Project Falcon and Tata's Consumer Coup: The Making of an FMCG Challenger to HUL, ITC

For generations of Indians, the word Tata hasn’t just been a brand, it has been a permanent resident in our homes. Think back to the kitchens of your childhood. It was the familiar packet of Tata salt, the Desh ka Namak, that seasoned every meal. It was the steaming cup of Tata tea that signalled the start of the day for elders at home.

In every Indian household, the name represents trust and legacy.

Yet, when N Chandrasekaran, chairman of Tata Sons, wanted to hire Whirlpool India’s head Sunil D’Souza to lead Tata Global Beverages (TGBL) in September 2019, he got a shock refusal.

Who in their right minds wouldn’t want to join a Tata company?

Well, D’Souza hadn’t heard much about TGBL. In fact, his colleague at Whirlpool India had called it a “sleepy company”.

At the time, TGBL’s revenues were a meagre ₹7,408cr compared to close to ₹50,000cr and ₹40,000cr logged by fast-moving consumer goods (FMCG) heavyweights ITC and Hindustan Unilever (HUL), respectively, in 2018–19.

Experts had noted TGBL had not much to show in terms of major product innovation for years. Primarily a tea and coffee company, it was locked in a low-growth cycle.

In 2018, various analysts had remarked that TGBL’s growth was muted as it wasn’t selling anything beyond tea and coffee.

At TGBL’s annual general meeting on July 5, 2018, Chandrasekaran said the company would exit loss-making subsidiaries and focus on profitable ones that can be scaled up. “Even though in volume terms, the company continued to be number one in the Indian market, the same was not true in value terms,” he said.

So, D’Souza’s immediate “no way” to the job offer was justified. TGBL wasn’t on his radar or anyone’s at the time.

But the headhunter convinced him to meet Chandrasekaran.

This meeting, says D’Souza, made all the difference for him. He recalls the Tata Sons’ chairman saying “I have the money. But I don’t have the team to run it.”

But the clincher for him was Chandrasekaran’s larger plan to foray into the FMCG space and the intent to disrupt the market.

In December 2019, Tatas announced D’Souza’s appointment as managing director and chief executive effective April 2020. One more important addition to this FMCG team was Tata Sons’ Ajit Krishnakumar as chief operating officer.

What followed was the duo’s visits to Mumbai, Bengaluru and Gurgaon. They walked to distributor offices and kirana stores and sat through market visits. “We drew out in great detail what we wanted this company to look like,” says Krishnakumar.

The mandate from Chandrasekaran was simple. He wanted a com-pany commensurate with the Tata name, one that shared the same shelf space as the likes of HUL and ITC.

Humble Beginnings

The mission to become an insurgent company in the FMCG space kickstarted with the formation of Tata Consumer Products (TCPL) in February 2020 by merging TGBL’s tea and coffee units with Tata Chemicals’ salt and pulse businesses.

However, with established FMCG rivals like HUL, ITC and Nestlé India, D’Souza and Krishnakumar had their tasks cut out. The competition had a century of headstart in India.

Within the Tata group itself, TCPL ranked eighth by revenue in 2019–20, behind Tata Motors, TCS, Tata Steel, Tata Power, Titan, Tata Communications and even Tata Chemicals.

But “things couldn’t get any worse than this, right? We were already at the bottom of the heap in FMCG. You could only get better,” recalls D’Souza about his mindset at the time (see pg 24).

Building a brand name as a Tata company opens doors. But competing is another. Could this new company take on HUL, Nestlé and ITC?

TCPL started by trimming the portfolio, streamlining the consumer products businesses spread across five continents, from India and the US to the UK, Canada, South Africa and Australia.

In Australia, the company held a 7% share of the tea market but was also running an out-of-home coffee dispensing business that was losing millions of dollars. It was shut down in December 2020.

In the US, a food-service joint venture, including a tea factory and a distribution unit, was disposed of as well in March 2021.

