On a Roll
Q] NourishCo was founded as a joint venture between Tata Consumer and PepsiCo in 2010 for the non-carbonated drinks market in India. Since then, how has Tata Consumer’s strategy to acquire the remaining stake from PepsiCo been bearing fruit, and has it been a game changer for the brand? Q] How do you engage with your primary target audience for these newly launched products? Q] Which are your best performing markets? Could you provide insights into your current consumer demographic and outline your plans for future expansion? Q] How does TATA Consumer plan to become a more significant player in the beverage space in the coming years?
We acquired PepsiCo stake in NourishCo in 2020, right in the middle of the first wave of the pandemic, and it took us about a year to get things sorted. But since then we’ve been pretty much on a roll. We registered slightly more than 170cr in the fiscal year that ended in March 2021, and then we clocked over 600cr in the fiscal year that ended March 2023. Considering what has been going on through this said period, first the pandemic, and then the Ukraine war, which was a significant hit for the business because costs went completely through the roof, I would say that we’ve done fairly well.
There are three factors that have worked well for the business, the first is that since we bought out one parent, we are able to make decisions much faster, and that has been a big game changer as far as the business is concerned. Second thing is that it has enabled us to invest in driving distribution, which has paid rich dividends. Finally, the rebranding of the water portfolio from Tata Water+ to Tata Copper+ has worked wonders for us.
While we source consumers across the spectrum, our primary TG is the Gen Z consumers. It’s a very youth-focused category. The Tata Gluco+ is a first-of-its-kind product in India on the cusp of snacks and beverages. It is a drinkable jelly that comes in a cup. Gen Z consumers are looking for products that are functional, accessible and that are not run-of-the-mill. So, in many ways, the core ethos of that proposition is suited for them.
The recently launched advertising campaign targets Gen Z consumers in the language that they understand. The proposition is ‘Energy On, Game On’, and with this campaign, we are using all marketing touchpoints. We are also using gaming as an activation platform because in many ways gaming connects with Gen Z consumers, so we’ve got a ‘scan and play’ on the back of the pack. Apart from this, we have a Snapchat filter as well. A percentage-wise breakup across media would look like – TV at 78%, Digital including Gaming comes to 12%, while the rest of the media accounts for 10%.
We have noticed that the reach of our business is sometimes directly proportional to the time that we spend in a particular geography, and the investments that we’ve made in distribution efforts, advertising, and brand building in those areas. For example, if you look at Andhra Pradesh and some of the geographies where we’ve been around for some time, we enjoy the status of an iconic brand. Whereas in some of the newer geographies, we tend to be distributed in the larger towns. This is because we have a supply chain that is localised. When you start a business in a new geography, it makes sense to target the biggest urban agglomeration because that’s where the business economics works the best. Our approach has always been to test in a small micro-market, learn, and then launch in multiple geographies.
We have a simple portfolio and innovation is a key driver for us. We’ve launched new products in the last few months, which are different from anything that’s available in the market, and you will see that the momentum will continue in the coming months. In the last two years we registered 3.5 x more in turnover, and we have made Himalayan profitable, grown distribution, and increased supply. There is scope to make it much more than just a water brand because consumers are looking for those elevated choices, and there is a dearth of choices for consumers.
Now we are in the process of building the brand Tata Gluco+ nationally. But having said this, we have only touched the tip of the iceberg. There’s still a lot of scope for geographic expansion, and for newer products.
Tags : #e4m #Pepsico #IMPACTinterview #IMPACTThisWeek #TataConsumerProducts #NourishCo #VikramGrover #acquisition