Tata Consumer Chairman Sees Long-Term Potential in India's Consumer Market


Tata Consumer Chairman Sees Long-Term Potential in India's Consumer Market
India’s expansive consumer market presents a significant long-term structural opportunity, driven by demographic advantages such as a youthful population, a rapidly growing middle class, swift urbanization, and rising disposable incomes, according to N Chandrasekaran, Chairman of Tata Consumer Products Ltd (TCPL). Addressing shareholders at the company’s annual general meeting, Chandrasekaran emphasized the robust growth of the Indian economy and outlined TCPL's strategic initiatives aimed at harnessing this potential.
Chandrasekaran observed that despite global economic challenges, characterized by volatile geopolitical conditions and supply chain reconfigurations, India has sustained impressive economic growth. He noted, “India's economy grew at a remarkable rate of 8.2% in fiscal 2023-2024, and this momentum is expected to persist, allowing India to maintain similar growth rates in the coming years”. He contrasted this with the global economic forecast, which anticipates growth of over 3% during 2024 and 2025.
Highlighting the dynamics of the consumer market, Chandrasekaran identified the expansion of India’s middle class as a pivotal factor. He projected that the middle class would increase from about 30% to 50% of the population by the decade’s end, equating to an additional 300 million individuals gaining greater purchasing power and driving consumption. Additionally, he pointed to rapid urbanization, increasing disposable incomes, and evolving consumer aspirations as critical elements contributing to the expansion of the market. He expressed confidence in TCPL's ability to leverage these trends, bolstered by the company's extensive distribution network and innovative product offerings.
TCPL’s recent acquisitions, including Capital Foods and Organic India, are strategic moves aimed at extending the company’s market reach and enhancing its portfolio in high-growth, high-margin segments. Chandrasekaran reported that TCPL has substantially scaled its distribution network, now reaching 4 million retail outlets across India, a significant increase since 2020. The company’s focus on innovation has led to a fivefold growth in revenue from new products since FY21, with these products now contributing 5% to overall sales, aligning with industry-leading benchmarks.
The Chairman also underscored the progress in TCPL’s digital transformation, which is enhancing operational efficiency and customer engagement. He noted the company’s solid performance in international markets and emphasized the ongoing expansion of Tata Starbucks, the joint venture with Starbucks, which opened a record 95 new stores in FY24, the highest number since the joint venture’s inception. This expansion underscores the growing acceptance of premium coffee culture in India.
Financially, TCPL reported a revenue of Rs 15,206 crores in FY24, reflecting a 10% growth. This performance highlights the company’s success following the merger of Tata Chemicals' consumer products business with Tata Global Beverages in 2020. With a robust portfolio including brands such as Tata Salt, Tata Tea, Tetley, and Tata Sampann, and an expanding presence through Tata Starbucks, TCPL is well-positioned to capitalize on India’s dynamic consumer market.
Chandrasekaran’s address underscores TCPL’s strategic readiness to harness India’s economic and demographic advantages. The company's focus on innovation, distribution expansion, and digital transformation positions it to seize emerging opportunities and drive sustainable growth in the fast-moving consumer goods sector. As India continues to urbanize and its middle class expands, TCPL aims to deepen its market penetration, reinforcing its role as a leading player in the consumer market landscape.