Addressing questions about Tata Consumer Products Ltd’s subsidiary NourishCo Beverages, MD and CEO Sunil D’Souza said, “We need a set of corrections… I wouldn’t go as far as to say we need a NourishCo 2.0.” NourishCo’s portfolio includes brands such as Tata Copper Plus, Gluco Plus, Fruski and Himalayan Natural Mineral Water. It has also forayed into the energy drink segment with Say Never and ready-to-drink Tata Coffee Cold Brew.
In a recent earnings call, D’Souza highlighted that Tata Consumer Products Limited had committed last quarter, when it finished its acquisitions of Capital Foods and Organic India, that the firm will move its growth businesses from being 20% of the portfolio to 30% of the portfolio.
“We had also committed saying 20% of the portfolio was growing 30% and that 30% will grow at 30%. Unfortunately, we have been a little bit short this quarter. And like I mentioned earlier, it is primarily to do with NourishCo and the base growth portfolio grew at 20%. But if I add, and this is mathematics, if I add Organic India and Capital Foods, it now shows 66%. We have more or less completed our integration of Capital Foods including announcing the new organization and reporting structures. And we are on track to complete Organic India in 100 days.”
On NourishCo’s growth and opportunities and challenges to do with products, pricing and distribution, D’Souza said, “I think we need a set of corrections. While it had an impact of unseasonal summer and an impact on out-of-home consumption… we also did not take some tactical pricing decisions in time for the business. So, I wouldn’t go as far as to say we need a NourishCo 2.0. I think we just need to put our feet on the ground, our heads around the table, figure out what it needs to fix and go fix it, as simple as that. Not a very difficult proposition.”
He added, “We have started putting the corrective actions in place.”
In 2022, TCPL acquired PepsiCo’s 50 percent stake in NourishCo Beverages Limited, making NourishCo a fully-owned subsidiary of TCPL.
From a product perspective, D’Souza said he doesn’t think there is anything significantly wrong because NourishCo products have been proven over the past few years.
Tata Copper Plus, in last quarter despite the heat wave, the firm didn’t see too much of an impact. For Tata Gluco Plus, “we missed some tactical tricks as there were movements in competitive activity and I think we did not react quick enough,” admitted S’Souza, adding, “we put in those corrections at the end of last quarter.”
On top of that, the company also launched Fruski in cups which got a “good response” last quarter and now the FMCG firm is are expanding it, added D’Souza. Say Never, the energy drink which was piloted about three quarters ago, is off to a good start and that too will be expanded, said the TCPL chief executive.
“We are cycling a very, very high base,” on NourishCo, said D’Souza, “So, multiple pieces there. But let me say there is nothing that I find worrying in the business that we cannot correct going forward.”