TATA CONSUMER

PRODUCTS LTD.

INTRODUCTION
Tata Consumer Products Limited, formerly Tata Global Beverages Limited, is an
Indian multinational consumer goods company headquartered in Kolkata, West Bengal, India
and a subsidiary of the Tata Group. It is the world's second-largest manufacturer and distributor
of tea and a major producer of coffee.
Tata Consumer Products Limited markets tea under the major brands Tata Tea, Tetley and Good
Earth Teas. Tata Tea is the biggest-selling tea brand in India, Tetley is the biggest-selling tea
brand in Canada and the second-biggest-selling in United Kingdom and United States.
In 2012, Tata Consumer Products Limited ventured into the Indian cafe market in a 50:50 joint
venture with Starbucks Coffee Company. The coffee shops branded as "Starbucks Coffee—A
Tata Alliance" source coffee beans from Tata Coffee, a subsidiary company of Tata Consumer
Products Limited. As of 2020, the company's revenue stood at ₹5807.99 crore (US$810 million)
while its net income stood at ₹575.35 crore (US$81 million). 

VISION
To be the most admired natural beverages company in the world by making a big and lasting
difference in tea, coffee and water. To be a leading sustainable Consumer Product Company
serving customers based on quality. Sustainability is at the heart of company’s plans for long-
term success. As industry leaders, it is important for us to build a future-ready business that will
continue to meaningfully touch the lives of millions of people. Sustainable sourcing, waste
management and climate change are some of the key focus areas and through our various
environment and community focused initiatives, we intend to be the consumer’s first choice in
sustainable foods and beverages.

MISSION
We will become the preferred partner for our customers by creating world-class
products & differentiated solutions through innovation and leading-edge technology. We are on a
mission to create a premier diversified consumer products company. Our strengths lie in our
deep understanding of our consumers in India and in international markets, iconic market leading
brands and wide consumer reach. We are committed to delivering high-quality, innovative, tasty
and convenient products with goodness at its core. Our portfolio of products ranges from tea,
coffee, water and ready-to-drink to salt, pulses, spices, ready-to-eat and more.

VALUES
The five core Tata values underpinning the way we do business are:

Integrity
We will be fair, honest, transparent and ethical in our conduct; everything we do must stand the
test of public scrutiny.

Responsibility
We will integrate environmental and social principles in our businesses, ensuring that what
comes from the people goes back to the people many times over.

Excellence
We will be passionate about achieving the highest standards of quality, always promoting
meritocracy.

Pioneering
We will be bold and agile, courageously taking on challenges, using deep customer insight to
develop innovative solutions.

BUSINESS ENVIROMENT
Tata Consumer Products is a focused consumer products company uniting the food and beverage
interests of the Tata Group under one umbrella. It is home to key brands such as Tata Tea,
Tetley, Tata Salt and Tata Sampan. With a combined reach of over 200 million households in
India, it has an unparalleled ability to leverage the Tata brand in consumer products.

In the Beverages business, Tata Consumer Products is the second largest player in branded tea in
the world with over 330 million servings everyday across the world. Our brands include Tata
Tea, Tetley, Vitex, Eight O’clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand
and Joekels.

Beginning with the iconic Tata Salt that pioneered the crusade for iodization in India, our Foods
business is one of the most trusted food brands in India and we have extended our portfolio to
include salt variants and nourishing food items. With Tata Sampan we bring the traditional
wisdom of Indian food in a contemporary package to deliver the best of taste, nutrition and
convenience.

Tata Consumer Products has grown through innovation, strategic alliances and acquisitions, and
organic growth. The Company has a joint venture with Starbucks called Tata Starbucks Limited,
to own and operate Starbucks cafés in India. Since the inauguration of the flagship store in
Mumbai in October 2012, this 50:50 JV has expanded to 10 cities, with many more Starbucks
stores planned across the country.

The Company also has a JV with PepsiCo in India, called Nourish, which produces non-
carbonated ready-to-drink beverages that focus on health and enhanced wellness. Nourish
produces and markets Tata Water Plus — India’s first nutrient water, and Tata Gluco Plus — an
energizing, glucose-based flavored drink. Himalayan water is also marketed and distributed
through Nourish.

The high-growth contemporary 'single-serve' business is also an important play for Tata
Consumer Products. In the USA we have an agreement with Green Mountain Coffee Roasters’
Keurig single-serve machines for Eight O’clock Coffee, with K-Fee for MAP Coffee in
Australia, and with Tassimo in Canada for Tetley tea.

