ITC charts 3-piece recipe to boost biz growth

Mumbai: Diversified consumer good conglomerate, ITC is currently working on three pieces to its portfolio strategy.

ITC Chairman & Managing Director Sanjiv Puri says: "There are three pieces to our portfolio strategy. One is to fortify the core, which includes our large brands like Aashirvaad, Sunfeast, Bingo, Classmates, YiPPee, Savlon, Mangaldeep. Another good example is Savlon, which was originally essentially a soap and a hand wash brand. Today it traddles many more value-added segments. Of course, some of them were unique to the pandemic, but there are others that provide — there are pieces that provide continued opportunity."

The third piece is creating the new vectors of the growth, investing in categories of the future. An example of these includes ITC Master Chefs, Nimyle, B Natural. And there are certain categories which we are incubating, which we are validating the right to win, which we are perfecting the model and when we are ready, we will progressively scale up. As a strategy, we are going to scale up only a certain number of categories at any point of time even if we are ready.

According to Puri, "we will calibrate the scale up because each category that we scale up requires enormous attention from the enterprise. And the categories we have chosen are categories where there is huge headroom to grow."

So in fact, our estimate is that we have amongst the highest addressable space in the FMCG landscape because we straddle many segments that have got huge headroom to grow on account of penetration and on account of the capita incomes, and this is a chart that illustrates this for some of our categories, he said in an investors' call.

Diversified consumer good conglomerate ITC has emerged as a powerful innovation engine.

ITC's FMCG business launched over 120 products since Covid-19 stuck the world. Diversified consumer good conglomerate ITC emerged as a powerful innovation engine, demonstrating nimble-footed agility in launching more than 120 new products, tailored to meet specific consumer needs during the Covid-19 pandemic. The Company responded with resilience to the disruptions caused by the pandemic, swiftly putting in motion product innovation, forging unique partnerships to serve consumers at their doorstep and accelerated the pace of digitalisation for efficiency and scale up. The growth in the FMCG business can be seen in the current results too.

On February 3 ITC reported standalone profit after tax (PAT) of Rs4,156.20 crore for the December quarter, up by 12.7 per cent against Rs3,687.88 crore reported in the year-ago period. It beat the street expectations by 5 per cent.

ITC launched 70 new products during April-September 2020 itself and another 50 and counting, in the later months to cater to the changing dynamics of the pandemic-stricken consumer space.

ITC is perhaps the only company in India that is dominant across a range of product categories from snacks to spices, biscuits to branded atta, noodles to dairy, chocolates to coffee to juices, deodorants to hand and body wash and hygiene products to floor cleaners.

During the pandemic, leveraging its R&D capabilities at the Life Sciences and Technology Centre, ITC swiftly launched a range of first to market products under the Savlon brand – disinfectant sprays, fabric disinfectant sprays, spray and wipes, germ protection wipes,

Hexa sanitiser and advanced body washes – many of which were conceptualised, manufactured, launched, scaled up and distributed during phases of lockdown. The focus on naturals led to new product introductions such as Nimeasy and Nimwash besides Nimyle under the Nim brand.

Other launches include ready-to-cook chapattis (Aashirvaad), Select milk with a daily report card (Aashirvaad), immunity juices (B-Natural), frozen vegetables (Farmland), and a range of Frozen snacks under the ITC Master Chef brand.

Chairman Puri's ITC Next strategy pivots around a multi-pronged approach to revitalise the portfolio by strengthening power brands such as Aashirvaad, Sunfeast, Bingo, Classmate, addressing brand adjacencies as well as incubating new categories for the future.

Puri's strategy to make ITC future-ready is powered by various platforms and Centres of Excellence at the Life Sciences and Technology Centre (LSTC). ITC's LSTC has been at the core of the company's drive for science led product innovation to support and build its wide range of product portfolio, including developing a nasal spray for Covid-19 prevention for which it has initiated clinical trials.

LSTC helped ITC to launch 120 products amid the Covid-19 pandemic to meet emerging consumer preferences. The Company also leveraged its distributed manufacturing footprint including the state-of-the-art integrated consumer goods manufacturing facilities (ICML). This

created structural advantages and enable to deliver faster to consumers across the country. Factories and distribution points were also made operational at breakneck speed to reach essential commodities to consumers at their homes during the initial phases of lockdown. In addition, factories were repurposed to manufacture hygiene products which were the need of the hour.

Digitalisation became the fulcrum of every activity in ITC ranging from digital campaigns to digital ordering and trade engagements powered by customised apps such as the UNNATI and VIRU. Industry 4.0 was implemented in factories to enhance operational and cost efficiency.

During the pandemic, ITC revamped its D2C channel the ITC e-store which showcases its range of over 800 products under one roof and is a valuable platform to garner consumer insights. The ITC Store on Wheels catering to housing complexes was a novel initiative.

Elaborating it, Puri said: "ITC's tie up with Havmor icecreams for its Master Chef frozen snacks or partnership with Amway for its B Natural immunity juices developed new innovative routes to market with agility."

ITC was also able to complete an acquisition – that of Sunrise Foods – in line with Sanjiv Puri's impetus on value accretive inorganic opportunities. Savlon has demonstrated exemplary performance during the pandemic fostering product innovation at a speed and scale unheard of.