When A ₹1 Lakh Cr FMCG Major Makes Its AI Push

FMCG major Tata Consumer Products (TCPL) has been making big strides with artificial intelligence (AI) lately to enhance its operations and market presence. With a market capitalisation of Rs 1.04 lakh crore and recorded revenue of about Rs 15,200 crore in FY24, the company is looking to leverage AI to drive efficiency and growth across its vast network, which spans 40 countries, 263 million households in India and 4 million retail outlets.

Sunil D’Souza, MD & CEO at TCPL, spoke on the company’s proactive approach to integrating AI. “We have a dedicated team specifically for AI use cases,” he said during a recent press roundtable at TCPL’s R&D facility in Bengaluru. “Everyone wants AI as a shiny new toy, but the key is creating value from it.” 

This value creation is already being rolled out via TCPL’s marketing strategies, where AI-driven personalised advertisements have already made a mark. For instance, the company’s premium product the ‘Himalayan Saffron’ ad was entirely AI-generated and allowed TCPL to tailor its communications based on individual consumer profiles online.

AI In Sales

Beyond marketing, AI is also augmenting TCPL’s sales operations. The company is looking to implement a new AI-powered Salesforce application for its 4,500-5,000 salesmen across the country. “We’ve established a centre of excellence (CoE) that utilises AI at the backend to prompt salesmen on what to sell and push customised promotions at specific outlets,” D’Souza explained. This AI capability reportedly enhances the precision of product recommendations and promotions to drive sales in an increasingly competitive market.

However, AI’s impact at TCPL is not limited to customer-facing functions. In the backend, D’Souza said AI could aid in forecasting, blending the art and science of predicting market trends and managing inventories more effectively. 

“Forecasting is somewhere between an art and a science, so AI can come in with the science part of it,” noted the TCPL CEO. This integration of AI in forecasting is expected to streamline inventory management, reducing costs and improving efficiency.

An Internal ‘ChatGPT’ For Research

The FMCG company has internally launched an AI chatbot equivalent of ChatGPT to be cautious with data security in its generative AI initiatives. “We’ve created our own internal search engine so that we only put out very specific dedicated keywords, ensuring our information doesn’t go out,” D’Souza said.

The internal generative AI tool, launched recently, is already proving to be useful in research and development (R&D) front. It is further expected to be a game-changer in the long-term. 

“Instead of taking a week for one person to infer data from a 60-page document, AI can streamline this process, which helps the process,” Vikas Gupta, Global Head of R&D at TCPL explained. This efficiency apparently enables the R&D team to focus on innovation and quick concept testing, driving faster product development cycles.

According to a recent report by MarketResearch.biz, Generative AI in FMCG Market witnessed a valuation of USD 7.8 billion in 2023. Projections indicate that this number is expected to touch USD 57.2 billion by 2033, growing at a CAGR of 22.6 per cent from 2024 to 2033.

TCPL rivals such as HUL, ITC and Nestlé are also utilising AI-powered analytics to understand consumer behavior and preferences better.

“The second major use case for AI in R&D is integrating multiple sources of trends and ideas, which can be quite challenging. Scientists often follow their own hypotheses and interpret data to support their beliefs. However, leveraging data’s power via AI to bring objectivity into analysis allows us to consider inputs from various sources. This approach helps R&D better understand consumer needs and strengths, leading to a better focused and innovative strategy,” Gupta added.

TCPL is collaborating with TCS and its AI.Cloud unit, as well as multiple companies, to augment its AI-based technological capabilities.

“We are understanding what the needs of (Tata) group companies are and bringing our expertise to assist wherever we can in implementing along with our partners. Pilots have been done and we have participated in them. We are also helping them productionise them as well,” Krishna Mohan, VP & Deputy Head of AI.Cloud unit at Tata Consultancy Services (TCS) told BW Businessworld in a recent interaction.

However, the integration of AI and generative AI at TCPL is still in its early stages and the company continues to explore various use cases to maximise its benefits. While cost reductions are anticipated, the primary focus remains on enhancing sales and operational efficiency. “It’s early days, genuine use cases will see accelerated adoption where AI demonstrates clear benefits,” TCPL CEO Sunil D’Souza concluded.