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Sanjiv Puri’s ‘ITC Next’ strategy to drive into commanding position in FMCG industry market

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Powered by mega brands such as Aashirvaad, Sunfeast, Bingo!, Classmate, and Savlon, ITC is set to drive into a commanding position in what some analysts have estimated to be a Rs 5 lakh crore addressable FMCG industry market segment by 2035, with Chairman Sanjiv Puri putting in motion a carefully crafted ‘ITC Next’ strategy.

This re-crafted strategy, built around portfolio revitalisation, rapid platform-based innovation, aggressive digitisation, deeper synergies with other group businesses, structural leverages and a sharper focus on margins.

As an FMCG major, ITC is the only company that is dominant across a range of product categories from branded atta to biscuits; snacks to spices; noodles to dairy; chocolates to coffee; juices to frozen snacks and vegetables; deodorants to hand and body wash; sanitizers and masks to floor cleaners; and from notebooks to agarbatti, that none of the other Indian or multinational brands can claim to be present in.

Puri’s ‘ITC Next’ strategy pivots around a multi-pronged approach to revitalize the company’s current FMCG portfolio by fortifying and scaling up its proven megabrands, leveraging adjacencies through horizontal brand extensions, and nurturing new platforms with innovative products that will scale up to be leaders in their respective categories.

Mega brands and adjacencies

ITC has a plethora of megabrands such as Aashirvaad, Sunfeast, Bingo! and Classmate that already command leadership positions in the market.

The strategy of creating value added adjacencies could be best illustrated by the new Aashirvaad portfolio including Aashirvaad Nature’s Super Foods range comprising ragi flour, multi-millet mix, gluten free flour, organic atta and pulses as well as chapatis, instant meals and the Aashirvaad Svasti dairy range.

ITC is also fostering new platforms and strengthening its new brands including Fabelle chocolates, Sunbean coffee, B Natural juices, Nimyle home cleaners, Savlon hygiene products and so on. The overarching strategy for new platforms of innovative products is to first validate the concept and business model in select beachheads. Having gained a dominant market penetration, these new lines of products and brands will gain strength to occupy adjacent markets with different opportunities, building a larger brand with each new product, creating new and steady vectors of growth for the future.

ITC under Puri is unwavering in its resolve to build a formidable FMCG business. With innovation as the new lifeblood, the company today is one of the largest incubators of world-class Indian brands.

The Company’s wide range of FMCG portfolio has demonstrable headroom to expand rapidly in the FMCG industry overall addressable market segment of Rs 5 lakh crore.

For instance, the total size of the packaged snacksmarket for the overall industry is set to vault 4.5 times from about Rs 32,000 crore to an estimated Rs 1.43 lakh crore by 2035. The market for overall spices industry is projected to grow from about Rs 22,000 crore currently to Rs 1.1 lakh crore in 15 years, a growth of five times. Similar industry growths are expected in other categories such as biscuits, branded atta, noodles, deodorants, personal care products and the cleaners categories.

Most of ITC’s FMCG products occupy the first or the second positions in their respective categories giving them unique opportunity to corner most of these segment growths.

Aashirvaad, India’s number one branded packaged atta, itself has a consumer spend of over Rs 6,000 crore.

Digital, consumer-centric and future-ready

Puri’s strategy to make ITC future-ready manifests in his focus on driving the three megatrends emerging out of the pandemic – innovation, digitalisation and sustainability. The Company’s R& D Centre, the ITC Life Sciences and Technology Centre (LSTC) in Bengaluru helped ITC to launch 120 differentiated products amid the pandemic to meet emerging preferences. To further support this goal, the company has set up 9 state-of-the-art integrated consumer goods manufacturing facilities (ICML) to create structural advantages.

Digitalisation is being accelerated pan-ITC through the use of new technologies such as Industry 4.0, Artificial Intelligence, Machine Learning, Big Data, Industrial Internet of Things (IoT), etc. These technologies are also being deployed across the entire supply chain spanning sourcing, manufacturing, trade engagements and e-commerce, including its own ordering platform the ITC e-store. The FMCG business has further driven enhanced competitiveness through a multi-channel distribution strategy which have been strengthened by-customised apps.

Power of Synergies

The ‘ITC Next’ FMCG strategy has also been bolstered by synergies flowing in from the company’s other businesses.