“We had 45 legal entities. That’s not tenable,” D’Souza says. “We exited areas where we didn’t see value. The focus clearly shifted to not just the topline, but margins.”

Six years later, TCPL’s entity count stands at 25 and is well on the way to the target of 18 entities.

What stood out in the next six years is TCPL’s sole focus to dominate the food and beverages (F&B) category. The company’s mantra: think big, move fast.

By late 2020, once the initial scramble post the merger had settled, TCPL ran a strategic exercise called Project Falcon. The result was a playbook: categories to foray into, categories to stay out of, where to build and what to buy.

The year 2021 provided a starting point for TCPL. In March that year, the United Nations officially declared 2023 as the International Year of Millets, acting on a proposal from India. The country being the largest producer of millets, accounting for 20% of global production, wanted to raise awareness of millet’s role in improving nutrition and creating sustainable market opportunities.

The timing was fortuitous for TCPL. In 2021, its first acquisition, Soulfull, was a millet-based health-food brand. This ₹155.8cr deal gave Tatas a foothold in a category it couldn’t have credibly entered on its own.

Within three years of acquisition, Soulfull’s distribution had grown from 15,000 outlets to 300,000, carried on the back of the Tata’s existing network.

Three years later, in January 2024, when TCPL announced two deals with combined worth of ₹7,000cr in quick succession, its stocks fell.

The market wasn’t convinced initially. TCPL had just committed roughly 40% of its annual revenue to two brands it did not build. At the time, it was a new player with its core business running on single-digit margins.

Analysts at Ambit Capital estimated the acquisitions would cut 2025–26 earnings by roughly 10%.

The first, a ₹5,100cr deal, was to buy Capital Foods, the company behind Ching’s Secret.

The second was a wellness play, a ₹1,900cr cheque for Organic India, a Lucknow-based brand with a devoted following in the US.

D’Souza had faith in these big-cheque acquisitions. “We are not playing this game for the next one or two years. We do these acquisitions knowing that we put money there. It will bear out over a period of time.”

Ching’s Secret had spent decades building the desi Chinese category in urban Indian homes almost single-handedly—the Schezwan chutney, the noodles and sauces.

As for Organic India, it had a network of farmers across Madhya Pradesh and Uttarakhand, a manufacturing facility in Lucknow and decades of Ayurvedic credibility in the American wellness market. It was built over years of relationships that TCPL simply did not have and could not quickly acquire.

And the numbers weren’t disappointing. By the third quarter of 2025–26, Capital Foods and Organic India together were generating ₹354cr in quarterly revenue, up 15% year on year, at gross margins of roughly 48%, well above TCPL’s blended average of 43%.

Motilal Oswal expects integration costs to ease substantially by 2026–27, after which the margin story should become clearer.

Fight for Shelf Space

From the get go TCPL was clear about the categories it wanted to enter and to avoid as well.

It didn’t want any stake in the basic edible-oil segment. This shelf had far too many players led by the likes of Fortune and Saffola.

But cold-pressed oil was a different ballgame. Consumers here were buying into a health claim with no way to verify if the product was trustworthy. “The Tata name does the magic there,” says D’Souza.

In August 2023, TCPL launched a range of cold-pressed oils under its brand Tata Simply Better, a new brand that was launched in 2022 to enter the plant-based mock-meat category.

The logic: find the trust deficit, fill it with the four-letter Tata name, became the basis for every category TCPL considered entering.

The sweet spot for the insurgent company was categories that were fragmented, where consumers didn’t fully trust what they were buying and where a credible brand could change the equation.

Biscuits was another category that TCPL gave a skip.

Britannia and Parle owned 56% of the market, built over decades of backward-integrated manufacturing and distribution muscle.

