Proposed Acquisition of Capital
Foods and Organic India
12
th
January 2024
Public
Disclaimer
2
The contents of this presentation are for informational purposes only and are intended to provide only a broad overview of the proposed
transactions. The presentation does not purport to be all inclusive or to provide the complete details of the proposed transactions, as may be
required to make a full analysis of the Company or the proposed transactions. Certain statements made in this presentation relating to the
Company’s objectives, projections, outlook, expectations, estimates, among others may constitute ‘forward-looking statements’ within the meaning
of applicable laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. These forward-
looking statements are based on various assumptions, expectations and other factors which are not limited to, risk and uncertainties regarding
fluctuations in earnings, competitive intensity, pricing environment in the market, economic conditions affecting demand and supply, change in
input costs, ability to maintain and manage key customer relationships and supply chain sources, new or changed priorities of trade, significant
changes in political stability in India and globally, government regulations and taxation, climatic conditions, natural calamity, commodity price
fluctuations, currency rate fluctuations, litigation among others over which the Company does not have any direct control. These factors may affect
our ability to successfully implement our business strategy. The company cannot, therefore, guarantee that the ‘forward-looking’ statements made
herein shall be realized. The Company, may alter, amend, modify or make necessary corrective changes in any manner to any such forward
looking statement contained herein or make written or oral forward-looking statements as may be required from time to time on the basis of
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Public
Glossary
3
Term
Description
3P
Third Party Manufacturer
Company
Tata Consumer Products
CF
Capital Foods Private Limited
Desi Chinese
Desi
Chinese refers to Chinese cuisines adapted to Indian tastes
Gross Margin
(“GM”)
Net Revenue less manufacturing costs includes material cost of goods sold, processing fees
and other factory related costs
GT
General Trade
MT
Modern Trade
Net Revenue
Revenue from operations
SKU
Stock Keeping Unit
TCPL
Tata Consumer Products Ltd.
Public
Agenda
4
Capital Foods
Organic India
Synergies
Overview
Financials/Transaction
Overview
Annexure
Public
Public
We are Tata Consumer Products
6
Integrated F&B company
with rich heritage of Tata,
aspiring for a larger share
of the FMCG World
In a nutshell
Largest salt brand in India 3
rd
largest tea brand in UK &
largest tea brand in Canada
2
nd
Largest tea brand in India
4
th
largest R&G coffee brand in
USA
National brand
in pulses, spices, dry fruits and
other staples
~3500+ employees worldwide
₹ 13.8K crore consolidated
revenue in FY23 with a
market cap of ~ ₹ 1 Lac Cr.
#1 natural mineral water brand
in India
Among the top 10 FMCG
companies in India
#2 branded tea player
globally
Reach of 200mn+
households in India and
distribute to 3.8mn retail
outlets
*
As of 5
th
Jan 2024
Public
Over the past 3 years, TCPL has invested significantly in
building a strong foundation to drive accelerated growth
7
FY23
FY20
Rapid expansion of distribution footprint Investment in infrastructure
Shifted to Cloud
Integrated S&D Backbone
Single Instance of SAP
IBP
Clearview Analytics
India – Contribution of alternate channels
(MT / Ecom)
#
81
76
73
19
24
27
FY21
FY22
FY23
General Trade Alternate
# India business
FY23
FY20
2.5
3.8
0.5
1.5
1.5x 3x
Total reach (mn outlets) Direct reach (mn outlets)
Strengthened digital capabilities
Channel partners including
distributors and sub-distributors
Feet on Street
CFAs
Public
In line with our stated strategic priorities
8
Strengthen &
accelerate
core business
Unlock
synergies
Drive Digital &
Innovation
Create Future
Ready Org
Embed
sustainability
Explore new
opportunities
Public
Announcing the acquisition of Capital Foods and Organic India…
9
Acquisition of Capital Foods Acquisition of Organic India
Massive potential to drive synergies by leveraging Tata Consumer’s distribution network, increasing scale
along with scope to deliver significant operating efficiencies
Public
…which add strong complementarity to Tata Consumer’s F&B
platforms and fill stated whitespaces…
10
Besan, poha, other staples
Protein platform
