Closely monitoring near-term trends to see impact on consumer behaviour: Tata Consumer Products MD

‘Mitigating impact of supply-chain stress, high energy prices and geopolitical tensions requires strategic focus, agility and efficient execution’

Updated - June 05, 2022 07:12 pm IST

Published - June 04, 2022 09:32 pm IST - New Delhi

The company will be monitoring the global situation and inflation closely and put in ‘practical and adequate’ mitigating measures, Mr. D’Souza says in the latest annual report of the Tata group’s FMCG arm.

The company will be monitoring the global situation and inflation closely and put in ‘practical and adequate’ mitigating measures, Mr. D’Souza says in the latest annual report of the Tata group’s FMCG arm.

Terming the current macro environment as ‘highly volatile’ due to geopolitical tensions, supply-chain stress and inflation, Tata Consumer Products Ltd. (TCPL) MD and CEO Sunil D’Souza said the company was closely monitoring near-term trends to see how these economic headwinds affected consumer behaviour.

The company would be monitoring the global situation and inflation closely and put in ‘practical and adequate’ mitigating measures, Mr. D’Souza said in the latest annual report of the Tata group’s FMCG arm.

Global supply-chain stress and higher energy prices had led to widespread inflation, and geopolitical strains had further exacerbated the situation. Mitigating the impact required strategic focus, agility and efficient execution, he said.

"On a positive note, we are in the staples business and hence relatively better positioned to ride out these speed bumps. We also have a plethora of initiatives to drive growth and create efficiencies that can enable cost optimisations," Mr. D'Souza added.

These factors give lend the company confidence to be able to deliver profitable growth notwithstanding the impact of the operating environment, he said.

Talking about changes in consumer behaviour, Mr. D'Souza said awareness levels were very high. There were some secular trends shaping the consumer landscape in India with rising disposable incomes, increasing urbanisation, and the democratisation of the Internet.

These trends were leading to consumers seeking better quality and trusted brands with increased convenience. The pandemic had further accelerated digital adoption and had also brought health and wellness ‘front and centre’ for consumers, he pointed out.

"While these are some of the secular trends that will play out over the medium to long term, we are closely monitoring the near-term trends to see how inflation and other economic headwinds could affect consumer behaviour," he said.

TCPL would continue to leverage the trust that the brand inspired, expand portfolio and increase footprint to reach more consumers in India, he added.

"There is a significant opportunity for us to grow our wallet share, shelf share, and business share," he said.

Currently, TCPL reaches more than 201 million households in India and distributes to over 2.6 million outlets.

"We will continue to execute on our strategic priorities and accelerate our growth momentum. Innovation, supply chain optimisation and digitalisation will be focus areas for the year ahead. We will continue to strengthen our sales and distribution across traditional as well as modern channels," he said.

TCPL would focus on simplifying its business structure in India as also overseas to drive further efficiencies and synergies, Mr. D’Souza added. Recently, it announced a re-organisation plan to combine Tata Coffee's business into TCPL.

On the outlook, TCPL said it would "continue to see volume-led growth in India with a favourable young demographic profile, rising affordability, and urbanisation supported by the increase in penetration and rising share of the branded market." The shift in preferences towards premium products and consumers making conscious choices to consume trusted and healthier products, especially post COVID, will continue to play out within the category.

"With Internet users multiplying and increased access to social media, we are also seeing the emergence of digital-only brands with a direct-to-consumer business model," it said.

Addressing shareholders in the annual report, TCPL chairman N. Chandrasekaran said the company had made "substantial progress" over the strategic priorities for the business.

"Progress was made on expanding our distribution significantly, accelerating the pace of innovation, redesigning our supply network, and driving digital transformation across the value chain.

"We are investing in these capabilities for the long term and I am confident that these will catapult us towards our goals," said Mr. Chandrasekaran, who is also Tata Sons Chairman.

According to the Tata group head, one of the exciting opportunities before the company was to understand consumer trends and leverage them to expand portfolio and drive future growth.

There have also been several introductions across the foods and beverages portfolio, catering to consumer needs around health and wellness, taste and convenience, which helped to expand the total addressable market.

"We continued to invest behind all these initiatives to ensure that these will act as growth engines for the future," he said.

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