ITC to go against the tide, pace up product rollouts amid slowdown

KOLKATA|MUMBAI: ITC Ltd will accelerate the rollout of new FMCG products, bucking the industry trend amid consumption slowdown, aiming to drive sales and capture market share, said executive director B Sumant. ITC, a late entrant in the FMCG goods space, will launch 50-plus products in the next financial year and is on course to introduce 17 products during the current quarter, which is traditionally the slowest due to exams.

“Even during a slowdown, consumers look for variety and value-added attributes in products. Our primary focus is to drive demand and grow consumer franchise with the launch of innovative and differentiated products,” said Sumant, responsible for ITC’s FMCG business. “The focus is on pursuing accelerated growth with profitability.”

The maker of Aashirvaad atta, Bingo snacks and Sunfeast biscuits does not want to change its strategy during short-term disruptions. This is in contrast to most leading FMCG companies, which slow down their launches of new products due to poor consumption.

ITC is bringing out low-priced units, such as Rs 5 packs, in almost every category to both retain customers and get newer consumers who have cut down on their daily necessity spending.

The company will debut its FMCG e-store in the next financial year and is scouting for investment in FMCG startups after picking up a stake in a vending machine company recently.

For ITC’s non-cigarette FMCG business, earnings before interest, tax, depreciation and amortization increased 43% to Rs 658 crore in the nine months ended December. Ebitda margins improved to 7.7% in the October-December quarter from 5.4% a year earlier even after the cost impact of new launches.

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The company is targeting to become India’s largest FMCG company with sales of Rs 1 lakh crore by 2030, an eightfold increase from Rs 12,505 crore grossed in 2018-19. Among its recent launches, ITC introduced lentil-based baked chips, 2-in-1 pocket perfumes and preservative-free frozen snacks. It is looking to reinvigorate the stagnant cream biscuit category with newer products such as jam tarts.



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