ITC’s hotels and the firm’s engagement with farmers are helping the company to get a head start in the food business, where it is looking to be the market leader within two years, an official said.
“ITC’s enterprise strengths provide a key competitive advantage, allowing it to deliver differentiated offers in the marketplace,” said B. Sumant President FMCG Businesses ITC.
Within a span of a little over a decade, ITC’s food business has secured a firm foothold and is now the third-largest player by annual sales after Parle and Britannia, according to the latest Nielsen report.
“The culinary expertise of ITC chefs at over 100 group hotels lends invaluable strength to our foods business. They understand the Indian palate and help us make new offerings”, he said. The company’s “ agri-sourcing capabilities help it source directly from the farm-gate...the strategy of going beyond the market has helped ITC offer superior quality and consistency.”
Improve practices
He said that ITC has also worked with Jharkhand farmers to introduce them to, better wheat varieties, improve agriculture practices and even engage with agri-equipment companies to manufacture time and labour-saving devices for the production of wheat.
On the range of spices that ITC has recently introduced in New Delhi, he said that the company worked with farmers to ensure that they followed an integrated pest management programme, making the products compliant with Indian and European standards. ITC’s chefs then step in decide the ratios of the condiments that give the right taste.
On ITC’s FMCG new business target of ₹1 lakh crore by 2030, Mr. Sumant said, “For this, we will have to look at FMCG categories across the board. We will keep growing our portfolio in all segments.”
ITC has recently introduced a ghee brand, partnering milk producers in Bihar. It also set up its first dairy plant in Munger, he said. Products such as fresh milk and other dairy-products is also on the cards. The empowerment of 40 lakh farmers through the e-choupal initiative has yielded dividends in sourcing wheat, coffee, fruit pulp and dairy products.
Rural markets have been an important component of its non-FMCG business growth, Mr. Sumant said. ITC’s rural –urban contribution in terms of the market segment is now 25:75. “Rural growth is a combination of both same store growth and penetration.”
ITC has established a trade, marketing and distribution infrastructure. ITC has over 1,700 wholesale distributors for its new-FMCG products. “ We reach out directly to over 2 million outlets and indirectly to over 4 million,” he said.
Manufacturing through a mix of its own and outsourced units, building integrated manufacturing and logistics hub and cold storages across the country is ITC’s focus area.
It is building 20 integrated hubs, aimed at taking manufacturing units close to the market.