COMPETITORS:

The top 10 competitors in Tata Consumer Products' competitive set are Chai Point, Golden

Tips Teas, Tea box, Britannia, Nestle, Jubilant Food Works, DFM Foods, ITC, HUL and ADF
Foods.

CONSUMER BEHAVIOUR
As consumers progress beyond the phase of restricted living with the lockdown being eased in

many areas, mental models formed during the lockdown phase are likely to continue to drive

consumer behavior. Though the lockdown has eased, consumers’ minds could be in lockdown

mode for some time, says Tata Consumer Products official.

What consumers take away from their imposed isolation and the impact on their psyche could

well percolate to their consumption behavior, tempered by a new appreciation for consuming

less.

On health and nutrition

Apart from heightened concerns about health and nutrition, “convenience is also a key consumer

trend we are seeing - people wanting to buy and consume products that are convenient and easy

to store,” says Richa Arora(President, Packaged Foods(India) TCPL.

The company has seen a run on some of its products. “In the initial weeks there was a surge in

demand for both Tata Sampann unpolished dals (lentils) and the organic dals range, as well as

our ready-to-cook range of Nutrimixes such as 6 Grain Khichdi Mix, Multigrain Chilla Mix etc.

Now, as we move into the phase of ‘unlock down’, demand is coming back to normal levels,

though it remains marginally higher for some products,” adds Arora.

Immunity & health

Preventive healthcare is gaining more impetus among consumers, says the official, with

immunity and health high on consumers’ minds.

“For Tata Sampann masalas, which we launched a few years ago, we had changed the category

narrative, from masalas being just for taste, to showcasing their therapeutic properties and health

benefits. Tata Sampann Haldi has been at the forefront of our efforts, with the spotlight on

Curcumin, the active ingredient which helps deliver immunity boosting properties of turmeric,”

adds Arora.
Consumers also appear to be moving away from proactive health minded buying to reactive

health management. Covid-19 has altered consumer behavior, says the official, with a sharp

uptake in demand for home cooked meals: “traditional Indian foods that are healthy and

nutritious. The Tata Sampann brand at its core has always been about the ‘intersection of

traditional Indian wisdom and modern science’, and Tata Salt has been at the forefront of the

iodization programme in India. Both brands in the foods portfolio - Tata Sampann and Tata Salt -

are well poised to address the changing consumer landscape.”

Time to ACT

Noting that the FMCG sector has always been resilient in tough times, the official maintains it is

this quality that will help it bounce back. While the discretionary parts of FMCG may take

longer to get back on track, foods and essentials are already getting on track.

“We have to continue to ACT,” Arora points out, “That’s my shorthand for Agility, Creativity

and Innovation. One of the key learnings to emerge from the Covid phase is that agility and

ability to adapt will be more critical than ever before. Creative solutions, including direct-to-

home distribution models and new-age options such as selling through AI Bots/Tele-selling, will

get more prominence bringing in more efficiency in the system.”

Technology has been a savior during this phase. “Consumers have been moving to online and

digital solutions as well as contactless channels due to health and hygiene concerns, as well as

the increased convenience this offers. We will see many new models evolve due to changing

consumer needs and buying behavior,” adds Arora.

 STPD Strategy
Segmentation:

A similar set of needs and wants defines a particular market segment. Tata Tea recognises
different customer segments across regions, demographics, lifestyle and behaviours.

Geographic Segmentation:

Geographic segmentation takes into consideration the discernable preferences of customers, and
their purchasing behaviour within a particular region. The ability and resources to purchase,
availability, awareness and marketing support structure are issues that are relatively common
within a particular region.

Being a product with a high brand value and image and packaging and pricing superior to many
other products within the category, Tata Tea Premium is targeted at the semi-urban consumer
population living in Tier 1 and Tier 2 cities. Also, since these geographic regions are more
exposed to the various marketing campaigns, they also possess higher levels of brand awareness
which increases the trust they place in the brand and loyalty they maintain.