Tea, Coffee
Salt
Pulses, spices
RTCs
Dry Fruits
Water
RTDs
RTEs
Breakfast cereals
Snacks
Capital Foods Products
Horizon 3Current core Pantry platform
Liquids
platform
Mini-meals
platform
Soups
Sauces, Chutney
Noodles
Chinese masalas, Pasta
Masala, Ginger Garlic Paste
RTD – Ready to drink
RTE – Ready to eat
Organic Packaged Food
Organic India Products
Organic Tea &
Infusions
Herbal Supplements
Tata Consumers Existing
Products
Instant Noodles
Public
…and turbocharge our progress towards becoming a premium
F&B platform…
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What we becomeWhat we are/have
✓Portfolio of market leading F&B brands
✓Strong momentum in expansion of S&D
network
✓Potential to deliver steady growth over the
medium-to-long term
✓Mid-teens EBITDA margin
✓A strong innovation backbone with state-of-
the-art R&D facilities
Public
Public
Unique platform that is synonymous with the largest single
cuisine block in India…
13
Note: 1. As of Jan’23; 2. Nielsen data for urban reach
Market Leader in
Desi Chinese across
product categories
#1 brand in Ginger
Garlic Paste (“GGP”)
Created
Schezwan Chutney
market
Umbrella platform brands with a diverse portfolio of unique
products for “in-home” consumption
FY24E: ~INR 936/750 Cr Gross/Net revenue; ~50% GM; 20%+
EBITDA Margin
Fast-growing F&B player: 20% CAGR in Net Revenue (FY20-23),
improving EBITDA margin, with scope to drive further expansion
Scalable manufacturing capabilities: three owned plants and
four 3P plants with significant scope for higher levels of utilization
Distribution
reach
1,2
~350K stores
Revenue from
Exports
~17%
Established
Brands
25+ years
Public
…with a product portfolio that has market leadership across
categories…
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Market Share in respective categories as of 2022. Sauces include green chilli, red chilli and soy sauces.
Source: Management estimates, Industry sources
# Market position
Chutneys
(Schezwan)
#1
87%
Blended Masala
(Desi-Chinese)
#1
55%
Sauces
#1
27%
Ginger Garlic
Paste
#1
12%
Soups
#2
27%
Public
Maximize growth in
premium GT and MT
through key account
relationships
…and strong brand recall…under-indexed on distribution…
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… and increase focus on E-commerce throughput
Capital Foods enjoys strong brand recall
Significant investment to drive brand awareness
Massive potential to leverage TCPL’s distribution to scale up Capital Foods
1
….
E-grocery market
to grow at 30%+
CAGR for next few
years
0.4
3.8
Category 1 Category 2
Total retail
reach
(mn stores)
Potential to drive strong double-digit revenue growth significantly higher than TCPL's current trajectory
Incremental GT unlock
Leverage in-house
E-commerce
expertise
Increase online
channel saliency
4%
~10X
640K+
YouTube subscribers
80%+ aided awareness
in Chinese Masala, GGP, and
Chinese Sauces
88%
84%
79%
Awareness*
Consideration*
Top 2
Ever Used*
*For Schezwan chutney; similar brand metrics for Chinese masala over the same period
Public
…and under-penetrated “in-home” consumption segment…
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The Chinese Food Service (FS) market is expected to grow at 12-14% CAGR,
indicating strong consumer preference
Ching's Secret has
become synonymous
with the category
Desi Chinese
Capital
Foods
introduced
Desi
Chinese in
India
2022 2027F
Indian
64,000
Chinese
48,000
Others
120,000
~80,000 –
88,000
(INR Cr)
While, “In-home” cooking is highly underpenetrated, providing large headroom for growth
“In-home”
Desi-Chinese
segment
expected to
grow ~24%
CAGR
“Desi Chinese” transcends regional flavors,
unlike the high diversity of Indian cuisines
across regions
“Desi Chinese” has a dominant presence
across food service, both online and offline
Mexican
Cuisine
(USA)
Ratio of in-home
Mexican market
to organized FS
industry
Desi
Chinese
(India)
Ratio of in-home Desi-
Chinese market to
Chinese organized FS
industry
30% 3%
Quality
Control
Lower
cost
Packaged
products and
ingredients
availability
Source –Management Estimates
Indian cuisines are
highly fragmented with
no single dominant
cuisine block
Public
…providing category leading growth opportunities across sub-
segments with high gross margins…
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Relevant market* to grow at ~13%
Market Growth (CAGR CY22-27)
Overall
Blended Masalas
Chinese Sauces
Chutneys
GGP
Instant Noodles
Source –Management Estimates
(INR Cr)
Key
Growth
Drivers