This restraint, wrote Motilal Oswal, in a recent note, is “rare in Indian FMCG”. Categories like biscuits, snacks, colas and base edible oils are permanently off the table, crowded segments where the Tata brand adds no meaningful trust-led differentiation. “Such portfolio discipline is a positive indicator of capital allocation quality,” the note observes.

Built organically, cold-pressed oil is now running at an annual revenue of ₹350cr. Dry fruits, another category Tatas entered with the same trust deficit logic is at a ₹300cr run rate.

What differentiates TCPL from other FMCG players?

The categories that Tatas have built or bought into are still being defined. HUL and Nestlé, on the other hand, are dominant in mature markets where penetration is already high. HUL is buying established brands in categories it rules, plugging gaps in existing portfolios. TCPL is buying into categories it has never played in, at scale, while the core business is still being built.

Whether this is disciplined offence or over-extension is a question the next two years of integration will answer.

Even before acquisitions came into play, among the first things D’Souza and Krishnakumar did was to build accountability. There had been no one person who owned a category (tea, salt or pulses) from manufacture to sales.

They created category leaders who were responsible for the product’s profit and loss, bar the fixed costs. Functions that did not exist were created.

In 2020, Tata Salt was present in nearly 2mn retail outlets across India. TCPL’s own salespeople directly visited just 150,000 of them. The remaining 1.85mn stores were being supplied through a chain of middlemen, called super stockists or consignee agents.

These middlemen picked up Tata Salt in bulk from big distributors and moved it onward through their own networks. No one from TCPL knew what was selling fast, what wasn’t or what product a rival had placed on the shelf just two rows away.

“That shows the strength of the brand and also the lack of distribution reach,” says D’Souza. In FMCG, this gap between a brand’s total reach and its direct reach is called the wholesale multiplier. It measures how many outlets are stocking your product for every outlet you directly supply. A multiplier of five is considered normal. TCPL’s was 15, a number almost unheard of.

This meant TCPL had no direct relationship with over 90% of the shops and no mechanism to introduce anything new in those shops.

“There was this big layer [of middlemen] in each state. We removed that entire layer. That layer alone was about 1.2% in terms of cost. Then we appointed proper distributors, recruited the right people and rebuilt the distribution system,” says D’Souza. This was a saving of 36 paise on every 1kg pack of Tata Salt with an MRP of ₹30.

Rebuilding the entire distribution ecosystem took six to seven months. The distributor base was cut from 4,500 to around 1,500–1,600. These distributors were now carrying the full portfolio, reporting directly to TCPL. The sales force was expanded by 30%.

The results were quick. TCPL’s direct outlet reach stands at approximately 2.3mn today from roughly 500,000 in 2019–20. The total reach is 4.4mn outlets now.

“There are two key benefits to getting closer to the retailer. It supports margins and gives you better visibility into what’s happening at the point of sale,” says Arvind Singhal, chairman of The Knowledge Company, a management-consulting company.

Progress is real. But TCPL has miles to go. HUL reaches more than 9mn outlets, built over nine decades. ITC reaches 7mn. Nestlé 5.2mn. India has roughly 12–15mn kirana stores.

“The whole premise was to create a distribution funnel through which you can then push different products,” says D’Souza.

Bump in the Road

The first real test for TCPL was whether the idea of pushing new products through the distribution funnel would work.

Pradeep Gupta, a kirana store owner in Varanasi, has been a witness that it worked. Six years ago, two products were always on his shelf: Tata Salt and Tata Tea Premium. He didn’t need a salesperson to tell him to stock them.

Now, new products from Tata Sampann spices to Ching’s Secret sauces and Soulfull rusk are on the shelves of Gupta’s tiny store. TCPL’s distribution network made it happen. A distributor who had built his business around Tata Salt would now also handle Ching’s Secret. A salesperson who knew how to move a commodity would now pitch a branded sauce.

But not everyone was happy. The All India Consumer Products Distributors Federation (AICPDF) went up in arms against TCPL in 2025. Distributors were protesting excessive targets, stocks were piling up in warehouses and damaged goods sitting for months with no settlement.

