Tata Consumer Products keeps its ‘antennas up’ for strategic acquisitions | Company Business News

New Delhi: Packaged consumer goods company Tata Consumer Products (TCPL) on Wednesday reaffirmed its commitment to strategic acquisitions to complement its primary focus on organic growth, as it navigates evolving consumer demands for healthy and convenient options.

“We always are in the market. We have our antennas up, and if there’s something sensible at the right price, and it fits in well with our portfolio, we will do that,” P. B. Balaji, non-executive non-independent director at TCPL, said while addressing shareholders virtually at the company’s 62nd Annual General Meeting (AGM). “Rest assured, we have a sizeable amount of gunpowder with us, and, therefore, growing organically will be the first focus; inorganic growth will be more bolt-on (acquisition) rather than anything transformative at this point in time, unless of course something dramatically different comes up,” Balaji added.

In FY24, the company acquired Ching’s Secret maker Capital Foods aside from Organic India.

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Meanwhile, Balaji said consumer trends in India are evolving with shoppers turning more health conscious.

“Global growth is expected to moderate in the near term, with the IMF forecasting a 2.8% expansion in 2025. India remains one of the fastest growing large economies in the world with a GDP growth estimate north of 6%. Against this backdrop, we are witnessing significant shifts in consumer behaviours and business models. Consumers are becoming more health conscious, seeking ‘better for you’ and organic options. There’s a clear premiumization trend, even in staples,” he said.

This is prompting consumers to look for convenience, leading to rising demand for cooking aids, ready-to-drink beverages and snacking.

The International Monetary Fund in its April World Economic Outlook report said that India is expected to grow at 6.2% in 2025, and 6.3% in 2026, well ahead of China. It has also forecast India to replace Japan as the world’s fourth-largest economy this year.

US Tariffs

Additionally, the company addressed concerns around the US tariffs given the company’s exposure to overseas markets. 

40% of Organic India sales are generated in the US, with Capital Foods contributing 10% from the same market. It also sells tea, salt and coffee in the US.

“The tariff will cause some amount of demand stress. From a competitiveness perspective, everybody’s equally impacted, so not much on that particular front. We’ve been holding pretty steady on our Eight o’Clock coffee shares, and in the last two quarters, we’re also seeing healthy growth in that portfolio,” he said.

TCPL reported consolidated revenues of ₹17,618 crore in FY25. However, net profit declined 17% to ₹1,252 crore, marking a 17% decline year-on-year.

Beyond its flagship tea and salt products, the company sells packaged water, pulses, snacks, coffee, dry fruits, condiments, cereals and spices.

Quick-Commerce

The company is actively adapting to the rapidly changing retail landscape, where quick commerce is “reshaping” distribution; however, physical retail remains important, he said.

“The digital-first marketing and hyper personalization are rewriting the brand playbook. At the same time, artificial intelligence is rapidly transforming every function from demand forecasting, content generation, inventory optimization and pricing intelligence. Companies that embed AI deeply into operations will lead the next phase of value creation,” Balaji said.

Currently, e-commerce contributes 13% to TCPL’s overall India business.

The company is focusing on high-potential emerging channels such as quick commerce, pharmacy and food services to further expand its digital footprint.

“Over the last five years we’ve launched over 150 products—our innovations to sales ratio has now gone up to 5.2% from the lows of 0.8%. We have quadrupled our direct reach over the past five years to over 2 million outlets with a total reach of 4.4 million outlets. We have strengthened our execution on emerging channels with e-commerce contribution, growing greater than 5x, enabled by the exponential growth in quick commerce,” he said.

The company has also been battling high input costs—especially on tea and coffee. The company reported a 1% growth in tea volumes in fiscal 2025. 

In the March quarter, North India tea prices came off the highs given the lean season, in line with the yearly trend. South India tea prices came off sequentially as well, the company said during its quarterly earnings presentation.

“Inflation last year was sharp, particularly in tea. Our first response in such an environment is to tighten our belts and get our cost savings right. We will be forced to do calibrated price increases, thinking through the entire cycle because you wouldn’t want to price yourself ahead of the market and the market completely crashes,” he said. 

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Prices of coffee touched record highs in the March quarter—averages prices were up 97% year-on-year higher for the Arabica variety during the period.

He expressed optimism for the upcoming tea and coffee crops.

“The tea crop this year, we believe, is going to be normal and definitely better than last year, and coffee of course, all of us have been watching it, the pricing is volatile and we will need to take a very close look at that, but it looks like the crop could be normal this year. Auction prices of tea are currently equal to last year, and it’s expected to soften as the season starts and continues,” he said.