Tata Consumer Products recently announced its results for the quarter ended 30 June 2022. Revenue from operations increased by 11% (10% in constant currency) as compared to the corresponding quarter of the previous year. Profit before exceptional items and tax at Rs 403 crore is higher by 19%. Group consolidated net profit at Rs 277 crore is higher by 38%.
Some of the key business updates are:
- For the quarter, as the company corrected tea pricing the India packaged beverages business recorded 4% revenue decline on an elevated base that saw 24% revenue growth in the same period last year. The company continued to record market share gains in branded tea.
- Coffee volume grew 43% YoY with revenue growth of 73% during the quarter with new SKU launches and roll out in new geographies.
- Tata Tea Teaveda was restaged in line with simplification and consolidation of brands under the Tata Tea Premium Masterbrand architecture.
- The Kanan Devan tea brand saw outstanding growth led by brand building and on ground execution.
- Tata Tea released a film on JaagoRe to Fight Climate Change with actor Pankaj Tripathi to sensitize people on how the company can all take small steps together and help fight against climate change.
- For the quarter, the India foods business registered 19% revenue growth on an elevated base that saw 20% growth in the same period last year.
- The salt portfolio continued its momentum and recorded double digit growth during the quarter despite a high base in Q1 last year. The salt portfolio also continued to record market share gains. The premium salts portfolio recorded 36% growth during the quarter, continuing its strong trajectory in line with the company’s premiumization agenda.
- Tata Salt Immuno with its category-first unique proposition of added zinc is being rolled out nation-wide post encouraging results in the pilot phase.
- Tata Sampann relaunched its spices range with new and improved packaging. The relaunch takes a clutter breaking approach with a dialed up chef endorsement and strong shelf throw. The brand also launched bespoke pure spices for the South India market.
- Tata Sampann’s latest TVC with Manoj Bajpayee builds awareness about Tata Sampann Haldi which has essential oils intact and is sourced from the choicest farms to deliver an enhanced food experience.
- Tata Sampann dry fruits is scaling up the company with positive reviews and higher offtakes across eCommerce. The brand is also expanding across select offline retail outlets.
- Tata Consumer Products recently entered the alternate meat segment with the launch of Tata Simply Better- Plant Based Meat (PBM) range. With this new brand, the company is extending its product portfolio into a new category, targeting consumers who are looking to incorporate more plant-based ingredients for health, sustainability or other considerations.
- Tata Soulfull delivered strong growth during the quarter. The brand recently expanded its wholesome snacking portfolio with the launch of Tata Soulfull Masala Oats+, a better for you offering with oats and millets.
- NourishCo sustained strong growth momentum during the quarter with a 110% revenue growth led by strong growth across products and geographies. Himalayan recorded excellent growth and was EBIT positive during the quarter. Capitalizing on the brand’s strong brand equity, it is being extended into a provenance brand with the launch of premium honey and preserves sourced from the Himalayan belt.
A new campaign was launched for Tata Copper Water and the franchise has scaled to 2.9 times.
- The company reached new milestones in its sales and distribution transformation agenda. Its wholesale reach is now 2x compared to Q1 last year.
- The company continued to see strong growth in alternate channels, with modern trade channel growing 35% YoY and eCommerce channel now accounting for c.8.2% of India business sales, up from 2.5% in FY20.
- For the quarter, the international beverages business revenue grew 9%
- Tetley continued to gain share in the everyday black and specialty segments in the UK. A new variant- Tetley Gold Brew was launched to drive premiumization.
- Teapigs in the UK continued its strong growth trajectory led by good performance in out of home, exports and grocery channels.
- Eight O’ Clock coffee in the USA (K cups and bags) saw share gains and grew ahead of the category driven by distribution expansion and targeted promotions. The brand has partnered with International Woman’s Coffee Alliance in their mission to empothe company women in the coffee industry to achieve sustainable livelihoods.
- Teapigs continues to drive category growth in the USA and maintained momentum with its cold brew range. It emerged as the fastest growing specialty tea brand during the quarter.
- In Canada, the new Tetley D2C company site was launched. Tetley Super Teas continues to strengthen its presence with direct to home tea sampling and social media campaigns.
