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5 Reasons Behind Steady Growth of Tata Consumer Products

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The history of Tata Consumer Products dates back to 1962 when it was formed as Tata Finlay through an alliance with James Finlay. However, as the years passed, the company, through its product expansion, became a household name in India.

The company’s Tata Salt pioneered the iodized salt movement in India in 1989 to combat iodine deficiency. Similarly, Tata Tea revolutionized the Indian packaged tea industry with its flavor-locking poly pack over 30 years ago.

The company’s growth is not backed only by these two products; many other parameters also play a role. Let’s discuss them.

Factors Influencing Tata Consumer Products Limited Growth

Here are the top factors that should be considered.

1. Diverse Offerings

Tata Consumer Products has diversified its offerings beyond traditional tea and coffee products, which has also helped increase Tata Consumer share price from Rs. 220+ to Rs. 1,100+ in June 2024.
The short and long-term returns which you can see on Tata Consumer share chart are:

  • 1-year: 38.14%
  • 2-year: 50.28%
  • 3-year: 62.44%
  • 4-year: 199.64%
  • 5-year: 342.41%

The introduction of pulses and spices under its Tata Sampann brand is a prime example. The company sells a range of pulses sourced from organic farms, processed, and packaged so that their nutritional value remains intact.

In addition to pulses and spices, Tata Consumer Products has ventured into the ready-to-drink (RTD) and ready-to-eat (RTE) segments. The company launched the ‘Say Never’ Energy Drink, marking its entry into the energy drink category.

2. Strategic Acquisitions 

Tata Consumer Products is strategically expanding its FMCG portfolio. The company merged its food business from Tata Chemicals to bring staples like salt, pulses, and spices under the Tata Consumer Products banner.

The company also took over NourishCo Beverages to add Gluco Plus to its product portfolio. The acquisition spree didn’t stop there; Kottaram Agro Foods and Tata Q (ready-to-eat packaged food) were also on this list.

Not only this, but Tata Coffee’s merger with Tata Consumer Products will also help improve operational effectiveness.

3. International Reach

The company has expanded its reach internationally, particularly in the UK, USA, and Canada. Its strong presence is evident through tea brands such as Tetley, Good Earth, and Teapigs. These tea brands are further classified into black and non-black tea, herbal and fruit-flavored tea, and coffee pods.

In its food segment, the company offers iodized salt, ready-to-cook offerings, and breakfast cereals. To improve its revenue from the global market, the company recently launched Tata Salt Plus and Lite variants, Tetley Cold Infusions, and Tata Gluco Plus.

4. Improved Distribution

The company has been actively increasing its direct distribution footprint. Over the past year, it has achieved a 15% increase in direct distribution, reaching 1.5 million outlets across India as of FY2023 from 0.7 million in FY2021. This expansion is more than double the reach from two years ago.

Tata Consumer Product also expands its reach through e-commerce and modern trade channels.

Not to forget, brands like Chakra Gold and Kanan Devan in tea and Tata Coffee Grand have been gaining ground in the South, backed by strong brand campaigns.

5. Sustainability

The company has set clear long-term commitments and milestones for the financial year 2025-26. In the coming years, Tata Consumer Product will focus on sustainable practices across its operations. This includes initiatives like the launch of premium Grade 1 Saffron under its Himalayan brand, which supports Kashmir’s local saffron farming community.

Conclusion

Tata Consumer Products’ growth results from its diversified product portfolio, strategic acquisitions, robust distribution network, focus on innovation, and commitment to sustainability. As the company continues to explore new opportunities and drive digital transformation, it is well-positioned to maintain its growth momentum in the future.

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