Persistent inflation likely to impact demand across categories, says TCPL Chairman Chandrasekaran

Photographer: Dhiraj Singh/Bloomberg

The current operating environment remains highly volatile and persistent inflation will likely impact demand across categories, Tata Consumer Products Ltd Chairman N Chandrasekaran said on Monday.

To navigate through these ”short-term bumps” in this uncertain environment, the company will focus on strong execution, maintaining agility and nimbleness,” he said while addressing shareholders at the annual general meeting (AGM).

Geo-Political tensions, supply chain challenges, and demand-supply mismatches in crude and several other commodities are driving persistent inflation, which will likely impact demand across categories.

”In this uncertain environment, we will continue to focus on strong execution, maintaining agility and nimbleness to adapt and navigate through short-term bumps; and more importantly to take advantage of opportunities that could arise during this period,” said Chandrasekaran, who is also the Chairman of Tata Sons, the holding firm of the Tata Group.

Terming the FY21 as a ”very eventful one”, Chandrasekaran said challenges posed by the pandemic and more recently, geo-political developments have resulted in a very volatile macro-environment with a wide-ranging impact on people, economies, and businesses.

”These unprecedented challenges have also thrown up opportunities for us to adapt to new ways of thinking, be agile and build for the future. This mindset has helped your company deliver strong overall performance,” he said.

TCPL has made significant progress – expanding distribution, accelerating the pace of innovation, redesigning the supply network and driving digital transformation across the value chain.

”These are investments we are making for the long-term and I am confident they will position us well for future growth,” he noted. Currently, TCPL, which was formed after merging the consumer products business of Tata Chemicals with Tata Global Beverages, is present in over 201 million households in India and distributes to over 2.6 million outlets.

”We have expanded our portfolio into the Ready-to-Eat category with the acquisition of Tata SmartFoodz and the business has been integrated with speed. Our growth businesses NourishCo, Tata Sampann, Tata Soulfull and Tata Q, collectively grew 52 per cent during the year and we are investing in these businesses to fuel them further,” he added.

On its JV Tata Starbucks, Chandrasekaran said despite the challenges posed by the pandemic, it opened 50 new stores last year, taking the total to 268 across 26 cities. ”Digital transformation across the organisation and the value chain is a key focus area for us and work on this is well underway,” he said.

Formed in 2012, Tata Starbucks is a 50:50 joint venture between Starbucks Corporation and TCPL. TCPL has launched several products across the foods and beverages portfolio, catering to consumer needs of health and wellness, taste, and convenience, which have also helped us expand our total addressable market, Chandrasekaran said.

”The contribution of innovation to sales has gone up 2X during the year,” he said. For the Financial year ended March 31, 2022, TCPL’s consolidated revenue was Rs 12,425 crore. For the Financial year ended March 31, 2022, TCPL’s consolidated revenue was Rs 12,425 crore.