ITC recorded an annual consumer spend of over Rs 24,000 crore in FY22 in the FMCG business, wherein the company operates with over 25 mother brands in segments including food, personal care, education, and stationery, as per its latest annual report.
The FMCG business of ITC has grown at an “impressive pace” over the past several years and achieved impressive market standing in a relatively short span of time, said the company which still gets around half of its revenue from the tobacco business.
ITC’s portfolio of “over 25 world-class Indian brands, largely built through an organic growth strategy in a relatively short period of time, represents an annual consumer spend of over Rs 24,000 crore and reach over 200 million households in India,” the annual report said.
Its home-grown, purpose-led Indian brands support the competitiveness of domestic value chains, especially in the agri space, thereby ensuring the creation and retention of value within the country, said ITC, adding the total addressable market expansion potential is among the highest in the Indian FMCG space.
Annual consumer spend is the sum which a consumer spends finally on buying goods. This is a combined revenue from the sale of products including trade margins and taxes.
ITC, which owns brands like Aashirvaad, Bingo, Sunfeast, Classmate, Savlon, and YiPPee, “remains focused on rapidly scaling up the FMCG businesses anchored on strong growth platforms and a future-ready portfolio”, the report said.
“Recent examples of such brand extensions include Aashirvaad to Dairy, Ready-to-Eat, Vermicelli, Salt, and Spices; Sunfeast to Dairy Beverages and Cakes; Bingo to Namkeens; ITC Master Chef to Frozen Snacks and cooking pastes; Savlon to surface and clothes disinfectant sprays, sanitizers, masks, etc,” it said.
In FY22, cigarettes contributed 39.68 percent of ITC’s total turnover, while FMCG others which consist of its branded packaged foods businesses, personal care products; education and stationery products, safety matches, and agarbattis; apparel, etc contributed 27.01 percent.
Agri business, paperboards, paper & packaging, and hotels contributed 20.52 percent, 10.63 percent and 2.16 percent, respectively.
ITC turnover for the year ended March 31, 2022, was at Rs 59,101.09 crore.
Besides, ITC is proactively pursuing value-accretive acquisition, joint venture, and collaboration opportunities in strategic areas towards accelerating growth and value creation for its FMCG business.
The Kolkata-headquartered company remains focused on building purpose-led brands powered by agile innovation and anchored on larger consumer needs.
Its businesses continue to increasingly leverage ‘sixth sense’, the Marketing Command Centre, and Consumer Data Hub — an AI-powered hyper-personalised platform backed by a robust partner ecosystem for content and data — to gain insights on market trends and consumer behaviour.
“Over 110 new products were launched across target markets during the year, leveraging the robust innovation platforms of ITC’s Life Sciences and Technology Centre (LSTC),” said ITC.
It is also working on digital-first brands such as strengthening its presence in the premium skincare space through ‘Dermafique’.
Its D2C platform, ITC e-Store, is now operational in 15 cities offering consumers on-demand access to a range of FMCG products across 45 categories and over 700 products.
ITC has covered significant ground and scaled up its digital investments exponentially in recent years, it seeks to embrace digitalisation as a foundation capability, vital to accelerating value creation, offering novel ways of interacting with consumers and reconfiguring value chains, and transforming business models.
In the agri business, ITC is enhancing its Value-added Agri Products (VAAP) portfolio comprising spices, coffee, frozen marine products, and processed fruits among others for domestic and export markets.
ITC contribution from exports also went up 15.77 percent of its total turnover in FY22 from 10.75 percent in previous year. ITC exports to over 100 countries. It is one of India’s largest exporters of agri commodities.
“ITC will also be exploring additional opportunities for growth through value accretive M&As as well as enhanced investments to drive exports,” it said.
Foreign exchange earnings of the ITC Group over the last 10 years aggregated nearly USD 8.2 billion, of which agri exports constituted 59 percent.
“During the financial year 2021-22, your company and its subsidiaries earned Rs 11,472 crore in foreign exchange. The direct foreign exchange earned by your company more than doubled to Rs 9,779 crore, mainly on account of exports of agri-commodities,” it said.
ITC branded packaged foods businesses export to nearly 60 countries and plans to “rapidly scale up” by leveraging the brand equity of core brands such as Aashirvaad, Sunfeast, and Kitchens of India and investment-led incentives under the Centre’s PLI scheme.
“The recently announced PLI scheme is expected to provide further fillip to exports of your company’s products across Biscuits & Cakes, Snacks, Dairy and Ready-to-Eat categories,” said ITC, adding it also continues to explore opportunities in proximal markets as a potential vector of growth going forward.