Tata's Chandra: 'We're adapting to the new normal'

We are adapting to the situation by innovating new delivery modelss, launching brand campaigns that are impactful in the current context and closely monitoring changes in consumer buying behaviour, he said.

The pandemic has brought unprecedented change in the way people live and work, N Chandrasekaran, chairman, Tata Consumer Products, said at the firm’s annual general meeting (AGM) on Monday.

Held virtually, the AGM was the first after the merger of the Tata Chemicals consumer business with Tata Global Beverages in February.

The consolidated top line of the firm for FY20 stood at Rs 9,637 crore after the merger.

Nearly 60 per cent of Tata Consumer’s consolidated revenue comes from India, while the rest comes from international markets.

“We faced logistical challenges in the Indian market,” Chandrasekaran said.

“Limited availability of workers due to large-scale migration, restrictions on movement and transport and time taken to streamline retail operations were some of the key issues.”

While Tata Consumer saw a spike in retail and online sales for its branded businesses, its food-service sales and out-of-home businesses were impacted.

Though some of these challenges, Chandrasekaran said, would persist in the short term, the situation had progressively improved.

“We are adapting to the situation by innovating new delivery models, launching brand campaigns that are impactful in the current context and closely monitoring changes in consumer buying behaviour,” he said.

Tata Consumer has identified new priorities for FY21, including investing behind its salt, tea, and branded food business under Tata Sampann as well as taking health and wellness to the next level following acquisition of PepsiCo’s stake in NourishCo joint venture.

Tata Consumer is also scaling up its digital initiatives across channels and will look to unlock synergies in cost and revenue for the business, Chandrasekaran said.

The immediate focus would be to strengthen distribution and make products available both online and offline, he said, while entry into areas would be calibrated.

Tata Consumer's products would also be available on the Tata Digital platform, which would be launched later this year.

And, Tata Sampann, described as a ‘diamond in the rough’ by new managing director and CEO Sunil D’Souza, would be extended to new categories.

In FY20, Tata Consumer acquired the branded tea business of Dhunseri Tea (in Rajasthan) and would continue to evaluate organic and inorganic opportunities in the future.

“The India market presents exciting growth opportunities and the integration of the beverages and foods businesses in India gives us a strong platform for accelerated growth.

"The current scenario, I believe, is also a learning opportunity, and we will emerge stronger from this,” Chandrasekaran said.

While Tata Starbucks, the retail joint venture business of the company, clocked 21 per cent growth in revenue for FY20, performance was impacted in Q4 due to the pandemic and lockdown, Chandrasekaran said.

“In the short term, store reopening and ramp up will depend on the pace at which normalcy is restored in the economy and the return of consumer confidence.

"We are exploring additional revenue models, including delivery and open pick up systems,” he said.

There are 185 stores of Tata Starbucks across 11 cities in India.

However, only 50 per cent of these stores are currently open.

Photograph: Danish Siddiqui/Reuters