Tata Consumer Products (TCPL) is strengthening its presence in the e-commerce space besides scaling up traditional distribution network, its chairman N Chandrasekaran said on Friday.
Addressing shareholders at the company’s virtual annual general meeting, Chandrasekaran, who is also the chairman of Tata Sons, the holding company of the Tata group, said TCPL will launch Eight O’Clock coffee next week after having completed integration of its India food and beverages business.
“We have significantly focused on strengthening the distribution, traditional distribution as well as e-commerce. This is an area you will see continuous strengthening, which will only help the company,” he said.
The focus of TCPL will be to come up with more products and push it through a strong distribution network “both offline and e-commerce, its own e-commerce platform and to leverage our Tata Super App also”.
Tata Digital, a wholly-owned subsidiary of Tata Sons, has acquired a majority stake in Supermarket Grocery Supplies, which operates BigBasket.
It also operates an e-commerce platform, Tata CLiQ, which deals in segments like apparel, electronics and footwear categories.
On the Starbucks coffee chain, Chandrasekaran said TCPL would continue its expansion despite its business being hit during the second wave of the pandemic.
The business of Starbucks has become profitable in 2020-21 and had opened new stores but was impacted by the second wave.
“We would continue to expand it,” Chandrasekaran said.
Tata Starbucks is a 50:50 joint venture between Tata Consumer Products and Starbucks Corporation, and operates around 200 stores in India.
On its tea cafes Tata Cha, Chandrasekaran said it was an “experiment and currently there is no definitive plan to scale this up”.
While replying to a shareholder’s queries, Chandrasekaran said that from a manufacturing and distribution point of view, Tata consumer will continue to play the lead role in the fast-moving consumer goods (FMCG) segment.
In February, TCPL acquired Bengaluru-based Kottaram Agro Foods and renamed it as Tata Consumer Soulful, primarily engaged in the business of breakfast cereals and millet-based snacks.
“Our FMCG ambition was bolstered through two strategic acquisitions in India – Soulfull and NourishCo, which helped create a much wider portfolio,” managing director and CEO Sunil D’ Souza said.
TCPL has also divested non-branded businesses of MAP out of home coffee in Australia and food-service business in US, in which it had membership interest in Empirical Group and Southern Tea. “We have exited from the US and Australia this year,” Chandrasekaran said.
“Our focus currently is to expand both the distribution and the adjacent categories in beverages and foods. There is a lot of scopes but there are definitely plans and other categories in the FMCG segment in the years to come,” he said.
TCPL has reported consolidated revenue from operations of Rs 11,602.03 crore for FY21.
A major component of the integration of the Indian food business was redesigning the sales and distribution architecture and network in India by adding 30% feet on the street in the system and enhancing the direct outlet coverage by 30%.
” We are now focused on increasing our rural reach,” D’ Souza said adding that e- commerce business and modern trade businesses grew 30% and 130% respectively in the last one year.