Tata Consumer enters UK cereal market
- The UK’s breakfast cereal market is estimated to be over $2 billion with over 90% household penetration
New Delhi: Packaged goods company Tata Consumer Products Ltd. (TCPL) has taken its Soulfull brand of millet-based cereals overseas through a tie-up with British retail chain Tesco. Soulfull will sell cereals under the Joyfull muesli brand in the UK, where TCPL already has a significant presence through its brands - Tetley tea, Good Earth UK, and Teapigs.
In 2021, TCPL, the consumer products arm of the Tata Group, announced a 100% acquisition of Kottaram Agro Foods, owner of Soulfull, in line with strategy to enter new, adjacent categories in the packaged foods segment.
Besides the UK, Tata Consumer also has operations in the US and Canada. In fiscal year 2023 (FY23), international markets accounted for 29% of the company’s revenue. International business revenues last fiscal stood at ₹3,589 crore, while TCPL's overall consolidated revenue stood of ₹13,800 crore in FY23.
TCPL’s acquisition of British tea company Tetley in 2000 was India’s first major cross-border acquisition, making it the second-largest tea company globally.
TCPL is now using its distribution muscle to take more brands overseas.
“Soulfull is completely integrated into Tata Consumer Products Ltd. Even in India, we are using the entire Tata Consumer distribution network. We work with international teams that already service Tesco as a customer,” said Prashant Parameswaran, MD & CEO, Tata Consumer Soulfull, in an interview.
In India, Soulfull sells millet-based muesli, granola, oats, nut mixes, and health beverages.
With Tesco, Joyfull will be retailed across 500 stores. “This gives us a very strong foothold with the largest UK retailer, and it’s not just London, but across the UK,” Parameswaran added.
Parameswaran said that consumers in overseas markets are interested in different types of grains. The brand is eyeing a gradual rollout in other international markets as well.
“We’re not looking at just the UK. We’re looking at other global markets. We will be available across some leading online players in the UK. Then there are advanced conversations with other retailers both in the UK and outside of the UK,” he added.
Last fiscal, TCPL rolled out Tata Raasa, marking its entry into the Indian ready foods segment in the international markets.
The government of India has proposed to the United Nations to declare 2023 as the International Year of Millets. Locally grown millets include jowar, bajra, and ragi, apart from kodo foxtail, among others. Several packaged food companies are latching on to the trend and launching millets in ready-to-cook or eat formats.
However, the breakfast market overseas is highly saturated with scores of large companies already present across the category. The UK’s breakfast cereal market is estimated to be over $2 billion with over 90% household penetration.
Parameswaran said that the cereal brand will ride on TCPL’s existing popularity in the market. For instance, in the UK, TCPL has a 19.4% market share in the black tea market.
“So within the international piece of the business, we have a tea offering, we have a coffee offering, both of which have a breakfast occasion that really comes in. This provides us an opportunity to bring in a product portfolio that is a natural fit and a natural extension,” he said.
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First Published:8 Sep 2023, 02:19 PM IST
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