In February 2020, India’s most respected brand brought together Tata Beverages (Tetley Tea/Starbucks JV) with Tata Chemicals (salt and pulses) to create an FMCG challenger, Tata Consumer. Worth $8bn with Indian revenues comprising 60% of thet total, the challenger is well placed to take on the no.1 player, Hindustan Unilever, worth $70bn (June, 2022).

The new company aims to create new brands for the local market, starting with its historic experience in basic staples such as salt and pulses which remain largely informal and commoditised. Upon this foundation Tata Consumer will add new categories over time and acquire brands they can scale.

Tata Salt is a market leader with a 35% share of the organised market - which it believes could reach 60-70% given the overall market is still 70% informal. Given 95% of Tata Salt sold is the base variant, there is a large opportunity to upgrade consumers to higher margin offerings. Examples include Tata Salt Super Lite, a 30% low sodium salt, for health-conscious consumers; Tata Salt Immuno, a zinc fortified salt; and Shuddh by Tata Salt, a mid-tier portfolio play for the Southern Indian markets where which prefers solar salt as opposed to the regular vacuum evaporated salt.

Tata Sampann is focussed on packaged pulses, spices and snacks. The market size of pulses at $2.1bn is 5x the size of tea and salt combined and remains a lowly 1% branded. The Spice category has a 30% branded penetration rate and is worth c.$1bn.

Tata Soulfull

Tata Consumer has expanded from 500,000 kirana outlets to 2m in 2020 to 2.6m in 2022 with a goal of 4m by 2023. This compares to an estimated 7-8m for Hindustan Unilever and 6m for ITC out of a total 13m kirana’s across India.

Rural is a key growth area for Tata which comprises over 36% of total FMCG but only 20% for Tata.

Online is expanding quickly, rising from 2.5% in 2020 to 7.3% of sales in 2022, with an online market share of tea at 42% - way ahead of peers. Modern trade at 12% sales was up over 30% in 2022 .

The JV with Starbucks is growing a decent clip with 268 stores in 26 cities – 50 added in 2022 – 2-year revenue CAGR of 76%.