‘Markets witnessing significant shifts in consumer behaviour, business models' says Tata Consumer Products
Geopolitical uncertainties, shifts in global supply chains, advances in generative AI, and climate events continued to test business resilience, said P.B. Balaji, Non-Executive, Non-Independent Director, Tata Consumer Products.
Global growth was expected to moderate in the near term, with the IMF forecasting a 2.8% expansion for emerging markets in 2025, he said, adding advanced economies continued to grapple with inflation and tight financial conditions, but emerging markets—especially India—stood resilient. India remained one of the fastest-growing large economies in the world, with GDP growth estimated at north of 6%.
''We are navigating through a world that is both dynamic and demanding. Yet, even amidst this volatility, we find ourselves at a unique moment in history—where innovation, transformation, and consumption-led growth are converging,'' he said while speaking at the company's Annual General Meeting on Wednesday.
In his speech he said, against this backdrop, markets were also witnessing significant shifts in consumer behaviour and business models. For instance, consumers were becoming more health-conscious; there was a clear trend towards premiumisation, even in staples; with urbanisation, time-constrained consumers were seeking convenience, leading to rising demand for cooking aids, ready-to-drink beverages, and snacking, he observed.
Distribution, he further said, was being reshaped by quick commerce, but physical retail remained deeply relevant. Also, digital-first marketing and hyper-personalisation were rewriting the brand playbook. At the same time, Artificial Intelligence was rapidly transforming every function—from demand forecasting and content generation to inventory optimisation and pricing intelligence, he told the shareholders.
Tata Consumer Products saw quantum growth in last 5 years
On the growth of Tata Consumer Products, Mr. Balaji said, when Tata Consumer was formed, five years ago, it had a largely single category footprint—Tea and Coffee and today the company has gone through a significant transformation to become one of the fastest-growing FCB companies in India, operating across multiple categories and brands.
`Innovation is a critical muscle for an FMCG company and over the last 5 years, we have significantly scaled our innovation efforts, launching 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,'' he claimed.
According to him, digital was no longer a vertical – it was embedded across how the company operated, went to market and engaged with millions of consumers. ''We have deployed several high-impact AI use cases across sales, marketing, sourcing and RCD (Residual Current Device). Companies that embed AI deeply into operations will lead the next phase of value creation.''
Focus on grooming internal talent
Balaji further said, at the heart of the company's transformation was a strong focus on building a future-ready organisation—one that was agile, inclusive, and deeply aligned with purpose.
''We are taking a deliberate approach to grooming internal talent - this includes creating structured leadership pipelines, cross-functional learning experiences, and long-term capability building,'' he said.
According to him, the company's goal is clear: to nurture talent from within and build an organisation that leads not just today, but into the future. ``This roadmap is already delivering results—and it positions us well for what lies ahead. We see opportunity in creating an FMCG powerhouse and building brands of tomorrow for the modern Indian and global consumer.''
