Vikas Gupta is the Global Head of R&D at Tata Consumer Products, one of the leading fast moving consumer goods (FMCG) companies in India. He has been instrumental in driving innovation and new product development across the company’s portfolio of beverages and packaged foods. In this article, he shares his insights on the company’s premiumisation strategy and how it plans to achieve a 50:50 split between premium and mass product launches in FY24.
Premiumisation: A Mega Trend in FMCG
Premiumisation is a mega trend that has been shaping the FMCG sector in India and globally. It refers to the shift in consumer preferences towards higher quality, differentiated and value-added products that offer superior benefits and experiences. Premiumisation is driven by factors such as rising disposable incomes, urbanisation, digitalisation, health and wellness awareness, and aspiration.
According to a report by NielsenIQ, premium products accounted for 28% of the FMCG market in India in 2020, up from 23% in 2016. The report also projected that premium products will grow at a compound annual growth rate (CAGR) of 13% between 2020 and 2025, compared to 8% for mass products.
Vikas Gupta says that Tata Consumer Products has been tapping into this trend by launching innovative products that cater to the evolving needs and preferences of consumers across categories. “We have consistently increased the premiumisation play across product categories and we are looking at a 50:50 split among premium and mass product launches in FY24,” he says.
Some of the recent premium product launches by Tata Consumer Products include:
- Tata Tea Gold Care: A blend of tea leaves with five natural ingredients – tulsi, brahmi, ginger, cardamom and mulethi – that offer immunity and wellness benefits.
- Tata Coffee Grand: A blend of finely ground coffee beans with freeze-dried instant coffee that delivers a rich aroma and taste.
- Tata Sampann Nutri Chawal: A range of nutritious rice variants such as brown rice, red rice and black rice that are high in fibre, antioxidants and minerals.
- Tata Soulfull Millet Muesli: A range of crunchy breakfast cereals made with millets, oats, nuts and fruits that are high in protein, fibre and omega-3 fatty acids.
Innovation: A Strategic Pillar of Growth
Vikas Gupta says that innovation is one of the six strategic pillars of growth for Tata Consumer Products and that the company has invested significantly in building its R&D capabilities and infrastructure. “We have created state of the art facilities across three locations in India and invested into future capabilities. We have expanded our teams and are investing not only in infrastructure but skill up for R&D in technical spaces,” he says.
He adds that the company has achieved industry best in class 5% innovation to sales contribution since its journey started in 2020. The percentage contribution has seen 5X growth over the last three years over a growing revenue base. “We would like to maintain our position of driving innovation as a strategic pillar of Tata Consumer’s growth journey,” he says.
He also reveals that the company has filed seven patents in the last three years in India and some of them in international markets. The patents cover areas such as natural ingredients, processing technologies, packaging solutions and product formats.
Vikas Gupta joined Tata Consumer Products as the Head of Product Innovation for India in 2013 and was appointed the Head of Global NPD in 2017 for the Beverages business. He was appointed the Global Head of R&D for Tata Consumer Products in June 2020. He has over 20 years of experience in FMCG R&D, having worked with companies such as GlaxoSmithKline Consumer Healthcare and Hindustan Unilever before joining Tata Consumer Products.
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