While beverages saw the softening of demand in the third quarter of FY23, FMCG major Tata Consumer Products anticipates good growth ahead. Puneet Das, President-Packaged Beverages (India and South Asia), Tata Consumer Products, spoke to businessline on the premiumisation of coffee, hyperlocal strategy and revival of demand. Excerpts:
What are the key focus areas for Tata Consumer Products since you joined?
I started by heading marketing for Tata Global Beverages when I joined. While we are a strong player, the focus continues to drive the business in India in terms of premiumisation in the portfolios.
Second, I think at the bottom of the pyramid when it comes to the economy segment or value-for-money segment, there is enough and more opportunity in India; we went through a complete revamp of our brand architecture. We introduced variants under the brand Agni and for us to synergise the marketing spans and media efficiency, we could advertise behind those brands and grow the value-for-money segment.
Lately, our focus is also on launching innovations and taking the hyperlocal agenda to the next level by offering flavors from different cities. We have introduced a signature range of tea from Hyderabad, Mumbai and Kolkata.
Tata Tea witnessed a dip in demand during Q3. Is the demand still soft?
The demand was hit in Q3 till November across FMCG, but we have seen signs of good growth coming back in the last two-three months. We witnessed people downgrading or choosing lower bags and looking for more value-for-money kind of brands.
FMCG players are seeing the return of rural demand. How is it for Tata Consumer Products?
Some green shoots are happening in the rural growth but it has overall improved from where it was. I still think we have some way to go before the demand comes back, which is the general sentiment across the FMCG industry.
What are your plans for increasing penetration in coffee?
We have been investing in our coffee business for the last three years. We have a long way to go; we are just about a 1 per cent share brand. Once we cut into Tata Consumer products is when we started investing in our coffee portfolio and it’s been growing well for us.
The fastest growing range in coffee at a mass level is instant coffee — we have Tata Coffee Grand Instant, which is also growing very well. We have launched cold coffee in a liquid decoction, too. We are looking at premiumisation from a format and convenience points of view as well as offering premium versions like Tata Coffee Cold.
How has the TCP platform, Tata Nutrikorner, helped the business grow and what is the overall D2C strategy?
We started our D2C journey about 2-3 years back and it has been a good play for us. Nutrikorner is basically where we have our entire TCP range. We offer our gourmet and premium tea ranges along with roast and grind coffee for consumers seeking niche experiences.
If a consumer comes to purchase tea, they discover that we also sell dry fruits and they end up buying that. It is in the very early days and nascent stage, but we can get fast responses from consumers and know what is working in particular.
What is your view on the increase in competition in the FMCG space?
Competition generally ends up growing markets and consumers benefitting from that. Healthy competition is always good and in the FMCG space in a country like India, there are all sorts of consumer segments. If you offer the right product at the right price, there will always be a sizeable addressable market that one can look at. I think FMCG should continue to expand.