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We've got a long way to go in food and beverages: Tata Consumer MD & CEO

The company remaining cautiously optimistic on rural demand

Bs_logoTata Consumer Products MD and CEO Sunil D'Souza
Tata Consumer Products MD and CEO Sunil D'Souza
Sharleen Dsouza Mumbai
3 min read Last Updated : Jul 27 2023 | 10:47 PM IST
Tata Consumer Products is looking to make acquisitions in the foods space, Managing Director and Chief Executive Officer Sunil D’Souza tells Sharleen D’Souza in a video interview. Edited excerpts:

Do you expect this growth momentum to continue in the India business?
 
Growth has come back. In rural areas we can see a bit of recovery, and we see recovery also in northern markets. But, it is not still at the level where it was pre-Covid. We’ve always maintained our targets are to grow volumes in mid- to slightly higher single-digits and a couple of points on that with a price mix. Rural markets are coming back and therefore we don’t see any reason why the cycle should turn. I think the monsoon so far, despite being late, has been decent. Inflation has more or less plateaued, and we don’t see vigorous price increases. There’s no reason we cannot continue this trajectory.

Do you expect beverage consumption to improve?
 
I don’t see a problem in growth in volumes continuing. I would say over the next few quarters we should see acceleration from here.
 
Are you still cautious on rural demand?
 
I would say cautiously optimistic, primarily because last year, the big impact was inflation and the input cost for farmers had risen significantly higher than the prices they were getting. Therefore, in real terms, there was a crunch there. This year, inflation being stable or having plateaued, we don’t see that impact. Yes, the monsoon was delayed, but has come with a vengeance. Overall, at this point in time, we are on a stable wicket.
 
How do you expect coffee prices to move?
 
While there has been a run-up, I would expect some stability, if not a downward movement. But coffee is an extremely volatile 
commodity. Right now, our calculation is that there will be a little bit of softness coming in.

Are you looking to make acquisitions in the food space?
 
We are looking at acquisitions and evaluating opportunities. We have identified the segments in which we would go inorganic. Any acquisition will have to pass both the strategic filter, which is the reasons why it will add value to the company, and the financial filter. We are looking at moving up the ladder in terms of both value and margin. So the acquisitions will be in the higher-value and higher-margin spaces.
 
How do you expect revenues to pan out in the international business on a constant-currency basis?
 
We’ve done the margin corrections, and now the whole game is to bring growth back. In the UK, we’ve re-launched our entire Tetley portfolio with an improved blend, improved outer packaging, and improved tea bags, all plant-based. We’ve started making gains in market share. We have to do the right things now to appeal to the consumer and drive volumes because the margins are on a strong footing.

By when can the firm be expected to enter other FMCG categories?

It is on our agenda. But we’ve still got a long way to go in food and beverages.

Topics :Tata Consumer Products

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