Sometime last month, the Tata Group did something that’s quite uncharacteristic. It bought millets-based cereal and snacks brand Soulfull for Rs 156 crore ($21.5 million). Uncharacteristic because the brand—trendy, urban, premium—is everything one wouldn’t usually associate with the 153-year-old conglomerate.
The acquisition is just the latest in a series of moves that the Tata Group has made recently in its quest to climb the FMCG ladder.
As far as instantly recognisable household brands go, it doesn’t get better than Tata Salt and Tata Tea. They have been around for decades and are the #1 and #2 in their respective categories. They’re also among the first brands that come to mind when you think of the Tata Group.
However, despite the reputation, the Tata Group isn’t a force to reckon with in fast-moving consumer goods (FMCG). Instead, the sector is synonymous with the likes of Hindustan Unilever (HUL), ITC, Nestle, and Britannia.
Perhaps that’s what prompted N Chandrasekaran, the chairman of Tata Sons—the group’s holding company—to merge merge Mint Tata puts all its food business on a single platter Read more the foods business under Tata Chemicals with Tata Global Beverages in 2019. The former includes Tata Salt and pulses and spices brand Tata Sampann, while the latter is home to Tata Tea, Tetley Tea, Tata Coffee, and Himalayan Water. The merger resulted in a rechristening—Tata Global became became BloombergQuint Tata Global Beverages Renamed As Tata Consumer Products Read more Tata Consumer Products (TCPL) a year ago.
“Chandra had a very clear view that Tata was under-indexed as far as the India consumer story was concerned,” says a former senior executive with TCPL. They, other former employees, and TCPL distributors quoted in the story requested anonymity as they did not want to publicly comment on the company.
The idea behind the merger was to give Tata much-needed ammunition to take on its larger rivals. “Tata wants TCPL to be the group’s torchbearer in FMCG,” says Manoj Menon, head of research at broking firm ICICI Securities.
With the merger completed, Tata is looking to go from an FMCG tortoise, plodding along seemingly mindless of the competition, to attempting to emulate the proverbial hare.
It appointed Sunil D’Souza as managing director and chief executive of TCPL in December 2019. D’Souza, who took charge in April 2020, is a former MD of appliance maker Whirlpool India and a longtimer at beverage and snacks giant PepsiCo. Then came the decision to make TCPL’s distribution leaner by removing around 60 super stockists or consignee agents, a legacy layer between the company and its distributors.