NourishCo’s portfolio includes fruit-based hydration brands such as Tata GlucoPlus, Tata Copper, Himalayan and Fruski.
“India is a very underpenetrated market, and there are still many other functional spaces in the beverage market that remain untapped,” Grover said. “At Tata, we view functional beverages as a key growth area to build a significant beverage business over a period of time.”
A functional drink is a non-alcoholic drink with additional herbs, vitamins, minerals, amino acids, or raw fruit.
The Tata company has also introduced the Tata Gluco Plus and Tata ORS+ jelly drink to tap into the ‘normal’ first summer after the last two seasons were marred by low demand and fewer launches amid the Covid disruptions. . It recently expanded Fruski to new markets like West Bengal, Odisha, Bihar, Delhi-NCR and Uttar Pradesh after the pilot garnered strong backlash.
“Summer is the best time to experiment because consumers tend to try differentiated products,” Grover said. “We are able to do more trials in new geographies. In fact, we are now seeing that the demand is outstripping the supply.
The consumer goods arm of the Tata Group purchased PepsiCo Inc.’s 50% stake in NourishCo Beverages in May 2020. The joint venture was formed in 2010 to sell healthy and value-added beverages.
The decision to expand NourishCo’s portfolio also marks one of the Tata Group’s first key strategic decisions after it decided to consolidate its consumer packaged food and drink business into tea salt maker Tata Consumer.
The brands got off to a weak start with reach lagging for years and largely limited to a few states and cities. But Himalayan grew 1.8x and broke even at the EBIT level in FY22 for the first time since its inception, Grover said. Tata Copper has increased “more than three times”.
Overall, NourishCo grew 83% year-over-year in FY22.
Company management, however, said the company had yet to deliver its “full potential” as it had been impacted by the pandemic. NourishCo’s gross margins, according to the company, are almost similar to those of its tea business.
“NourishCo is in the stage of the tea industry. In fact, once we launch our innovation engine, it should be slightly accretive for the tea industry to be stable,” said Sunil D’Souza. , CEO of Tata Consumer, told investors on a post-earnings call.
NourishCo has huge room for growth, D’Souza said. “This is the first year it has had a full summer. It has also expanded its geographies and capabilities, all of which will bear fruit starting this year.”
Tata Consumer has also extended the beverage business’ footprint to cover the whole country in search of growth, Grover said. It plans to increase its direct outlet coverage to 1.5 million this fiscal year from 1.3 million. Currently, according to the company, it sells its products in 45-50% of the addressable market.