What made ITC launch 70 products in the non-cigarettes FMCG space?

Engaged in the marketing of FMGC products, the ITC empire can be segregated into four segments - paperboards, paper and packaging, hotels, and agribusiness. Outperforming its own launches versus the past year, 70 launches were made in the first half of the financial year alone, focused mostly on hygiene, health & wellness, naturals, and convenience. Surprisingly, this exceeds the number of launches in 2019 (60) and 2018 (50).

Cashing in on the changing dynamics of the pandemic-stricken consumer space, the brand is now targeting to record an annual consumer spend of INR 1,000 crore in FY21! 

Market dynamics

Looking to grab a bigger bite in the market share, ITC has shown good operating profitability since FY19 onwards and the trend is expected to see an upward trajectory. Some of the major highlights of the recent launches are:

• The FMCG conglomerate launched products under the hygiene section to continue its traction in the pandemic times. It launched a number of products under the Savlon brand like spray and wipes, germ protection wipes, disinfectant sprays, fabric disinfectant sprays, Hexa sanitizer, and advanced body washes.
• One of the interesting angles to look into is changing consumer behavior which pushed the company to launch ready-to-cook chapattis (Aashirvaad), frozen vegetables (Farmland), and select milk with a daily report card (Aashirvaad), immunity juices (B-Natural), among others.
• Without a shadow of a doubt, the non-cigarettes FMCG sector got a boost, the cigarette business was badly hit declining to 12 percent which was below the expected 7 percent decline due to localized lockdowns. (Source: Motilal Oswal report)
• Due to the deployment of innovative delivery models, expansion in reach, use of alternate channels, agility in execution, and leveraging digital technologies to service market requirements, ITC reported the highest quarterly (September) revenues at INR 3,794.95 crore for all segments, except education and stationery products business.
• Overall, the net revenue of India’s third-largest packaged food company saw a year-on-year decline of 14.4 percent; sequentially, however, it was up 33 percent.

Venturing into the cocoa business

ITC clearly is not witnessing a slowdown in the food segment as indicated by its decision of captivating a lion’s share in the country’s INR 11,000 crore chocolate market. Banking on their proper due diligence and study of the market before debuting with Fabelle, ITC targets to be present in as many segments as possible and cater to every chocolate-loving consumer’s needs, instead of operating just in the self-indulgence and the gifting space.

With a plan to play in the entire segment of the chocolate category including chocolates, chocolate cookies, wafers, and spreads, the company is eyeing top global cocoa suppliers from Madagascar, Ghana, the Ivory Coast, Venezuela, and India!

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