ITC Next strategy redefining growth and profitability in FMCG Businesses – Sanjiv Puri

ITC chairman and MD Sanjiv Puri

In the Company’s 112th AGM address Mr. Sanjiv Puri, Chairman and Managing Director, ITC Ltd, shared his Vision on ITC: Nation First - Transforming for our Shared Tomorrows. Relevant Excerpts from the speech is below:

The ITC Next strategy for ITC’s FMCG Businesses has redefined the critical pathways to growth and profitability by building a future-ready portfolio focused on fortifying and scaling mega brands, leveraging these brands to address value-added adjacencies and crafting categories of the future. Innovation, brand investments, reach and digitalisation are driving premiumisation as well as penetration-led growth. In a relatively short span of time, ITC has built a portfolio of 25-plus vibrant brands in the FMCG Businesses that represent an annual consumer spend of Rs 29,000 crore. It is a source of immense satisfaction that 2 of our flagship brands are already in the league of over Rs 5,000 crore, whilst 5 more brands have touched spends between Rs 1,000 crore and Rs 4,000 crore. More importantly, these brands anchor competitive domestic value chains that foster large-scale livelihoods as well as local entrepreneurship.

New Product Launches

Over the past 3 years, nearly 300 new products were launched, including several premium products, leveraging the innovation capacity of ITC’s Life Sciences & Technology Centre. Some recent examples include: ‘Sunfeast Dark Fantasy’ Desserts, 'Engage L'amante', ‘Classmate Interaktiv’ notebooks and so on. Mega brands are also addressing adjacencies such as ‘Aashirvaad’ range of frozen breads, vermicelli, fresh paneer slices and ‘Sunfeast Dark Fantasy’ milkshakes.

ITC Mission Millets

In line with the strong need for healthy ‘good-for-you’ products, ITC launched the ‘Help India Eat Better’ initiative a couple of years ago that focuses on affordable, accessible and planet-friendly nutrition. Furthering this initiative, ITC recently launched the ‘ITC Mission Millets’ programme. This Mission is founded on a 3-pillar model that encompasses development of a 'good-for-you' portfolio, implementation of sustainable farming and enhancing consumer awareness. Together with supporting FPOs in the millet value chain, two PPP projects have been implemented in Maharashtra and Andhra Pradesh, in partnership with Indian Institute of Millets Research. An extensive portfolio is being rolled out for every meal occasion, age and format. In this context, ITC also invested in Yoga Bar that has a portfolio of premium products, including millet-based offerings, catering to health-conscious consumers.

ITC’s Purpose-led Brands

ITC believes that brands must serve a larger societal purpose and leverage the substantial market interventions to positively influence social change. This belief drives our efforts to build purpose-led brands. Several of ITC’s brands lead purposeful initiatives in areas that can make a meaningful difference. The ‘Mangaldeep’ brand has empanelled visually impaired persons as fragrance testers, fostering a life of dignity and hope. ‘Fiama’ espouses the cause of addressing mental health issues. ‘Vivel’ champions women’s empowerment. The ‘Savlon Swasth India’ programme which orchestrates hygiene behaviour, has covered over 8,000 schools reaching out to over 2 million students. ‘Classmate All Rounder’ programme aims at holistic skill development, covering over 3,00,000 school students. ‘YiPPee!’s Terra programme upcycles post-consumer plastic wrapper waste into attractive laptop sleeves, tote bags and so on.

ITC’s investments in ICMLs creating agility in market responsiveness

In my address last year, I had highlighted the investments in Integrated Consumer Goods Manufacturing and Logistics Facilities (ICML) at strategic locations towards deriving economies of scale and scope, creating agility in market responsiveness and optimising logistics with delayering of operations. Recently, we commissioned our 11th ICML in Khordha, Odisha. The integrated Ancillary Manufacturing and Logistics Facilities in Pudukkottai and Kapurthala utilise robotics and automation to enable seamless market servicing and superior operational efficiencies. These ICMLs now span a built-up area of more than 6 million sq.ft., and together with other facilities, ship out more than 56 million packs of ITC’s products every day. With a view to optimising cost and quality, ITC’s agri value chains are being integrated, enabling proximal sourcing in the vicinity of the ICMLs.

The FMCG industry offers immense opportunity for growth. The market size of the FMCG segment is estimated to be upwards of Rs. 21 trillion by 2030 and the addressable market for ITC’s carefully curated FMCG portfolio is estimated to be about Rs. 5 trillion. The multi-dimensional interventions of ITC Next position ITC well to harness the significant market potential, attain leadership in every segment and create growing value for all stakeholders.

Indian brands that are globally competitive can foster substantial value retention in the domestic economy by creating robust supply chains within the country.

This opportunity to contribute meaningfully to a ‘Viksit Bharat’ inspires ITC to build its FMCG Businesses at scale powered by world-class brands that cater to evolving consumer aspirations.

(Disclaimer: Moneycontrol Journalists were not involved in the creation of the article.)