Demographic Segmentation:

 Age and Family Size: 20-40 years of age, small and large families in Tier 1 and 2 cities
 Income Group: lower and higher middle class groups
 Education: Well-educated, aware, politically and socially conscious, responsible and
aspiring citizens
 Gender: Family/home managers (specifically women)

Psychographic Segmentation:

 Convenience and comfort-seeking customers

 luxury-oriented customers
 customers active in social discourses and causes

Behavioural Segmentation:

The product focuses on segments that use the product on a regular basis and who are quality-
conscious, aware and informed, medium to heavy users, with medium to strong loyalty.
 Targeting:

The main target of Tata Tea premium is the middle class and upper middle class that accounts
for nearly 300 million people.  It also targets the youth encouraging them to embrace social
messages and positioning itself as a social awakener brand. It targets women, who are the
influencers and deciders in the buying process, especially the housewives, and appeals them to
exercise their power to vote in the electoral process.

Porter’s five forces model helps determine the long-run attractiveness of the market or market
segment.

1. Threat of intense segment rivalry: Tata Tea faces intense competition from the local
brands, Brooke Bond Taj Mahal, Wagh Bakri, Red Label Special in the segment it targets. This
is combated by emotionally appealing, incredible promotional and social campaigns and
advertising.
2. Threat of new entrants: Foreign Direct Investment and untapped rural marketing. Tata
Tea tried tapping into the rural areas through the ‘Gaaon Chalo’ campaign, an initiative to
improve its rural distribution.
3. Threat of substitute products: Various categories that cater to rejuvenation and freshness
such as coffee, aerated drinks and energy drinks.
4. Threat of buyer’s growing bargaining power: The wide array of options available in the
market, offering at lower prices has facilitated the growing bargaining power. This threat is
subsided by the brand communication strategy and superior quality of the product.
5. Threat of suppliers’ growing bargaining power: With a large number of producers in the
tea industry offering a range of benefits to the supplier and low switching costs, the suppliers
have increased bargaining power. This threat is minimised by selling the tea packages via
various suppliers and some themselves too.

Positioning:

Tata Global Beverages positions itself as a ‘Good For You’ beverage brand.

Tata Tea positions itself as a young and vibrant brand. The message they wish to convey through
their cause marketing campaigns is “being the change that we want to see”.

In one of the interviews by Sanjiv Sarin, regional president, South Asia, Tata Global Beverages,
said, “While tea may wake you up, Tata Tea awakens you. The campaign demonstrated Tata
Tea’s thought leadership in positioning tea as a medium of ‘social awakening’ and not just
‘physical awakening’
 Product and Branding Strategy

Tata Consumer Products Limited is a focused consumer products company uniting the principal
food and beverage interests of the Tata Group under one umbrella. It was formed after a de-
merger of the consumer businesses Tata Chemicals Limited and Tata Global Beverages Limited.
The formation of Tata Consumer Products Limited marks a new strategic direction, an
accelerated expansion into India’s fast-moving consumer goods (FMCG) market, while
maintaining a leading and strategic presence in the international beverages market.

To mark this landmark decision, Tata Consumer Products partnered with Landor to brand a
company that is future-forward and keeps people, planet and profit at the helm.

The complementary attributes of both consumer products companies and the Tata brand gave
Tata Consumer Products a strong head start into creating a unified proposition that was carefully
crafted by Landor. Unleashing the power of the brand by empowering consumers who are
striving to do more every day, Landor designed the strategically sound positioning “For Better,”
which was translated into a distinct look and feel system that incorporates a blue and green wave.

Tata Consumer Products Limited is a focused consumer products company uniting the principal
food and beverage interests of the Tata Group under one umbrella. It was formed after a de-
merger of the consumer products business of Tata Chemicals Limited into Tata Global
Beverages Limited, under a scheme of arrangement which was sanctioned by the tribunal in
January 2020; the scheme became operational on 7 February 2020. The company’s portfolio of
products includes tea, coffee, water, salt, pulses, spices and ready-to-eat offerings. Tata
Consumer Products is the second largest branded tea company in the world; over 300 million
servings of its beverage brands are consumed every day across the globe. Its key brands include
Tata Tea, Tetley, Eight O’clock Coffee, Tata Coffee Grand and Himalayan Natural Mineral
Water. Its foods portfolio includes brands such as Tata Salt and Tata Sampann. In India, Tata
Consumer Products has a reach of over 200 million households, giving it an unparalleled ability
to leverage the Tata brand in consumer products. The company has an annual turnover of ~Rs.
10,000 cr and employs 2,200+ people in its branded business workforce.
 PRICING STRATEGY