- Tata Starbucks recorded revenue growth of 238% for the quarter, albeit on a low base, led by normalized store operations with the company’s restrictions.
- Delivery channel salience remained ahead of pre-Covid levels.
- Opened 7 new stores during Q1 and entered four new cities – Jalandhar, Anand, Nagpur, and Calicut. This brought the total number of stores to 275 across 30 cities.
- As part of our commitment to sustainability, the company recently announced its sustainability strategy with holistic goals and targets. The company has also released Business Responsibility and Sustainability Report (BRSR) for FY ’22 audited by British Standards Institute (BSI), on a voluntary basis.
- As a testament to its sustainability credentials, Kanan Devan Hills Plantations (KDHP), an associate company of Tata Consumer Products has received Carbon Neutral certification and Negative Emission status by Nansen Environmental Research Centre (India).
- Tata Coffee Limited, a subsidiary company of Tata Consumer Products is Net Zero for Scope 1 and 2, audited and ratified by BSI and KPMG.
- Tata Consumer Products has been rated as India’s 4th most valuable brand in the food and beverage category in the Brand Finance India 2022 report.
- Tata Consumer Products was recognized for Growth Performance (F&B category) at Dun & Bradstreet corporate awards 2022.
- Tata Consumer Products’ corporate the company’s site won the 2022 IABC (International Association of Business Communicators) Gold Quill Award of merit in the communication skills for the company category.
- Tata Coffee Grand won a bronze at the ET Shark Awards for its regional Sounds of Pongal campaign.
Sunil D’Souza, managing director and CEO of Tata Consumer Products said, “The company delivered double digit revenue growth and improved profitability for the company despite a challenging macro environment and inflation impact in some of our categories.
The company recorded market share gains in both our core categories of tea and salt in India. Our new engines of growth- NourishCo, Tata Sampann, Tata Soulfull and Tata Q are making good progress and expanding their market presence. The company has significantly accelerated the pace of innovation with a number of new launches across categories aimed at expanding our portfolio and reaching new consumer segments. In terms of profitability, the company delivered an EBITDA margin expansion YoY, despite severe inflationary pressures in the salt business and significantly higher A&P.”
“Our transformation agenda continues to be on track. We have increased our reach substantially across channels while strengthening our sales & distribution infrastructure and our digital capabilities. We will continue to stay focused on driving growth and balancing margins in our quest to become a leading FMCG company.”
Tata Consumer Products is a focused consumer products company uniting the principal food and beverage interests of the Tata Group under one umbrella. The company’s portfolio of products includes tea, coffee, water, RTD, salt, pulses, spices, ready-to-cook and ready-to-eat offerings, breakfast cereals, snacks and mini meals. Tata Consumer Products is the 2nd largest branded tea company in the world. Its key beverage brands include Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand, Himalayan Natural Mineral Water, Tata Water Plus and Tata Gluco Plus. Its foods portfolio includes brands such as Tata Salt, Tata Sampann, Tata Soulfull and Tata Q. In India, Tata Consumer Products has a reach of over 201 million households, giving it an unparalleled ability to leverage the Tata brand in consumer products. The Company has a consolidated annual turnover of ~Rs. 12,400 crore with operations in India and International markets. Last 10-year financials are available on Historical financial data.
Some of the statements in this communication may be forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections, whether express or implied. These forward-looking statements are based on various assumptions, expectations and other factors which are not limited to, risk and uncertainties regarding fluctuations in earnings, competitive intensity, pricing environment in the market, economic conditions affecting demand and supply, change in input costs, ability to maintain and manage key customer relationships and supply chain sources, new or changed priorities of trade, significant changes in political stability in India and globally, government regulations and taxation, climatic conditions, natural calamity, commodity price fluctuations, currency rate fluctuations, litigation among others over which the company does not have any direct control. These factors may affect our ability to successfully implement its business strategy. The Company cannot, therefore, guarantee that the ‘forward-looking’ statements made herein shall be realized. The company, may alter, amend, modify or make necessary corrective changes in any manner to any such forward looking statement contained herein or make written or oral forward-looking statements as may be required from time to time on the basis of subsequent developments and events.