Mumbai: Tata Consumer Products LimitedThe food and beverage arm of the $103 billion Indian conglomerate is looking to go on an acquisition spree to strengthen its position in the country’s competitive consumer goods sector, and is in talks to buy five brands.
A “significant amount” of the Mumbai-based firm’s future growth will come from inorganic expansion, Bye Sunil D’Souza, Chief Executive Officer, Consumer Products, said in an interview. firm that sells tetley Tea & Eight O’clock Coffee is “seriously engaging” with several companies where it sees good valuations, he said, refusing to identify potential targets.
PepsiCo Inc. And D’Souza, who took over the company two years ago after working at Unilever plc, said, “We’re reaching potential targets to see if there’s interest.” “There are places where valuations are higher, but looking at the macro environment, liquidity, tightening etc., I am keeping my fingers crossed that they will become a lot more affordable.”
Since its formation in 2020 during the ongoing streamlining of Tata’s 153-year-old business empire that spans dozens of sectors, Tata Consumer Products has expanded its portfolio by buying stakes in companies such as the bottled water business Nourishco Beverages Ltd. has done. Cereal brand as Soulful.
The group may face stiff competition in the region from existing global giants such as Unilever as well as Indian tycoon Mukesh Ambani’s Reliance Industries Ltd, which plans to acquire 60 small grocery and home consumer goods brands within six months. is making. Reuters.
‘Giant Runway’
As India reopens after restrictions due to the pandemic, D’Souza is also accelerating the expansion of Starbucks Corp’s outlets across the country. It added 50 new cafes in the last financial year, taking it to 268 stores in 26 cities. Tata, which has a joint venture with the US coffee giant, wants to have 1,000-plus Starbucks outlets in India, D’Souza said, refusing to give a timeline for that goal.
“We have a huge runway in front of us in India,” he said. “Now the game is how fast can we scale?”
Tata’s expansion comes at a time of severe inflationary turmoil as the war in Ukraine, restrictions on national agricultural-commodities exports and supply-chains have raised input costs for consumer goods companies.
Unilever’s India unit and companies including domestic flagship firms Britannia Industries Ltd and Dabur India Ltd have reacted in a highly value conscious market of around 1.4 billion people by raising prices and cutting portion sizes of packs in their cheapest packages.
D’Souza said Tata has remained relatively stable in prices of its three main products, coffee, tea and salt, although the company feels there has been a “futile” increase in freight and packaging costs. ,
Economic and political turmoil on the neighboring island of Sri Lanka, a major black tea exporter, has kept tea prices stable. He said India is likely to have a good harvest this year, which would have forced tea prices to come down in general. But disruption in Sri Lanka has halted its exports, preventing a drop in prices.
“Everyone who is now exposed to wheat, sunflower oil, palm oil, I think they are bearing the brunt of it right now,” he said.
A “significant amount” of the Mumbai-based firm’s future growth will come from inorganic expansion, Bye Sunil D’Souza, Chief Executive Officer, Consumer Products, said in an interview. firm that sells tetley Tea & Eight O’clock Coffee is “seriously engaging” with several companies where it sees good valuations, he said, refusing to identify potential targets.
PepsiCo Inc. And D’Souza, who took over the company two years ago after working at Unilever plc, said, “We’re reaching potential targets to see if there’s interest.” “There are places where valuations are higher, but looking at the macro environment, liquidity, tightening etc., I am keeping my fingers crossed that they will become a lot more affordable.”
Since its formation in 2020 during the ongoing streamlining of Tata’s 153-year-old business empire that spans dozens of sectors, Tata Consumer Products has expanded its portfolio by buying stakes in companies such as the bottled water business Nourishco Beverages Ltd. has done. Cereal brand as Soulful.
The group may face stiff competition in the region from existing global giants such as Unilever as well as Indian tycoon Mukesh Ambani’s Reliance Industries Ltd, which plans to acquire 60 small grocery and home consumer goods brands within six months. is making. Reuters.
‘Giant Runway’
As India reopens after restrictions due to the pandemic, D’Souza is also accelerating the expansion of Starbucks Corp’s outlets across the country. It added 50 new cafes in the last financial year, taking it to 268 stores in 26 cities. Tata, which has a joint venture with the US coffee giant, wants to have 1,000-plus Starbucks outlets in India, D’Souza said, refusing to give a timeline for that goal.
“We have a huge runway in front of us in India,” he said. “Now the game is how fast can we scale?”
Tata’s expansion comes at a time of severe inflationary turmoil as the war in Ukraine, restrictions on national agricultural-commodities exports and supply-chains have raised input costs for consumer goods companies.
Unilever’s India unit and companies including domestic flagship firms Britannia Industries Ltd and Dabur India Ltd have reacted in a highly value conscious market of around 1.4 billion people by raising prices and cutting portion sizes of packs in their cheapest packages.
D’Souza said Tata has remained relatively stable in prices of its three main products, coffee, tea and salt, although the company feels there has been a “futile” increase in freight and packaging costs. ,
Economic and political turmoil on the neighboring island of Sri Lanka, a major black tea exporter, has kept tea prices stable. He said India is likely to have a good harvest this year, which would have forced tea prices to come down in general. But disruption in Sri Lanka has halted its exports, preventing a drop in prices.
“Everyone who is now exposed to wheat, sunflower oil, palm oil, I think they are bearing the brunt of it right now,” he said.