Tata Consumer | Latest market updates

Stocks
1

Tata Consumer Revamps Its Overseas Operations

Tata Consumer Products has started revamping its overseas business operations and is set to merge three of its subsidiaries in India to streamline its corporate structure.

Tata Consumer Products is an Indian fast-moving consumer goods company and a part of the Tata Group. Tata Consumer Products is an Indian fast-moving consumer goods company and a part of the Tata Group. It is the world’s second-largest manufacturer and distributor of tea and a major producer of coffee. formerly known as Tata Global Beverages Limited (TGBL), Tata Consumer Products was formed when the consumer products business of Tata Chemicals merged with Tata Global Beverages in February 2020.

Tata Consumer Restructures Overseas Business

Tata Consumer is restructuring its US operations by transferring the manufacturing and distribution of instant tea powder under Tata Tea Extractions and the Eight O’Clock coffee investments under Consolidated Coffee to Tata Consumer Products US Holdings (TCP-US). Following these transfers, Tata Tea Extractions and Consolidated Coffee will be dissolved.

Additionally, five entities in the US will be merged into TCP-US as part of the consolidation of the branded business. Once the restructuring is finalized, the US business will be wholly owned by Tata Consumer Products UK Group, a fully-owned 100% subsidiary of the Indian parent company. Tata Consumer expects this restructuring to be completed by December 31, as it has mentioned in its FY24 report

Merger of three subsidiaries In India

Tata Consumer is consolidating its Indian operations by merging three subsidiaries—Tata Consumer Soulfull, Tata SmartFoodz (both acquired in 2021), and NourishCo Beverages into itself. This consolidation aims to reduce the number of legal entities, streamline legal compliances, and achieve economies of scale. Additionally, Tata Consumer has completed the merger of Tata Coffee’s business with itself. At the same time, the coffee plantations segment has been separated from Tata Coffee and placed under Tata Consumer Products Limited(TCPL) Beverages & Foods.

Conclusion

This restructuring reflects a strategic move to streamline its global operations, thereby enhancing efficiency. With the consolidation of the manufacturing, distribution, and branded businesses in the US under TCP-US, Tata aims to strengthen its presence in the American market while simplifying its organizational structure at the same time. Similarly, merging subsidiaries in India with Tata Consumer also matches the company’s goal of reducing complexity. This comprehensive restructuring highlights Tata Consumer’s commitment to sustainable growth in both domestic and international markets.

Disclaimer: This blog has been written exclusively for educational purposes. The securities
mentioned are only examples and not recommendations. It is based on several secondary
sources on the internet and is subject to changes. Please consult an expert before making
related decisions.
2

Tata Consumer Positioned to Leverage India’s Growth Momentum, Says Chairman

In the recent Annual General Meeting, the Chairman of TCPL and Tata Sons, Mr. N Chandrasekaran highlights Tata’s position to leverage India’s growth momentum.

India’s consumer market has a long-term structural opportunity that is driven by several factors such as the rise in urban population, growing middle class, increase in disposable incomes, and rising aspirations. The global economic report published by the World Bank, recently noted that India remains to be world’s fastest-growing major economy globally and will sustain this growth momentum in the coming years. The global economic landscape, though, remains volatile with the current geopolitical scenario which is reshaping the supply chains, energy security, and overall resilience. The world economy is thus forecasted to grow by over 3% during 2024-25.

India’s growth:

India, however, has been going strongly with an economic growth rate of 8.2% for the fiscal year 2023-24. Even looking into the future, India should maintain similar growth momentum in the coming years. With the growth of the middle-class population of India, from about 30% to 50% by the end of this decade, opportunities in the economy have also grown.

Tata Consumer’s Strategic Position:

Taking into account all these factors, Tata Consumer Products Limited (TCPL) is now well-positioned to capitalize on this significant opportunity. The company aims to target high-growth and high-margin segments through its latest acquisition of Capital Foods and Organic India. Its logistics has also scaled the company’s distribution to reach 4 Million retail outlets in India, a two-fold increase since 2020. Certain new innovations, now contribute to 5% sale distribution in India. A 50:50 Joint Venture of Tata with Starbucks recorded a total 95 stores opened in a single year since inception.

About Tata Consumer Products Limited:

The company was formed in 2020 after the merger of the consumer products businesses of Tata Chemicals with Tata Global Beverages. The company, in FY24, recorded a revenue of Rs. 15,206 Crores with an annual growth of 10%. Headquartered in Mumbai, the company now operates in the food and beverage industry, with domestic sales making up 56% of the revenue and the rest coming from international businesses.

Conclusion: With the commitment to advance its digital transformation and enhance operational efficiencies, Tata Consumer Products Limited shows sustained growth with a strategic position to capitalize on the growth of the Indian Economy.