Tata Consumer Products Ltd, which sells products ranging from Tetley tea to Himalayan Natural Mineral Water and millet-based products, has been strengthening its distribution channels to drive growth and improve margins, a top company executive told Mint.
“Amongst all our peers, we will want to stay ahead of the curve both in terms of our channel strategy and in terms of the overall portfolio,” Ashish Goenka, group chief financial officer for Tata Consumer said. “A medium-term target is to get to about 17% in three years, which would mean expanding margins about 70 to 100 basis points each year.”
Tata Consumer posted a 15% increase in revenue to ₹20,290 crore in fiscal year 2026 (FY26). The company’s Ebitda (earnings before interest, taxes, depreciation and amortization) margin has lagged behind rivals in the fast-moving consumer goods sector. In FY26, its Ebitda grew 12% with a margin of 13.9%. Hindustan Unilever Ltd reported an Ebitda margin of 23.6% while Nestle India reported a 23% margin in FY26.
The company faced distributor ire in October, when the All-India Consumer Products Distribution Federation directed all distributors of Tata Consumer products across states to stop accepting sales targets imposed by the company. The federation claimed that the company failed to address their grievances, including issues related to working capital and delays in damage settlements.
Goneka said that the issue was quickly resolved.
“What we basically did was to drive depth of distribution, which means getting deeper into outlets and doing more retailing,” Goenka said.
The company’s plan to improve margins spans its four pillars of strategic pricing, trade margins, promotion optimization and price architecture. The distribution structure will be strengthened in parallel.
The company onboarded 189 new distributors and transitioned 356 existing distributors to the new go-to market model, according to its presentation to investors.
General trade
Tata Consumer also reworked its general trade structure—the traditional wholesaler-retailer distribution model—in FY26.
"In our top 100 cities, which contribute about 30% of our business, we revamped the go-to-market strategy," he said.
General trade, which forms 60% of the company’s business, was reorganized to ensure more focus on growth businesses in markets dominated by salt and tea. Markets with a high salt contribution were divided into salt and non-salt distributors. Where both tea and salt were strong, the distributors were divided into core and growth portfolio distributors.
Growth businesses including ready-to-drink beverages, Tata Sampann, Capital Foods and Organic India crossed the ₹4,000 crore revenue milestone in FY26, with a growth of 24%.
It also pushed into newer sales avenues, noting that its quick commerce and e-commerce channels combined grew 62% in FY26.
“Everything is just quick comm (quick commerce)—there is no more e-comm (e-commerce). Everybody is playing the quick comm game because that's where the growth is,” Goenka said. This segment’s share of the India branded business widened to 19% from less than 5% a few years ago.
As quick commerce becomes a powerful growth avenue, traditional companies are increasing their muscle to capture online shoppers. Hindustan Unilever has set up dedicated cross-functional teams for e-commerce and quick commerce.
“The company is leveraging the rapidly growing quick commerce channel (~20% of India revenue) to scale up its growth portfolio and support an accelerated innovation pace,” analysts at JPMorgan said in a 27 May report. “Further, the refreshed go-to-market approach is enabling deeper penetration and expanded reach in general trade channels.”
New opportunities
“We've also been looking at white space channels we have not been present in and some of the acquisitions that we have done have actually given us help to get into these channels,” he said, referring to untapped opportunities for the company.
In 2024, Tata Consumer acquired Capital Foods, the owner of Ching’s Secret and Smith & Jones, which gave it access to a condiments portfolio and helped it reach the food services segment catering to hotels, restaurants and catering segment. This segment reported annualized revenue of ₹170 crore in the fourth quarter (Q4) of FY26.
Organic India, an acquisition that sells herbal supplements, helped Tata Consumer enter the pharmacy segment, which reported annualized revenue of ₹30 crore in Q4.
“There are 200,000 pharmacies in the country, a lot of business goes through them, but we were not present because we never had the portfolio,” Goenka said, noting that the Organic India addition changed that. “Last year, we went to almost 30,000+ pharmacies.”
The company chose to tap FMCG (fast-moving consumer goods) distributors who also distribute pharma products. The arrangement is active in 30 cities now.
Tata Consumer shares have declined about 6% so far in 2026 compared with an over 8% fall in the Nifty FMCG index.
