Tata Consumer Sees Urban Demand For Convenience Fuelling Next Gen Brands

Tata Consumer Products Ltd. is seeing a rapid shift towards convenience-led consumption, especially in cities, fuelling demand for snacks, cooking aids and ready-to-drink beverages. These, along with demand for heathy options, would drive the Tata Group company's next phase of growth.

"With urbanisation, time-constrained consumers are seeking convenience, leading to rising demand for cooking aids, ready-to-drink beverages and snacking," P B Balaji, non-executive non-independent director at TCPL, said while addressing shareholders at the company's annual general meeting.

He chaired the meeting in the absence of N Chandrasekaran, who is in New Delhi attending to an exigency following the recent Air India plane crash that killed 241 people on board and at least 33 more on the ground.

TCPL's ready-to-drink portfolio, which faced competitive pressure amid a price war by Reliance's Campa Cola, has now turned the corner, Balaji said.

In FY24, the company acquired Ching's Secret maker Capital Foods aside from Organic India. These two brands, defined as growth businesses, comprise 28% of India business as of March 2025, according to its investor presentation. The businesses crossed Rs 3,200 crore of revenue in FY25.

"Capital Foods, with umbrella brands like Ching's Secret and Smith C Jones, gives us a stronghold in the fast-growing in-home cooking aids segment with pan-India appeal, while Organic India brings us a differentiated, mass-premium wellness portfolio spanning teas, supplements and staples. Together, they open up a large and growing total addressable market, deepen our presence in urban and emerging India," said Balaji.

He added that consumers are becoming more health-conscious, seeking better-for-you and organic options. There is also a clear premiumisation trend, even in staples. Distribution is being reshaped by quick commerce, even as physical retail remains deeply relevant. Additionally, digital-first marketing and hyper-personalisation are rewriting the brand playbook.

"We're leveraging these trends — with a bold strategy, disciplined execution and an ambition to build a future-ready FMCG powerhouse," he said.

On future acquisitions, Balaji said: "We have our antennas up and if there's something sensible at the right price and it fits in well with our portfolio, we will do that. But rest assured, we have a sizable amount of gunpowder with us, and therefore growing organically will be the first focus, inorganic growth will be more bolt-on (acquisitions)."

Geopolitical uncertainties, shifts in global supply chains, advances in generative AI and climate events continue to test business resilience. "Yet, even amidst this volatility, we find ourselves at a unique moment in history — where innovation, transformation and consumption-led growth are converging," said Balaji.

Artificial Intelligence is rapidly transforming every function — from demand forecasting and content generation to inventory optimisation and pricing intelligence. Companies that embed AI deeply into operations will lead the next phase of value creation, according to him.

Other than new opportunities, Tata Consumer will also prioritise strengthening its core portfolio — tea and salt. "These businesses have not only sustained leadership but also premiumised meaningfully," Balaji said. "In India tea, premium and mass premium brands account for almost two thirds of the portfolio and in salt business, we have gained more than 700-basis-point market share over the past five years, and the value-added salts are now 10% of the salt business, up from less than 1% five years ago."

Tata Consumer has launched one new product every nine days in the fiscal ended March 2025. "Over the last five years, we have launched over 150 products, and our innovation to sales ratio has grown from 0.8% in FY20 to 5.2% in FY25 — among the best in the industry," according to Balaji.

Channel-wise, the company has seen a two times growth in modern trade in FY25 over FY21. E-commerce contribution, on the other hand, is growing over four times, led by exponential growth in quick commerce. "As we look to the future, we are deepening our focus on quick commerce, pharmacy and food services as high potential emerging channels," said Balaji. Currently, e-commerce contributes 13% to TCPL's overall India business.

Balaji also addressed US tariff concerns, given the company's exposure to overseas markets. About 40% of Organic India's sales and 10% from Capital Foods come from the US, which also markets tea, salt and coffee there.

"The tariff will cause some amount of demand stress," he said. "From a competitiveness perspective, everybody's equally impacted... We've been holding pretty steady on our Eight o'clock coffee shares, and in the last two quarters, we're also seeing healthy growth in that portfolio."

TCPL, which has been battling high inflation in tea and coffee, is optimistic about the new season's crops. "The tea crop this year, we believe, is going to be normal and definitely better than last year, and coffee of course, all of us have been watching it, the pricing is volatile, and we will need to take a very close look at that, but it looks like the crop could be normal this year," he said. "The auction prices of tea are currently equal to last year, and it's expected to soften as the season starts and continues."