The mismatch was structural. Salt moves through wholesale with 80% of it never seeing a retail salesperson. Most of the newer growth products like Ching’s Secret are sold almost entirely through direct retail.

Running both through the same distributor was asking a man who sold salt by the tonne to also build a market for Schezwan chutney.

The AICPDF president Dhairyashil H Patil explains what went wrong. “Salt is typically sold in large volumes. Products like Tata Sampann [a packaged pulses brand launched in 2017 under Tata Chemicals] and tea are the opposite, only about 8–10% goes through wholesale. After the merger with Capital Foods, there was a complete mismatch.”

Distributors built around salt did not find it viable to handle retail-heavy products. “Most Tata distributors derive 60–70% of their turnover from salt, so their focus remains there,” adds Patil.

TCPL eventually had to take back damaged goods sitting with distributors for six to eight months. D’Souza’s response was to separate the networks entirely.

TCPL’s growth businesses like Ching’s, Soulfull and Organic India had their own distributors and sales teams in just three months. “For any other company, it would have taken at least a year or more,” D’Souza says.

Also, the portfolio TCPL had inherited gave its own answer to what the distribution funnel could carry. Sampann, a “hobby for Tata Chemicals”, arrived at the merger doing ₹150–200cr in revenue. In 2025–26, Sampann is expected to touch ₹1,700–1,800cr, with pulses alone contributing ₹1,000 crore.

“The whole DNA of the company is to stay agile and make sure to move at full speed,” says D’Souza.

Fast and Furious

TCPL moved at full speed indeed when it came to trends. In May 2019, Beyond Meat, a company that made plant-based burgers from pea protein, listed on Nasdaq. Its stock more than doubled on the first day.

Within months, McDonald’s was testing a meatless McPlant and KFC was piloting plant-based chicken. Plant-based meat looked like the future of food.

TCPL bought into the trend. In 2022, it launched plant-based mock meat under the Tata Simply Better brand. However, the global buzz died sooner than expected. Two years later, TCPL exited the category.

The exit is not the point. What matters is that the product took 150 days from concept to shelf. TCPL had built something that would have been impossible two years before.

Mock meat required food science to replicate the texture of meat from plant protein, process technology, a team of chefs, food scientists and packaging engineers.

Capabilities were built from scratch. In the beginning, the R&D team was just 10–15 people. Today, it operates across three centres: Bengaluru as the research and packaging science hub, Mumbai for food innovation and product development, and Barabanki in Uttar Pradesh, anchoring the wellness work after the Organic India acquisition.

The team remains lean, around 60 people, roughly one-third the size of comparable FMCG rivals, estimates Vikas Gupta, R&D head at TCPL.

When D’Souza arrived in 2019, just 0.8% of TCPL’s revenue came from new product launches. The industry benchmark is 5%. TCPL was nowhere close. Today, that number stands at roughly 5%.

Onkar Kelji, research analyst at Indsec Securities, a brokerage firm, frames the economics of the chase: the early returns on innovation can be thin, he says, as companies push products aggressively and launch on e-commerce where margins are typically lower than general trade. “But if these products scale, they deliver better margins over time.”

Across the industry, the contribution of newly launched products has generally stayed under 5%. With acquisitions, that mix is expected to rise, notes Kelji.

In FMCG, innovation is not only about launching entirely new categories. It is also about rethinking what already exists. “We were singularly focused on vacuum-evaporated iodised salt,” says D’Souza.

The thinking that replaced it was simpler. “Give the consumer what they want. Plain salt. Salt with iron, with zinc. Low sodium for the health-conscious. Himalayan rock salt for the premium buyer. Sendha [during Navaratri]. One product became a portfolio,” adds D’Souza.

A patented granulation technology was developed for double-fortified salt, solving a long-standing industry problem of how to add iron to iodised salt and keep it stable.

