Tata’s recent launches in FMCG including the launch of Tata Sampann pulses and Tata DZ Detergent had set the stage for the company’s intent to move beyond food.
The Tata group has finally consolidated its consumer-facing businesses. In the latest move, the consumer products business of Tata Chemicals will eventually be demerged and then merged with another group company Tata Global Beverages (TGB), bringing all of Tata’s FMCG products under one umbrella. Tata’s recent launches in the same sector including the launch of Tata Sampann pulses and Tata DZ Detergent had set the stage for the company’s intent to move beyond food, says a research report. “Tata Chemicals’ recent product launches suggested intent to move beyond food,” a Kotak Institutional Equities report co-authored by Rohit Chordia, Jaykumar Doshi and Aniket Sethi said.
Tata Consumer Products is eyeing a larger consumer play with TGBL to become the de facto vehicle to drive Tata group’s Business-to-Consumer FMCG plans, the report added. After the merger of Tata CPB with Tata Global Beverages, the latter will be rechristened as Tata Consumer Products.
Tata’s ambitious FMCG plans
As is the case with other FMCG brands such as Britannia, which became a total food industry from cookies; Bajaj, which is now a consumer brand and not just hair oil brand, and; Amul with its latest venture in non-dairy, Tata too has been expanding its portfolio in the past few years. Its latest offering is Tata Sampann range of pulses, spices, besan and pre-mixes. “TCL (Tata Chemicals ) has been aggressively expanding this portfolio in the past few years with good success in select (primarily MT and e-commerce) channels, thus far,” the Kotak report said.
Tata’s vision is to become a multi-category FMCG major by first strengthening its existing presence (Tetley tea, Tata salt, Tata Starbucks), second by expansion of existing new products (pulses, spics, liquid beverages, snacks) and then entering into broader FMCG segment with expansion in high margin, high growth categories such as dairy, home and personal care, according to the report.
N Chandrasekaran, Chairman, Tata Sons, said that with the merger, Tata looks to create a growth platform to meet the growing aspirations of Indian consumers. Tata’s consumer product business (CPB), which was led by Tata Chemicals, comprises manufacturing of edible common salt, spices and protein food.