Tata Consumer bets on innovation and acquisitions to fuel growth

MUMBAI: The recipe for growth, it seems, is getting a fresh twist: a dash of innovation, a pinch of acquisitions and a healthy appetite for higher margins. Tata Consumer Products is doubling down on innovation and acquisitions as it looks to accelerate growth, expand its product portfolio and improve profitability, signalling its ambitions to evolve into a broader and more premium FMCG powerhouse.

Addressing shareholders, Tata Sons Chairman N Chandrasekaran outlined a strategy centred on building new growth engines while extracting greater value from existing businesses.

“Innovation and acquisitions will help drive growth and margin improvement,” Chandrasekaran said, highlighting the twin levers the company intends to use in its next phase of expansion.

The company has set a medium-term target of reaching around 17 per cent EBITDA margins, with a longer-term ambition of crossing the 20 per cent threshold. The goal reflects a growing emphasis on higher-value products, operational efficiency and a stronger portfolio mix.

At the heart of the strategy is innovation. Tata Consumer has been stepping up investments in research and development as it pushes beyond its traditional tea and beverage stronghold into faster-growing and emerging categories. The objective is not merely to launch new products but to build a more diversified business aligned with changing consumer tastes and lifestyle trends.

Indian consumers are increasingly gravitating towards convenience, wellness and premium offerings, prompting FMCG companies to rethink product development and category priorities. Tata Consumer appears keen to ensure it remains ahead of that curve.

Acquisitions are expected to provide the second growth engine.

Rather than spending years building capabilities from the ground up, the company plans to identify brands and businesses that can strengthen its presence in high-growth segments and complement its existing portfolio. The approach mirrors a broader industry trend where FMCG majors are increasingly using acquisitions to gain scale, enter new categories and capture emerging consumer trends more quickly.

Chandrasekaran emphasised that the focus extends beyond revenue growth alone. Improving operating leverage and profitability remains equally important as the company seeks to strike a balance between expansion and efficiency.

The strategy comes at a time when India’s FMCG sector is undergoing a period of transformation. Premiumisation, health-focused consumption and category diversification are reshaping competitive dynamics, with companies racing to build stronger portfolios and deepen consumer engagement.

For Tata Consumer, the shift marks a continued evolution from a business once closely associated with tea into a diversified consumer goods company spanning packaged foods, ready-to-drink beverages and health-oriented offerings.

As competition intensifies and consumer preferences continue to evolve, Tata Consumer’s next chapter will likely be defined by how effectively it can blend innovation with strategic acquisitions. If the company succeeds, growth may no longer come from simply selling more products but from selling smarter, stronger and more profitable ones.