AI transforming FMCG operations across functions, says Tata Consumer Products

New Delhi: Artificial Intelligence (AI) is playing a significant role in reshaping operations within the fast-moving consumer goods (FMCG) sector, according to Tata Consumer Products (TCPL). The company expects that investments in AI and digital infrastructure will enhance operational efficiency and responsiveness.

Speaking at the company’s annual general meeting, TCPL Director P B Balaji said, “Companies that embed AI deeply into operations will lead the next phase of value creation.” He noted that AI is influencing functions across the board from demand forecasting to inventory management and pricing.

“Artificial Intelligence is also rapidly transforming every function, right from demand forecast to inventory optimisation and pricing resilience to pricing intelligence,” Balaji stated. He added that digital-first marketing and hyper-personalisation are altering how brands engage with consumers in the FMCG space.

He further said, “Our investments in AI, talent, and the digital ecosystem will help us operate with greater precision and speed,” highlighting the company’s approach to adopting technology. Balaji described the firm as having “a strong foundation, which has been shaped by the values of the Tata Group, and a portfolio of purposeful brands, a resilient operating model.”

The director also pointed to changing consumer trends, with increasing demand for health-focused and organic products. He described a broader shift towards “premiumisation”, even in categories such as staples.

TCPL, established five years ago following the merger of Tata Chemicals’ consumer products business with Tata Global Beverages, now operates across several categories. It reported a revenue growth of 16 % for FY25, with EBITDA rising 8 % and net profit increasing despite ongoing input cost inflation. Over the longer term, the company said it has achieved annualised revenue growth of 13 %, EBITDA growth of 14 %, and net profit growth of 23 %.

Commenting on broader economic conditions, Balaji acknowledged that global growth is expected to slow in the near term, but added that India continues to be one of the fastest-growing major economies. He also noted that consumer preferences are shifting due to factors such as urbanisation and time constraints, leading to increased demand for convenience products like cooking aids, ready-to-drink beverages and snacks.

Managing Director and CEO Sunil D’Souza said TCPL has moved into the ranks of the top 10 FMCG companies in India. He highlighted growth businesses such as Tata Sampann, Tata Soulfull, RTD, Capital Foods and Organic India, which together account for 28 % of the company’s India business.

D’Souza also pointed to a 57 % increase in e-commerce revenue, including quick-commerce, in FY25. On the innovation front, he said, “We have had a launch, one launch every nine days in the last year,” and added that innovation contributed 5 % to the company’s total sales during the year.

The meeting began with a minute’s silence in memory of the victims of a recent plane crash in Ahmedabad. “Words are no consolation right now, but our thoughts are with the families and the loved ones of the people who died and were injured in the crash,” said Balaji. The AGM also paid tribute to former Tata Group chairman Ratan Tata, who passed away in October last year.