Competitive pricing is the platform of prices for Tata consumer products. A plethora of tea
players in India given that India is a major tea producer of the world, hence Tata tea has always
been the trend setter when it comes to pricing where other companies usually follow it.
Differential pricing is also done by Tata Global Beverages. With so many varieties and quantities
of each product it is only expected that there is variation in prices of different products. Tata tea
premium for example is a premium segment tea range and is priced higher than its other products
at more than Rs.500 for a one kilo pack. Offer/incentive pricing also helps the brand grow. Tata
Tea usually also adopts incentive pricing model to entice its customers to buy its products during
festivities and also to keep a check on its competitors. Value-for-money products are the focus
and hence Tata consumer products doesn’t shy off before launching high priced products but
they are also quite better in their overall quality.
All companies of the Tata group function independently, under its own set or board of directors.
All these companies are unique and distinct from each other. Therefore, the pricing strategy in its
marketing mix followed by all these are individual company decisions as they are all in different
industries facing different economic factors, capital, scale, etc. The Tata group is definitely the
market leader given his market share of US $ 116 billion, there it follows a differential pricing
strategy to capture and maintain its market share. Tata Group is a holding company of more than
hundred different companies that deal in completely unique businesses. This conglomerate is
was first setup in Mumbai and was found by Jamshedji Tata in 1868. Tata group has a revenue
of US$ 100+ billion in financial year 2016. The name Tata is synonymous with trust and stability.
The Tata Group conglomerate has lasted for a century and a half. The scale of its operations
grew to global scale and went on to acquire many global giants.
 DISTRIBUTION STRATEGY

Tata Consumer Products produces a variety of products and is also the largest tea player
in India quite naturally both its procurement and supply chain are very robust and adept
at swift changes. It manufactures around 6.5 crore Kilograms of tea in India alone per
year. Its packaging and procuring and other activities employ a total of more than
50,000+ people. Tata consumer products major procurement of tea occurs from
Darjeeling, Assam and Kerala where it is available cheaply as its manufactured there
after which Tata Tea packs the products and distributes it. It has a multi-channel
distribution network which retailers, supermarkets, kerana shops, high end shops, major
online players like Amazon, etc. and an efficient online shop via its website. One of the
very few companies who does all the activities like processing, growing, packaging,
distribution and sales all by itself. Tata consumer products operates today in more than 45
countries in the world, has more than 50 tea estates and has 10 blending and packing factories in
India.

Tata Consumer embraces digital distribution, cuts ties with dealers, distributors:

Tata Consumer Products (TCPL), the new entity formed by the merger of Tata Global
Beverages and the consumer products division of Tata Chemicals, has terminated contracts with
most of its distributors and dealers to make way for digital distribution of its products
including Tata Salt, Tata Sampann, Tata Tea, Tetley, Eight O'clock Coffee and Himalayan water.
According to sources, TCPL severed its long-standing contract with 40 nationwide distributors
and 5,000 dealers to try the direct dealership strategy, at which the FMCG giant Hindustan
Unilever (HUL) excels.
TCPL confirmed about its new strategy, but didn't disclose the numbers. "As part of the
integration, when we reviewed our sales and distribution structures, we realised that it was
critical for us to leverage digital technology and work with our stockist  and dealer network
directly to increase our distribution footprint and in store-execution in the market. This resulted
the termination of a very small number of CAs and distributors of the company, making TCPL
more in line with the way most FMCG companies in India operate," the company said in its
reply to Business Today.
It said, "We are in the process of integrating the food and beverage businesses of Tata Consumer
Products in India, which will result in benefits such as stronger processes and scale efficiencies. 
This is essential for us to accelerate growth and fulfill the market opportunity in India for Tata
Consumer Products."

Another distributor said that they are consulting the trade unions to escalate the issue. "We have
been supporting the company since its Tata Tea (earlier name of the company) days. There are
second and third generation distributors among us. It is completely unfair to severe the
relationship in such an unceremonious way," he said.
 COMMUNICATION STRATEGY

TATA TEA JAAGO RE:

Tata Tea’s award winning Jaago Re campaigns has, over the years, become synonymous with
‘Awakening’ individuals and inspiring them to be the change they wish to see around them by
addressing serious issues like voting, corruption, gender sensitization and lack of sporting
culture. Making its debut in 2007, the campaign began with a television commercial which
showed a young man questioning a local politician campaigning for votes before offering him a
cup of tea. Striking a chord with the youth, the campaign launched a series of advertisements
over the last 13 years that have woven in the themes of awakening and pre-activism in the Indian
civic consciousness.