TCPL also produced the Tata Coffee Cold Coffee liquid concentrate, a first-of-its-kind product in the Indian market that lets consumers make cold coffee at home without equipment.

The first 100 product launches after the merger took three-and-a-half years. The next 100 took 16 months. At one point, the company was turning out a new product every week, each one requiring its own supply chain, packaging, shelf-space negotiation and own sales story.

For a company that was criticised in 2018 for launching almost nothing new for years, this was a different metabolism entirely. “It’s easier when you are doing everything from scratch, says D’Souza, adding “As soon as we see a trend, we are on top of it and running with it.”

E-commerce is a good example of how TCPL, weeks into its merger, took on the very real challenge of lockdown and built a new digital vertical to boast of.

Lessons from Pandemic

In March 2020, most Indians had online grocery apps on their mobile phones. These were rarely used. But the Covid-19 pandemic and subsequent lockdown reshaped this landscape.

BigBasket’s servers strained with massive order volume surge. Dunzo crashed repeatedly. Amazon Fresh ran out of delivery slots. Millions of urban Indians were struggling to restock their kitchen shelves.

At the time, TCPL’s entire e-commerce operation was one person’s part-time responsibility. The southern regional sales head looked after e-commerce. TCPL had to race against time to build a digital channel. And D’Souza’s team built it fast.

E-commerce became a dedicated function with its own head. A modern trade team was created. Every new product launch went digital first. E-commerce gave TCPL something general trade never could: unfiltered data on what actually works.

While the company’s overall innovation-to-sales ratio was 3.4% by 2022–23, it was 10% on e-commerce. Products that proved themselves online were then pushed into general trade.

“The beauty of e-commerce is that it is only you and the consumer. It is the power of your product and your brand and your value proposition,” D’Souza said in an earnings call.

E-commerce’s revenue contribution at the time of merger was 2.5%. By late 2021, it was 7%, a growth of 130% in a single year. By 2024–25, it reached 14%, overtaking modern trade for the first time. By the third quarter of 2025–26, e-commerce and quick commerce together stood at 18.5%.

“I don’t think anyone else is in this ballpark,” says D’Souza. He is not wrong. HUL’s equivalent figure runs at 7–8%, Nestlé India’s at 8.5%. The company that almost missed the decade’s defining channel shift now leads it among its peers.

What makes the number more significant, according to Motilal Oswal, is TCPL’s margins on quick commerce are comparable to traditional channels, unlike most peers, who are seeing margin erosion on the platform.

The Tata group’s acquisition of BigBasket in May 2021 gave TCPL a window into how millions of Indians shop for groceries.

In an earlier earnings call D’Souza pointed out that BigBasket is a group company, not a TCPL asset. But within the group, he said, they were working closely to find synergies.

The channel shift also fits the company’s portfolio. Quick commerce skews toward the premium buyer: the person reaching for Himalayan rock salt at ₹100 rather than iodised salt at ₹30, Organic India’s tulsi tea rather than a commodity tea bag.

The premium end of TCPL’s portfolio, built over five years, is precisely what the fastest-growing channel wants. The mass business still dominates revenue.

Half-way Mark

In January 2021, D’Souza said, “If we get it right, the rewards would be endless. If we didn’t, we’d have to live with it for a long time.” Five years later, he rates himself “five out of 10”. Ask him what TCPL has that HUL and Nestlé don’t, and the answer is the four letters T-A-T-A.

Here is what five out of 10 looks like. TCPL’s revenue has grown over 80% between 2019–20 and 2024–25. In annual terms, that is a compound rate of roughly 13%, faster than HUL’s 9.8%, Nestlé India’s 10.5% and ITC’s 9.7% over the same period, albeit off a smaller base.

TCPL reported a consolidated annual turnover of ₹17,618cr in 2024–25. Its operating margin, what survives from every rupee of revenue after paying for everything, runs at 14–15%. HUL’s is 23–24%.

