Tata Consumer Soulfull Pvt. has chalked out ambitious plans this year to make millets a popular choice on plates across the country, according to Managing Director Prashant Parameswaran. But bringing the grain back into meals across the social spectrum won't happen overnight, he said.
"A lot of conversations have been around the millets and making them mainstream, but it is still a work in progress," he told BQ Prime.
India's campaign to make millets, touted as nutri-cereals or superfoods, a global brand has helped increase awareness, with the health-conscious generation lapping up everything from millet cookies to masala oats. The campaigns have also started to influence Tata Soulfull's sales beyond the metros, which Parameswaran says is an "encouraging sign".
"There is a large gap between the top 10 cities and the rural areas," Parameswaran said. "What we are currently seeing is that the consumers lapping millets beyond the top 10–18 cities are as strong as what we see in the metros, if not stronger. Precisely, around 35% of our business is coming from outside of the top 18 cities, and that part of the business is growing manifold."
There are two important factors driving growth, according to him. "Firstly, we are bringing millets into a product that is relevant to a consumer, and secondly, these products are available at a price point of Rs 10 — that's extremely affordable. We are further pushing the low-unit packs," he said.
"But we are yet to see the demand uptick that's happening in tier 1 and tier 2 cities, in the rural areas," Parameswaran said, adding that it will be a gamechanger for the company only when the rural demand picks up.
Rural India contributes about 36% to a typical consumer company's sales and is an important focus area, given its much lower per-capita consumption. More importantly, it makes up roughly two-thirds of the country's population. Inflationary pressures pushed rural consumers to ration their consumption, hurting volume growth for most packaged food companies.
Rural demand, however, is showcasing signs of improvement on the back of encouraging winter crop sowing, indications of higher farm income, and continued government stimulus, according to industry executives.
"If we need to really make all the changes that millets have to bring, be it food security, nutritional security, climate change, or sustainability concerns, it essentially means consumption needs to jump," said Parameswaran. "We are currently just scratching the surface... So, we are very far from reaching the actual potential that millets have to offer."
Millet consumption, as a percentage of the overall food basket, is still in the single-to-decimal-level digit, according to Parameswaran. Millets as a category, he said, have the potential to account for at least 10% of the packaged food business.
Several packaged goods companies like ITC Ltd., Britannia Industries Ltd., Nestle, Hindustan Unilever Ltd., and Patanjali Ayurved are betting big on value-added millet products.
To make millets like jowar, bajra, and ragi, these consumer goods firms have launched a clutch of products like muesli, granola, upma, poha, chips, biscuits, and noodles. And the product basket is only getting larger.
Tata Consumer Soulful is assessing three to four large categories at the moment and is in the process of launching one to two new categories over the next one or two months, said Parameswaran.
The company, he said, is also in advanced stages of discussion with three parties to expand capacity. Currently, it has a total production capacity of 500 tonne, including its in-house capacity of 300 tonne.
Tata Consumer Soulful is a wholly owned subsidiary of Tata Consumer Products Ltd. It operates in the health and wellness-focused food segment with a portfolio of millet-based products for children and adults. The company is leveraging Tata Consumer Products' distribution network to penetrate deeper into the length and breadth of the country, Parameswaran said.
Tata Consumer Products is building distribution channels in rural and semi-urban markets. The company has increased its direct distribution by 15% to 1.5 million outlets as of March 2023. It aims to expand it further to 4 million. Tata Soulful, the company said, is available in five lakh outlets.
In its latest annual report, Tata Consumer said that innovation will remain a key growth driver for the business, with new product launches every three to four months in the ready-to-eat category. In FY23, Tata Soulfull's revenue grew 100%, driven by distribution, and the management expects its revenue to sustain its double-digit growth momentum. Within categories, its largest-selling kids' portfolio enjoys a double-digit market share, and Masala Oats is nearing a double-digit market share.
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