Tata Consumer Soulfull: How Non-Metro Cities Are Driving Growth Of an Urban Company More than 50 per cent of its sales come from outside the top ten-twelve metro cities, says, Prashant Parameswaran, MD & CEO, Tata Consumer Soulfull
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The United Nations (UN) General Assembly declared 2023 the International Year of Millets. The superfood got its share of attention in the Union Budget when India's Finance Minister Nirmala Sitharaman referred to it as "shri anna '' or the best of all grains. For Prashant Parameswaran, MD & CEO, Tata Consumer Soulfull, the importance of Millets dates back to his early years, thanks to his proximity with agricultural background.
When the Quinoa revolution was taking over the world in the early 2000s it was then that Parameswaran identified its stark similarities with Millets. "The more I knew about it, the more I was amazed by its properties and I was convinced Millets could be part of the world food revolution," the MD said, explaining about the genesis of Soulfull in 2011 which was acquired by Tata Consumer Products in 2021.
The biggest challenge here? "Marrying taste with nutrition, finding a ground where tastes match nutrition was a game changer." Millet-based menu was even served at the G20 Summit hosted by India. The India millet-based packaged food market was valued at $37.7 million in 2022. It is estimated to grow at a CAGR of 9.2 per cent from 2022 to 2032, according to Transparency Market Research.
Innovations & Investments
The product portfolio is divided between kids and adult segments, talking about expansions, he said, "Our innovation is not about adding new flavors or categories, it is about making a difference. We have recently launched Ragi Bites Choco Sticks at an INR 5 price point bringing Millets to the length and breadth of the country." Both segments contribute equally to the business, he added.
More than 50 per cent of its sales come from outside the top ten-twelve metro cities. "The introduction of the INR 5 packs and our existing INR 10- 15 packs ensure affordability at the core, with special focus on rural, Tier III & Tier IV penetration."
Tata Soulfull has developed a proprietary in-house millet processing technology in collaboration with leading millet research institutes. This technology enhances the taste and texture of Millets while retaining their wholesome nutrition. The innovation has allowed Tata Soulfull not only to make millets an attractive choice but also to reintroduce them into the daily diets of consumers. "We follow minimalistic processing which keeps the nutrition intact. To implement this at a larger manufacturing scale, we have heavily invested in technology," he said, adding that the company is equally focused on investing in farmer profitability and pharma productivity.
The brand's expansion plans include boosting manufacturing capabilities with ongoing investments to increase capacity at their 60,000-square-foot facility near Bangalore. "We have also recently started our second manufacturing unit in Indore coupled with our ongoing work at our factories in Hyderabad for our new products."
Tata Soulfull reported a strong quarter and entered new categories, expanding its Total Addressable Market, Tata Consumer Products stated in its Q2FY24 results. "We continued our strong momentum on innovation with a number of new product launches across categories, further expanding our total addressable market. Our growth businesses (Tata Sampann, Tata Soulfull and NourishCo and Tata Smartfoodz) continued their strong momentum and have increased their contribution significantly in line with our portfolio transformation ambition," Sunil D'Souza, Managing Director & CEO of Tata Consumer Products said in the quarter results.
Parameswaran added, "We are focused on taking distribution and maximizing it within Tata consumers and beyond. We are coming up with three to six new categories in the next 12 months and hopefully in the next six months we can start entering a few of them."
Post Covid-19, people have become health conscious and are much more aware. In order to create greater awareness, Tata Solfull is doing a lot of school contact programmes, where they are educating children about the importance of food choices.
Talking about the shift in consumer behaviour, he explained, "Indians are not going to compromise on taste for the sake of health and we cracked this code from the very beginning. With rising awareness, government policies in place, Millets have made a strong comeback even internationally. But when it comes to consumption choices, smaller city people are much more aware than the top ten cities. So, the penetration in smaller towns is easier and when these superfoods are presented in a modern way, the scale of acceptance is huge."
South India held the largest value share of 44.0 per cent of the India millet based packaged food market in 2022. This change can be attributed to consumer lifestyle, rise in concern about health and sustainability, high disposable income of the people and presence of established research & development centers and manufacturing units throughout the region. West India accounts for around 9.6 per cent CAGR of the millet based packaged food market. Rise in service class population, changes in lifestyle and high penetration of various sales channel are some of the major factors driving the demand for millet based packaged food in West India. So, does South India contribute the highest sales figure for Tata Soulfull? "Though penetration of packaged food is higher in South India, all the Staes equally contribute to our growth," said Parameswaran.
With a robust presence in over five lakh outlets across the nation, Tata Soulfull is committed to extending its reach further by penetrating deeper into the domestic market, particularly within the general trade sector.