TATA SALT:
On Global Iodine Deficiency Day (21st October), Tata Salt launched #MissingI, a multi-media
campaign that grabbed the attention of the nation. The campaign had the letter ‘I’ eliminated
from tweets, news, headlines in print and on TV News Channels to create awareness and
establish the importance of Iodine in daily diet. The campaign was a huge success, garnering
almost 90 million impressions with live tweets from Indian celebrities and influencers reiterating
the message of the missing “I”.
Another campaign by Tata Salt on Gandhi Jayanti (2nd October) had the brand paying homage
to Mahatma Gandhi with the hastag #BapuReminder. Passers-by on Mahatma Gandhi Road,
Mumbai, were nudged by Bapu’s voice through a targeted sound-beam technology from a 6 ft x
4 ft LED Screen with Bapu’s image on it. The intrigued passers-by then went on to interact with
the digital billboard which involved Mahatma Gandhi’s voice asking, “Mahatma Gandhi Road se
guzar rahe ho, lekin kya mere bataye hue raaste pe chalte ho?” (You walk on Mahatma Gandhi
Road, but do you follow the path of Mahatma Gandhi’s teachings?) The screen would then
reflect a beach littered with garbage, and as they look at Bapu’s eyes, visuals of the littered beach
transforms into a clean beach. People are then prompted to take a pledge to keep the city clean,
in keeping with one of Gandhi’s key teachings, ‘Cleanliness is next to Godliness.’

GAON CHALO (ROUTE TO MARKET)

Close to 70% of India's population lives in its villages. This large rural market presents great
opportunity for growth. The challenge is to adopt a sustainable yet cost effective model to
leverage rural India's potential.
Gaon Chalo has three levels of Channel Partners: Rural Distributors, Mobile Rural Distributors
and Rural Dealers. We also involve Self Help Groups (SHGs) for deeper penetration and the
possibility of impacting the lives of a larger number of people.
Our efforts have transformed the lives of many. Besides enabling social change, the Gaon Chalo
model has several business advantages which include limited fluctuations in sales due to direct
access to the rural retailers, creating a cost-effective brand building platform and the flexibility to
address the complexities of local markets.
From beginning in Uttar Pradesh in 2007-08, this unique initiative in last mile distribution is now
in over 90,000 villages, serving as a strong platform for generating rural employment for youth,
women, the underprivileged, differently abled and SHGs.
CHALLENGES FACED BY THE COMPANY DUE TO COVID PANDEMIC

Tata Consumer Products, formerly known as Tata Global Beverages, revealed information on the
aftermath of COVID-19 pandemic on its Indian and international operations.

The company's Indian operations were stopped mid-March and partially resumed in the start of
April. As the government started easing out the lockdown situation, the company began evolving
its structure into new scopes including an innovative supply chain and partnering with e-
commerce players to reach the customers directly. In fact, some of the company's other units
falling under essentials have been operational throughout, including tea packaging units, pulses,
salt and spices.

In terms of its joint venture with Starbucks, the company has now reopened 40 per cent of the
outlets, but only for takeaway services. The revenue from another joint venture with Nourish
Beverages has taken a fall as most of the products are being consumed from home. And now,
after lockdown and curfew situation has almost been lifted by May end, the company's revenues
are slowly returning to normal. Their tea and coffee plantations in India have begun working at
full capacity.

In case of its international operations, the company witnessed higher demand for tea and coffee
supported by increasing in-house use. Nonetheless, its out-of-home business has been adversely
affected in US and Australia.

On the profitability front, company has stated that short-term profitability may suffer because of
rising input costs on account of volatile commodity prices and supply constraints.

Tata Consumer Products has recently released its financial numbers for Q4FY20. Its
consolidated revenue from operations for the year grew by 33 per cent to Rs 9,637 crore.
Consolidated EBITDA for the year rose by 56 per cent to Rs 1,310 crore. Company has also
declared a dividend of Rs 2.70 per share for FY20.

Tata Consumer Products' stock opened on BSE at Rs 368 today.

 REFERENCE

1. GOOGLE.COM
2. www.tataconsumer.com
3. www.economictimes.com