Closing this gap requires high-margin businesses like Ching’s, Organic India, Soulfull, cold-pressed oil to grow fast enough to become roughly a third of total revenue. Right now, they are 8–9%.

Tea costs, which TCPL cannot control, need to normalise. Integration costs from the 2024 acquisitions need to wind down.

Motilal Oswal projects margins reaching 17% in three years. The path to 20%-plus, where HUL and Nestlé operate, is considerably longer than that.

Return on capital, how much profit a company earns on every rupee invested, tells the same story from a different angle. TCPL’s sits at roughly 10%. HUL’s is 27%. D’Souza points out that the core business, stripped of the 2024 acquisition capital, delivers 30%-plus.

The acquisitions are dragging the consolidated number while they are still being absorbed. Most analysts expect the trajectory to improve. The question is whether it does so within the timeline management has guided.

D’Souza describes the portfolio in three segments: the international business: Tetley, the part that “pays our salaries”. The India staples: tea and salt, large but low-margin, subject to commodity costs he cannot control. And the growth businesses: Ching’s, Organic India, Soulfull and cold-pressed oil, which are small today but carry the highest margins and expectations.

“All three pieces need to come together,” says D’Souza.

“Each piece in the portfolio has a very specific purpose,” explains Krishnakumar. International for steady margins. Sampann for growth. Capital Foods and Organic India for both. “The headline target ties it together: a double-digit-plus topline and a bottom line growing higher than that,” he adds.

Today, the portfolio spans tea, coffee, water, ready-to-drink beverages, salt, pulses, spices, ready-to-cook and ready-to-eat offerings, breakfast cereals, snacks and mini meals.

However, the product range is in the food and beverages (F&B) universe. The company does not yet cover much else. “Without personal care or home care, TCPL is not yet a comprehensive FMCG powerhouse,” says Devangshu Dutta, founder of Third Eyesight, a boutique management-consulting firm.

Krishnakumar’s response is: “On a revenue basis, F&B accounts for nearly 80% of the FMCG universe. Outside of F&B, it requires a very different set of skills, a very different DNA.”

TCPL is not making bets in personal-care or home-care segments in the near future.

The Long Game

“There’s no magic breakout moment,” says Krishnakumar. What he points to instead are accumulations: salt crossing million packets a day, the stock market re-rating and the innovation pipeline turning out a new product every week.

The competition, however, is not waiting. HUL’s quick commerce is logging 3% of revenue, growing at over 100%. ITC plans to spend ₹20,000cr over five years with the bulk for foods. Nestlé is deepening its product pipeline.

These rival FMCG companies are now moving faster than they have in years. For TCPL, the race has gotten harder.

At the same time, these giant competitiors have their own challenges. HUL draws only 25% of its revenue from foods. Nestlé is concentrated in dairy and confectionery.

ITC, which is still moving away from tobacco, draws 40% of its revenue from packaged foods and personal care combined.

While these Goliaths have their attention split, TCPL’s focused approach is perhaps the one thing they cannot replicate. “In any category that we have a stake in, we would be among the top three brands,” says a confident D’Souza.

Six years in, the pieces are in place. “Our strategic road map and the strong foundation we have laid for the business have yielded good results...Our overarching ambition is to evolve into a full-fledged FMCG company,” Chandrasekaran said in TCPL annual report 2024–25.

Whether TCPL becomes big and matches his vision is a question the next six years will answer.

Within the Tata group, TCPL’s revenue ranking may not have moved much: eighth in 2019–20, seventh today. Both profits and market capitalisation have grown more than three times. It’s now worth over ₹1 lakh crore, nearly seven times Tata Chemicals, and more than double that of Tata Communications.

The market is not pricing what TCPL is. It is pricing what it might become. “Because if you’re not in the top three, there is no point,” says D’Souza. The man who chose to walk into the “sleepy company” is not done yet.