Tata Consumer has managed to tide over macro challenges: Chandrasekaran

Tata Consumer Products has delivered good performance across key metrics despite macroeconomic challenges, said Natarajan Chandrasekaran (pictured), chairman of Tata Consumer Products, at the company’s annual general meeting held on Tuesday.

“Through the year, we saw continued challenges due to a volatile macro-economic environment and geopolitical unrest. However, we remained focused on executing our strategic roadmap and building on the strong foundations we have laid to enable future growth,” he said, adding, “The macro-environment remains volatile and we will need to be adaptable and agile in order to manage the challenges as well as the opportunities arising from this.”

During the year, the FMCG major has strengthened its core businesses and expanded its target addressable market and has also opened up opportunities for growth, he added.

Chandrasekaran said that Tata Consumer has expanded its sales and distribution network and has grown its direct reach three fold from 0.5 million outlets in 20202 to 1.5 million outlets currently and its numeric reach stands at 3.8 million which puts the company in the top quartile of Indian FMCG companies. 

The company has invested in building its R&D capabilities and has stepped up the pace of innovation and launched twice the number of products compared to the previous year. 

“We expanded our portfolio and entered new categories. Our innovation agenda is being driven by key consumer trends such as health & wellness, convenience, and digitisation,” Chandrasekaran said at the AGM. 

Its innovation to sales ratio is at 3.4 per cent up from 0.8 per cent in FY20 thus putting it in the top set of Indian FMCG companies. 

In FY23, Tata Consumer Products consolidated revenue grew 11 per cent and its EBITDA growth was 7 per cent. 

“Our International business recorded good growth but the profitability was impacted by commodity inflation and adverse currency movements. We

have taken pricing and structural cost actions to mitigate that and are now seeing a strong sequential recovery in our margins,” Chandrasekaran said. 

He added, “We are strengthening our non-black tea portfolio, expanding our reach in coffee, and have entered the ethnic Ready- to- Eat and Ready -to- cook categories in key markets.” 

The company is focused on streamlining and simplifying the business. Last year, the company had outlined the plan to merge Tata Coffee’s business with Tata Consumer Products to drive revenue synergies and operational efficiencies in addition to simplifying legal structures and driving cash efficiencies.

He said that the merger is on track to be completed in the first half of FY24.