What role does innovation play in Tata Consumer Products’ growth!

Innovation plays a central and strategic role in Tata Consumer Products’ (TCP) growth, serving as one of the company’s six key growth pillars and driving its transformation from a traditional beverage company to a diversified FMCG leader. Since 2020, innovation has been critical in expanding the product portfolio, tapping into new consumer trends, and accelerating market reach both in India and internationally.

Key aspects of how innovation fuels TCP's growth include:

• New Product Launches and Portfolio Expansion: TCP has launched about 70 new products since 2020 (34 in FY23 alone). Innovations focus on health, wellness, premiumization, convenience, and regional preferences. For example, health-driven products like Tata Salt Iron Health, Tata GoFit plant-protein supplements, and region-specific spices and beverages illustrate how innovation addresses consumer demands effectively.

• Strong R&D Investments and Infrastructure: TCP has built state-of-the-art R&D centers in Bengaluru, Mumbai, Sri City, and London, shifting from category-based to capability-based innovation teams. The company systematically future-proofs its R&D capabilities and invests year-on-year with a 10-15% increase in innovation budgets, fostering faster product development and market rollout.

• Significant Contribution to Sales: The innovation-to-sales ratio has increased from 0.9% in FY20 to 3.4% in FY23, with a target of reaching 5%, considered best-in-class in FMCG. This shows innovation is not just about new products but also making measurable revenue contributions and driving business growth.

• Leveraging Digital and AI Technologies: TCP uses digital tools and AI for consumer insight generation, identifying market gaps, and accelerating innovation governance. This enables consumer-centric innovations like hyperlocal product customization and quick decision-making processes chaired by the CEO and leadership.

• Packaging and Sustainability Innovations: The company drives packaging innovation (“pack-o-vation”) for consumer appeal and sustainability, winning multiple packaging design awards for products like Tata Coffee Sonnets, Himalayan Honey, and Tata Sampann ready-to-eat packs.

• Balanced Focus on Premium vs. Mass Products: Innovation aligns with changing consumer preferences toward premium products, with a roughly 50:50 split aimed for FY24, balancing accessible mass products with differentiated premium offerings to capture wide market segments.

• Patents and Proprietary Technologies: Over the last three years, TCP filed seven patents focused on product and process innovations, reflecting its commitment to technology-led differentiation.

In summary, innovation is a cornerstone of Tata Consumer Products' growth strategy, enabling rapid diversification, enhanced consumer relevance, improved operating efficiencies, and sustained competitive advantage in a dynamic FMCG landscape. Sources:FinancialExpress