Increase in income levels
with higher younger
population salience
Growth in rural/Tier 2+
consumption
Increased
salience of “in-
home” cooking
Increase
occasion of Desi-
Chinese
consumption
Evolving
preference for new
cuisines and tastes
21,400
41,600
2022 2027F
~24%
~17%
~26%
~16%
~14%
~38%
Capital Foods
Gross Margin
CF focus categories to grow at ~2x of relevant market
~50%
…with high gross margin
* Includes Chutneys, Chinese Sauces, Instant Noodles, Blended Masalas,
GGP and soups; Blended masala includes Indian and western blended
spices
Public
…along with potential to cross synergize Capital Foods’ export
strengths for Tata Consumer’s packaged foods products…
18
Combined international presence
TCPL* Capital Foods*
UK
USA
Canada
South Africa
Middle East
Australia
UAE
Poland
*Major presence
Leverage CFs’ retailed relationships and
presence to sell its own brands
Public
In summary
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Fast growing brand catering to “in-home” cooking of western cuisines
Strong brand synonymous with Desi Chinese with market leadership across categories
Product categories and Margin accretive: Operates in complementary categories with no overlap to TCPL’s existing product
portfolio; High margin business: 50%+ gross margin
Facilitates entry into high-growth categories with significant potential – INR 21,400 Cr TAM; with rapidly growing
business – Capital Foods’ Net Revenue grew at ~20% CAGR between FY20-23
In line with our strategic priority to expand total addressable market into adjacent, high-margin, high-growth categories;
With Sampann, Ching's Secret, and Smith & Jones, we will cater to a wide gamut of the Indian culinary palate
Strengthen exports: Strong retailer relationships in key export markets to be leveraged for growth including manufacturing of
white label products for key international accounts
Public
Public
► Leading “better for you” organic brand of F&B and herbal supplements
products
► Omni-channel presence across GT, E-comm, stores, own website and exports
► INR 350+ Cr. brand with high quality products focused on “sustainable living”;
55%+ gross margin
► Caters to booming, highly fragmented INR 82,000 Cr market; Winning
customer trust is key to success
Unparalleled end-to-end organic supply chain
The leading platform of “better for you” organic products with a
truly organic supply chain…
21
Established
Brand
25+ years
Healthy
Products
100+
Organic Farmers
Reach
~12k+
Revenues from
USA
~40%+
TCPL to acquire upto 100% stake in Organic India
Unique, robust, hard to replicate and scalable back-end infrastructure
Rigorous product testing procedure and certification valid for major global markets
► Aligns with Tata Consumer’s strategy to expand Horizon 3 segment, providing
substantive growth opportunities
Public
…with an established brand across premium and emerging
categories…
22
Herbal Supplements
(~40%)
Condition Specific Daily Nutrition Psyllium
Product Portfolio (Revenue Split%)
Source: Management Estimates
1. Organic India exports to 48+ countries
Tea & Infusions
(~40%)
Green Tea Wellness Tea Infusion
Organic Packaged
Food (~20%)
Ghee Honey Jaggery
Powder
Premium
brand
Organic India Tea &
Infusions – priced at
15-20% premium over
Tetley
55%+
Gross margin;
Margin accretive to
TCPL’s portfolio
Public
…with a strong supply-chain moat and end-to-end certifications
for organic products…
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Long-standing relationships with farmers enables flexible sourcing End-to-end certifications for organic products
Works directly with ~2,500 farmers across ~11,000+ acres of
Organic Certified Land in ~120 villages with low teens utilization
Indirectly associated with an additional 12,000+ farmers
Pioneered commercial cultivation of Tulsi
Introduced high value medicinal and non-medicinal crops cultivation
~130 members strong operations team including Agri development
and procurement division
Organic India is the preferred buyer
State of the art manufacturing with low utilization
Non GMOHACCP Fair Trade COSMOS Japan Agricultural
Standards
European
Commission
USDA
International certifications
National certifications
National Program for Organic
Production (NPOP)
Jaivik
Bharat
GMP (ISO-
9001:2008)
FSSC 22000
Quality certifications
Manufacturing,
Procurement,
Processing and
Warehousing
Empowers OI to procure high-value crops effectively
Enables entry into other key organic products categories
globally such as quinoa, pulses, etc.
