages, Tata Consumer Products told FE that the company is looking at expanding its current portfolio of products, which is small at present. “We have a small portfolio of products and portfolio expansion as a strong opportunity for growth. This comes on the back of highly differentiated launches and products to India,” he said.
The company sees opportunity in three broad areas which include enhancing propositions on water, then products which are more functional for the consumers and not just cater to their taste and pleasure, and third is offering consumers with experiences inspired by local habits yet differentiated.
The company’s existing portfolio includes Himalayan natural mineral Water, Tata Gluco Plus and Tata Copper+ Water. NourishCo is now launching a juice and jelly combination beverage called Tata Fruski, which Grover said is an attempt to create a product which is inspired by all of what is available on the streets of India. “The idea is to not give a product that consumers can buy off the streets because then the margin opportunity becomes smaller. Intention is to give a highly differentiated product to the Indian market and delight consumers with it,” he said.
Like other FMCG food and beverage companies which are coming out with products in small packs rather than large, NourishCo is also seeing single serve packs performing better in a high inflationary environment. “The single serve play is growing more rapidly than the rest in the last 6-8 months. It’s a combination of inflation as small packs are more affordable, and also as more people are up and about post Covid, it is working better,” he said.
NourishCo is currently focused on the price points of Rs 10-Rs 20, with its Tata Gluco Plus priced at Rs 10 available as a low cost energy drink, while Tata Fruski will be available for Rs 20 for a 200 ml pack in key market of Kolkata in the east and Mumbai and Goa in the west, to begin with.
According to Grover, the company is also looking to beef up its distribution going forward, and sees the value proposition as a good driver in both urban and rural geographies. “There is opportunity to grow and expand the portfolio and distribution as well, because we are nowhere closer to being a national player, and also there is opportunity for value business portfolio across the strata,” he said.
At present, NourishCo’s distribution is spread across 5.5 lakh outlets and it plans to double its reach over the next three years. TCPL does not give specific rural reach numbers for individual brands. NourishCo clocked revenue of Rs 138 crore in the recently ended September 2022 quarter, with a growth of 64% year-on-year, which was led by all products and geographies.
According to Grover the growth momentum is sustainable as India is a highly under penetrated market for liquid refreshment beverages. Also, as it is flooded with unbranded products, it makes for a large opportunity for ready-to-drink beverages like juice, juice-based drinks, and natural beverages, he added.
India’s non-alcoholic beverages market is expected to grow to Rs 1.48 trillion by 2030 at a compound annual growth rate (CAGR) of 8.7%, from around Rs 67,100 crore in 2019, according to a recent report by Indian Council for Research on International Economic Relations (ICRIER). Carbonated soft drinks, ready-to-drink teas (RTDs), energy drinks, and sports drinks accounted for more than 60% of the global market. Carbonated beverages are the most popular among Indians, followed by bottled water and fruit beverages and juices.