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BW Businessworld

Spicing Up The Basket

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The salt giant is spicing up its food offerings. Tata Chemicals, which launched flavoured salts in March, could get into other condiments through its Flavoritz brand.

"We are testing the waters with pepper," says managing director R. Mukundan. "Because of flavoured salts, we have gained an understanding of coriander and garlic and could extend our knowledge and reach further."

Through Flavoritz, Tata Chem had extended its mass kitchen salt brand Tata Salt into the niche table salts category, offering flavours such as paprika and coriander. Pepper was the first non-salt item. Sibling concern Tata Coffee procures pepper for the company, while Tata Chem packages and sells it. 

Isn't the spices segment overcrowded? "In salt, we had the first-mover advantage; we are working on differentiation and building a consumer connect for Flavoritz," says Mukundan.

The last year saw the Rs 13,806-crore Tata Chem, predominantly a farm and industrial products company, try and aggressively grow its consumer products (or Living Essentials as it calls it) division. The reason could be the sluggishness in its core sectors. At investor meetings Mukundan has talked about how "the demand scenario for the industry and farm essentials business could face pressure due to the global slowdown and uncertain economic policies".

1,000 crore rupees is Tata Chemicals' target from consumer products in FY13

On the other hand, there's good growth potential in the smallest part of its business portfolio — consumer products. Especially foods. In 2011-12, this division garnered a little over Rs 900 crore, and the target is Rs 1,000 crore this year.

In branded pulses (i-Shakti brand), it is looking at doubling sales to Rs 100 crore this year.

According to Mukundan, the foray is aimed at capitalising on the big shift taking place in consumer categories where people are moving away from loose to packaged. "We are not creating fresh distribution for pulses but riding on the strength of Tata Salt's network," he says. 

In pulses too, the firm is pursuing a strategy of differentiation. "The topmost attribute we are playing up is that our pulses are unpolished," says Ashvini Hiran, COO, Consumer Products Business. To build the category, Hiran says the company is relying more on direct customer engagement activities, for which it has roped in celebrity chef Sanjeev Kapoor. On his FoodFood channel, a 13-part series ‘How to Cook Dals' showcased recipes featuring unpolished i-Shakti dals.

Like salts, in pulses too, the back end has been sewn up. Describing the farm-to-fork strategy, Mukundan describes how subsidiary company Rallis supplies seeds to farmers, and also helps source the pulses. The processing is outsourced to third-party vendors, and then Tata Chem takes over at the front end of the distribution chain.

With the government also promoting a "grow more pulses" strategy, Tata Chem has struck up some opportune partnerships. In Tamil Nadu and Maharashtra, for instance, where farmers get a seed subsidy to shift from rice to pulses, Tata Chem is partnering the state governments. Clearly, it has read the pulses right.

(This story was published in Businessworld Issue Dated 23-07-2012)