Uttar Pradesh Rajasthan
Madhya
Pradesh
Uttarakhand
Public
…providing a unique opportunity to strategically develop a “high-
growth”, “high-margin” health and wellness platform
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TCPL TAM to expand by ~82K Cr globally
Source: Management Estimates
Growth
Drivers
Rising number of
health-conscious
individuals
Increasing awareness Higher demand for
Natural and
traditional herbal
Products
Preference of
Preventive over
Curative approach
Increasing Research
& Product
Development
Rising lifestyle
ailments and obesity
leading to wellbeing
management
7,000
12,000
FY23 FY28E
75,000
110,000
FY23 FY28E
(INR Cr.)(INR Cr.)
Winning customer trust is
key to its success
Diversify geographically
with exports contribute 50%+
revenue at higher margins
Potential to add products in
allied categories like
protein nutrition, child
nutrition, etc.
Premium and organic
products that command
higher margin
Operates in high growth
and highly fragmented
market
Public
…by leveraging Tata Consumer’s existing distribution strength and
unlocking the pharma channel with a relevant product basket
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Tata Consumer to drive exponential revenue growth for Organic India
Massive potential to leverage Tata Consumer’s domestic
distribution prowess with...
…Opportunity to unlock pharma channel and maximize
export potential
TCPL and OI are present
TCPL presence significant; OI’s presence
limited
OI’s presence is significant; TCPL presence is limited
and maximize export potential through cross-synergies
Organic India’s products
are listed in premium
outlets chains in the US
(Whole Foods, Sprouts
and Natural Grocer, etc.)
TCPL to develop the pharma channel
with OI’s robust product portfolio
and cross-sell other brands
OI in 24k outlets
Deliver higher growth in MT (~3%
1
)
and E-commerce (22%
1
)
Drive expansion in export countries
with strong Tata Consumer presence
1. of domestic revenue
Public
In summary
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Unparalleled end-to-end organic certifications, domestic and international, across the supply chain leading to high
customer trust
Robust sourcing and scalable back-end infrastructure for organic products combined with farmer network enabling
procurement of current and new crops
Product categories and Margin accretive: Operates in complementary categories with no overlap to TCPL’s existing product
portfolio; High margin business: 55%+ gross margin
Provides an opportunity to develop a high-growth, high-margin health and wellness platform with the leading “better for
you” organic brand
In line with our strategic priority to expand TAM by expanding into adjacencies with high-growth and high-margin
categories; INR 82,000 Cr TAM globally and Horizon 3 segment with substantive growth opportunity
Strengthen exports by cross leveraging TCPL’s and Organic India’s export presence
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Potential to capture significant revenue and cost
synergies
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Significant synergies to boost growth and enhance EBITDA Margin
Revenue Synergies Cost Synergies
Increase GT footprint
Deliver high growth in MT and
E-commerce
Enhance export footprint
Optimize trade margins
Optimize selling expenses
Fixed cost optimization
Higher capacity utilisation
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Transaction Overview
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Transaction
Structure
Upfront purchase of upto 100% stake
Potential earnout linked to FY26 financial performance
TCPL to acquire 75% stake upfront; balance 25% to be acquired within 3
years
TCPL to have full operating control and majority in board representation
Ajay Gupta to continue as consultant
Transaction Value
Enterprise Value of INR 1,900 Cr
— Translates to 5.2x FY24E Net Sales
— Expect strong sustained double-digit top line growth
Upfront purchase of 75% stake at an Enterprise Value of INR 5,100 Cr
— Translates to 6.8x FY24E Net Sales
— Expect strong sustained double-digit top line growth
Financing
Combination of cash reserves available to TCPL, debt and equity issuance through Rights Issue or any other mode (subject to Board approval)
Impact on financials
EPS breakeven in second year of operations and accretive thereafter
Cash EPS accretive in first full year of operations
Transaction
Timelines
Closing anticipated in Q4FY24
Operational integration to commence shortly after Closing; to be completed within 3-4 months
Significant double-digit growth and margin accretion expected in near term
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Financial Advisor
Due Diligence Advisors
Legal Counsel
Technical Due Diligence Advisor
Advisors to TCPL