Tata Consumer Products' investments in AI, talent, and digital ecosystems would help it operate with greater precision and speed, Mr. Balaji added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
39 minutes ago
- Mint
Tata Starbucks profitable at store level, but rapid expansion deepens losses
Coffee chain Starbucks, which operates in India via a 50:50 joint venture with Tata Consumer Products Ltd (TCPL), is seeing store-level profitability, but rapid expansion is hurting its profitability, a top Tata Group executive said. 'While the individual Starbucks stores are indeed profitable, we're currently in an investment phase. This explains the discrepancies you're observing in our financial outcomes," said P.B. Balaji, group chief financial officer of Tata Motors and non-executive director of Tata Consumer Products, while addressing shareholders at the company's 62nd Annual General Meeting on Wednesday. Also read: Europeans grab Indian coffee as exports double in a decade The joint venture, Tata Starbucks Pvt. Ltd, now operates 479 stores across 80 cities, having opened 58 new outlets and entered 19 new cities, including tier-2 markets, in FY25. The company marked a major milestone this year by reaching 100 stores in Mumbai and 50 in Bengaluru. 'We are focused on market expansion at this point, and therefore, there are a lot of store additions happening. Same-store profitability is under control, and most of the losses that you see are because of the expansion we are undertaking," Balaji said. 'The individual stores are profitable, but of course, we are in the investment phase, and therefore, that is the reason why you are seeing the difference." Sunil D'Souza, the managing director and chief executive officer of Tata Consumer Products, also commented on Starbucks' performance, highlighting sequential growth throughout the year. 'The revenue for the year grew by 5%. Growth has improved sequentially, growing 7% in the second half versus 3% in the first half," D'Souza said. Also read: Costa Coffee sees India becoming one of its top-five markets Despite positive unit-level performance, Tata Starbucks posted a ₹135.7 crore net loss in FY25, up 65% from ₹82 crore in FY24. Revenue rose by just 5% to ₹1,277 crore, weighed down by weakness in the quick service restaurant (QSR) sector during the first half of the year. 'The newer stores are still in their gestation phase and haven't turned profitable yet. As a result, they're dragging down overall margins in the short term," said an equity research analyst based in Mumbai, requesting anonymity. TCPL absorbed over ₹67 crore of the total loss, in line with its 50% stake in the venture. The company remains optimistic about the long-term potential of the Starbucks brand in India. 'We remain committed to increasing our store base in India and reaching 1,000 outlets by FY28," it said in its annual filing. Also read: Coffee recall alert: FDA warns of mislabeled ground coffee sold in 15 states—Find out if yours is affected 'Coffee demand is clearly growing in India, especially among young consumers, and Starbucks is well-positioned to benefit from this shift," said the analyst cited earlier. India's coffee retail market is intensifying, with Cafe Coffee Day operating over 430 outlets and Barista Coffee running over 400 stores. Emerging players like Third Wave Coffee and Blue Tokai Coffee Roasters are rapidly expanding their presence across the country.
&w=3840&q=100)
Business Standard
5 hours ago
- Business Standard
Tata Consumer products keeps its 'antennae up' for strategic buys
Tata Consumer Products was witnessing a significant shift in consumer behaviour and business models as customers were increasingly becoming more health conscious and seeking organic options, P B Balaji, non-executive, non-independent director at the fast-moving consumer goods (FMCG) unit of the Tata group, told shareholders at the company's annual general meeting (AGM) here on Wednesday. Balaji chaired the AGM as the group's Chairman N Chandrasekaran was in New Delhi in connection with the relief operations following last week's Air India crash. Talking about the B787 crash in Ahmedabad, Balaji said in his opening address: 'To lose a single person, we know, is a tragedy but for so many deaths to occur at once is incomprehensible. This is one of the darkest days in the Tata group's history. Words are no consolation right now but our thoughts are with the families and the loved ones of the people who died and who were injured in the crash. We are here for them.' 'India remains one of the fastest growing large economies in the world, with GDP (gross domestic product) growth estimated at north of 6 per cent. Against this backdrop, we are witnessing significant shifts in consumer behaviour and business models. Consumers are becoming more health-conscious, seeking better-for-you and organic options. There is a clear premiumisation trend, even in staples,' he said. While talking about acquisitions, Balaji said, " You have your antennas up. 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 sizable amount of gunpowder with us, and therefore growing organically will be the first focus, and inorganic growth will be more bolt on." Balaji added that distribution was being reshaped by quick commerce (qcom) but physical retail remained deeply relevant. 'At the same time, artificial intelligence (AI) 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,' he said, adding: At Tata Consumer, we are leveraging these trends with a bold strategy, disciplined execution, and an ambition to build a future-ready FMCG powerhouse.' Five years ago when the company was formed, Balaji said, it had a largely single-category footprint of tea and coffee. In the five years, it has undergone a significant transformation and today the company was among the fastest-growing F&B (food and beverages) companies in India, operating across multiple categories and brands. He also said that innovation was a critical muscle for an FMCG company, and over the last five years, Tata Consumer had significantly scaled its innovation efforts, launching over 150 products, and its innovation-to-sales ratio had grown from 0.8 per cent in 2019-20 (FY20) to 5.2 per cent in FY25, which was among the best in the industry. 'Digital is no longer a vertical. It is embedded across how we operate, go to market and engage with consumers. We have deployed several high-impact AI use cases across sales, marketing, sourcing, and R&D (research and development),' Balaji said. He also said that the company has continued to strengthen its execution on emerging channels, with ecommerce (ecom) contribution growing over five times, enabled by exponential growth in qcom. 'As we look to the future, we are deepening our focus on quick commerce, pharmacy, and food services as high potential emerging channels,' he told shareholders. 'We see opportunity in creating an FMCG powerhouse and building brands of tomorrow for the modern Indian and global consumer. Our investments in AI, talent, and digital ecosystems will help us operate with greater precision and speed,' he said. Answering shareholders' questions on Starbucks, Balaji said the company was focused on market expansion at this point in time and, therefore, there were many store additions. 'Same store profitability is under control, and most of the losses that you see is because of the expansion that you're seeing in terms of stores that are being put in place,' he added.
