Tata Consumer’s diversification strategy pays off as growth businesses surpass tea and coffee revenue

(Tata Consumer Products’ investor presentation, released alongside its June-quarter results, shows that the company’s diversification strategy has reached an important milestone. Revenue from its “growth businesses”, defined by the company as Tata Sampann, ready-to-drink beverages (RTD), Soulfull, Vending, Capital Foods and Organic India, rose 47 per cent year-on-year to ₹1,314 crore in Q1 FY27 from around ₹894 crore a year earlier.

That surpassed the ₹1,234 crore generated by the India tea and coffee business by around ₹80 crore, while the segment’s contribution to the India business increased to 36 per cent from 28 per cent a year earlier.

The presentation also traces the evolution of the company’s business mix over time. Growth businesses accounted for just 8 per cent of the India business in FY21 before rising to 10 per cent in FY22, 15 per cent in FY23, 18 per cent in FY24, 28 per cent in FY25, 31 per cent in FY26 and 36 per cent in the June quarter, illustrating Tata Consumer’s steady expansion beyond its traditional tea-led portfolio.

The latest crossover highlights how Tata Consumer’s strategy of broadening its FMCG portfolio is reshaping the business. While tea and salt remain key franchises, growth is increasingly being driven by packaged foods, health and wellness products, ready-to-drink beverages and recently acquired brands, reducing the company’s dependence on its traditional tea-led portfolio.

The trend is visible across individual categories. Tata Sampann posted 58 per cent revenue growth during the quarter, supported by strong demand for dry fruits, cold-pressed oils, pulses and spices. The RTD portfolio grew 41 per cent on 35 per cent volume growth, while coffee revenue increased 24 per cent. Salt continued to deliver steady performance, with revenue and volumes both rising 7 per cent. In contrast, India tea volumes grew by 2 per cent, but revenue declined by 4 per cent as the company passed on lower tea costs to consumers.

Capital Foods generated ₹232 crore in revenue during the quarter, while Organic India contributed ₹118 crore. Together, the two businesses reported a combined gross margin of 49 per cent.

The investor presentation says “GTM restructuring initiatives showing encouraging initial results”, as Tata Consumer integrates the acquired businesses while expanding innovation across health, wellness and convenience categories.

The richer product mix is also beginning to support profitability. India segment profit increased 36 per cent to ₹394 crore from ₹290 crore a year earlier, while segment margins expanded to 11.1 per cent from 9.3 per cent.

At the consolidated level, EBITDA margin improved 70 basis points to 13.6 per cent. The investor presentation attributes the performance to a “continued focus on driving profitable growth” and to disciplined execution across the portfolio.

The strategic milestone came alongside a strong June-quarter performance. Tata Consumer reported consolidated revenue of ₹5,349 crore, up 12 per cent year-on-year, while EBITDA increased 19 per cent to ₹730 crore. Net profit rose 29 per cent to ₹427 crore, and the India-branded business recorded 13 per cent underlying volume growth, reflecting momentum across both core and emerging categories.

The investor presentation provides one of the clearest indications yet that Tata Consumer’s long-term strategy is translating into a different revenue mix. Over the past five years, the company has steadily expanded beyond its traditional tea franchise through acquisitions, premiumisation and product innovation. With its “growth businesses” now generating more quarterly revenue than the India tea and coffee portfolio, Tata Consumer is increasingly drawing growth from a broader set of FMCG categories rather than relying predominantly on a single legacy business.