TCPL Expands into Pharma, Oriental Cuisine with Acquisitions

New Delhi, Jan 14 (PTI) Tata Consumer Products Ltd (TCPL) now plans to tap pharma channels as the acquisition of Organic India would provide a "fully rounded portfolio" combined with healthy offering from its own brands, said MD and CEO Sunil D'Souza on Sunday.

Also, the acquisition of Capital Foods, which has brands including Smith & Jones and Ching's Secret, will address the western cuisine and 'desi Chinese' flavours, which it plans to extend to the oriental cuisine space, he said.

Combined with its own brand Sampann, under which it offers Indian food and spices, TCPL now aims to offer a wide gamut of the Indian culinary palate with Ching's Secret, and Smith & Jones.

"We now have the brands that were required to address the entire portfolio of the Indian consumer's cuisines per se," D'Souza told PTI.

On the other hand, with Organic India, TCPL will enter into the nutraceutical supplement space.

"So between the tea infusions, which add to the premiumisation agenda on our portfolio in our base business and entering a completely new category of nutraceuticals, that is the sweet spot with the being," he said.

This provides an opportunity to become a formidable player in herbal infusions and herbal and traditional supplements, which are fast-growing and high-margin businesses. Besides, it provides an opportunity to expand into other nutrition categories.

This also provides TCPL access to pharma retail channels, which has emerged as an alternative for the FMCG industry after the pandemic, selling products from health supplements to shampoo and soaps.

"So we already have in our portfolio brands like Tetley, GoFit (plant protein powder), Soulfull (healthy millet-based Snacks) which can sell in the pharma channels but we never had a fully rounded portfolio which can actually address this channel.

"Now with with the infusions and the nutritious supplements portfolio of Organic India, we will start looking at how we create a go-to market for the pharma channel. That is what is yet to be done," said D'Souza.

Last Friday, TCPL announced complete acquisition of Capital Foods at an enterprise valuation of Rs 5,100 crore and Fab India-backed Organic India, which operates in the health and wellness category, at an enterprise value of Rs 1,900 crore.

Over the growth in the Indian market, D'Souza said it is coming back but not like in the pre-COVID times.

The FMCG sector went through a significant price hike due to inflation, however, now prices are coming down and expansion is happening.

"We see broadly costs remaining flat. I think the game is to drive volume increases. We are seeing green shoots but too early to say we are out of the woods yet," he said.

TCPL is also expanding its network by increasing its direct reach. To deepen its penetration in smaller cities, it has now appointed more distributors in towns.

Currently, TCPL is getting around 9 per cent of sales from e-commerce and has also plans to expand its D2C (direct to consumer) business, in which it had decent success, he said.

When asked whether TCPL has plans to enter into the HPC (Home & Personal Care) segment, D'Souza said in the long term it has plans but it will take time.

"In the long term, yes. We will not get from where we are to a full FMCG in one shot," he said adding, "We are just a three-and-a half year old company. We still have a long way to go. We do aspire to be a large FMCG but one step at a time."

TCPL is right now focused on the food and beverage space, which has "huge opportunities" and high margins.