The Hindu
8 hours ago
- The Hindu
‘Markets witnessing significant shifts in consumer behaviour, business models' says Tata Consumer Products
Geopolitical uncertainties, shifts in global supply chains, advances in generative AI, and climate events continued to test business resilience, said P.B. Balaji, Non-Executive, Non-Independent Director, Tata Consumer Products. Global growth was expected to moderate in the near term, with the IMF forecasting a 2.8% expansion for emerging markets in 2025, he said, adding advanced economies continued to grapple with inflation and tight financial conditions, but emerging markets—especially India—stood resilient. India remained one of the fastest-growing large economies in the world, with GDP growth estimated at north of 6%. ''We are navigating through a world that is both dynamic and demanding. Yet, even amidst this volatility, we find ourselves at a unique moment in history—where innovation, transformation, and consumption-led growth are converging,'' he said while speaking at the company's Annual General Meeting on Wednesday. In his speech he said, against this backdrop, markets were also witnessing significant shifts in consumer behaviour and business models. For instance, consumers were becoming more health-conscious; there was a clear trend towards premiumisation, even in staples; with urbanisation, time-constrained consumers were seeking convenience, leading to rising demand for cooking aids, ready-to-drink beverages, and snacking, he observed. Distribution, he further said, was being reshaped by quick commerce, but physical retail remained deeply relevant. Also, digital-first marketing and hyper-personalisation were rewriting the brand playbook. At the same time, Artificial Intelligence was rapidly transforming every function—from demand forecasting and content generation to inventory optimisation and pricing intelligence, he told the shareholders. Tata Consumer Products saw quantum growth in last 5 years On the growth of Tata Consumer Products, Mr. Balaji said, when Tata Consumer was formed, five years ago, it had a largely single category footprint—Tea and Coffee and today the company has gone through a significant transformation to become one of the fastest-growing FCB companies in India, operating across multiple categories and brands. `Innovation is a critical muscle for an FMCG company and over the last 5 years, we have significantly scaled our innovation efforts, launching 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,'' he claimed. According to him, digital was no longer a vertical – it was embedded across how the company operated, went to market and engaged with millions of consumers. ''We have deployed several high-impact AI use cases across sales, marketing, sourcing and RCD (Residual Current Device). Companies that embed AI deeply into operations will lead the next phase of value creation.'' Focus on grooming internal talent Balaji further said, at the heart of the company's transformation was a strong focus on building a future-ready organisation—one that was agile, inclusive, and deeply aligned with purpose. ''We are taking a deliberate approach to grooming internal talent - this includes creating structured leadership pipelines, cross-functional learning experiences, and long-term capability building,'' he said. According to him, the company's goal is clear: to nurture talent from within and build an organisation that leads not just today, but into the future. ``This roadmap is already delivering results—and it positions us well for what lies ahead. We see opportunity in creating an FMCG powerhouse and building brands of tomorrow for the modern Indian and global consumer.'' Tata Consumer Products' investments in AI, talent, and digital ecosystems would help it operate with greater precision and speed, Mr. Balaji added.