A good example of synergies is ITC’s foods business deriving a significant competitive advantage from agribusiness’s sourcing capabilities. The culinary expertise of ITC’s Hotels business has also enabled ITC to craft differentiated food offerings.

Stronger growth, better margins

The robustness of Puri’s strategy for FMCG is evident from the segment EBIDTA (earnings before interest, taxes, depreciation and amortisation) increasing by by 82 per cent this Q2 from Q2 FY 20, as outlined in ITC’s second quarter financial results.

The FMCG businesses have been posting steady growth ahead of industry peers. During the last four years, ITC’s revenue from FMCG increased from around Rs 10,500 crore to nearly Rs 15,000 crore.

ITC’s FMCG business during 2020-21 grew 16 per cent versus the industry average of 8.5 per cent.

There has also been a steady improvement in profitability in the FMCG segment, with EBITDA margins having improved by more than 640 basis points between 2016-17 and 2020-21.

‘ITC Next’ strategy for other businesses

In August, at the company’s annual general meeting, Puri unveiled the extensive ‘ITC Next’ strategy to architect the structural drivers that will power ITC’s next horizon of growth and ensure that the enterprise remains future-oriented, consumer-centric and nimble.

ITC’s other businesses too have pivoted to create new frontiers for the future, with enhanced competitiveness as well as sharper focus on cost management to strengthen leadership or rapidly attain the top positions in the case of newer segments.

Some of the key drivers of growth, as identified by Puri, for ITC’s other businesses include an asset right strategy for Hotels powered by a repositioned WelcomHotel brand as well as newly launched brands such as The Storii and Mementos done with management contracts. Two management contracts have already been signed under the Mementos brand.

Similarly, in the Paperboards business, the company is concentrating on sustainable packaging and value-added paper, while in agriusiness, the emphasis is on Next Generation agriculture driven by the ‘super app’ ITC MAARS and value-added agriculture.

Special strategic thrust is also being provided to ITC Infotech, the wholly owned subsidiary which is on a strong growth and profitability trajectory over the last few years.

Business

PM Modi to hand over GI certificates for 21 products in Varanasi today

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New Delhi, April 11: Prime Minister Narendra Modi will visit his parliamentary constituency Varanasi on Friday, during which he will distribute Geographical Indication (GI) certificates for 21 newly registered products of Uttar Pradesh.

Of the 21 recipients, nine are artisans and producers from Varanasi, underscoring the city’s role as a vibrant hub of traditional craftsmanship and cultural heritage.

Padma Shri awardee and GI expert Rajni Kant, who has been instrumental in advancing GI registrations across India, shared his views ahead of the event.

“I am playing a small role in the progress of GI in Banaras and the whole of India,” he said.

“Since the GI Act came into force in 2003, this is the first time in the country that GI certificates will be distributed for 21 products in one event, and that too by the Prime Minister,” Kant said.

He highlighted that with these new inclusions, the total number of GI-tagged products from Uttar Pradesh will reach 77, placing it among the top states in India in terms of GI recognition.

“It’s a proud moment, Kashi alone has 32 GI-tagged products, supporting around 20 lakh people and generating an annual business of about Rs 25,500 crore,” he said.

Emphasising the national impact of the GI movement, he said: “The journey that started in Kashi has now reached Arunachal Pradesh and Andaman and Nicobar Islands.”

Apart from the GI event, PM Modi’s Varanasi visit includes inaugurating a transit hostel at Police Lines, new police barracks in Ramnagar, four rural roads, and beautification works along Shastri Ghat and Samne Ghat.

Additional urban development projects under the Railways and Varanasi Development Authority will also be launched.

A major portion of the Rs 3,880 crore development push will focus on upgrading the city’s power infrastructure, including the construction of 15 new substations, the installation of transformers, and laying 1,500 km of new power lines.

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PM Modi calls PM-JAY rollout in Delhi a ‘revolutionary step’ for health sector

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New Delhi, April 11: Prime Minister Narendra Modi on Friday hailed the rollout of the Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana (PM-JAY) in Delhi as a “revolutionary step” for the national capital’s healthcare sector, enabled by the “double-engine” BJP government.

As the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), of which PM-JAY is a component, was officially launched in the national capital on Thursday, 19 residents, including 11 women and 8 men, became the first beneficiaries to receive Ayushman Bharat cards under the scheme.

PM Modi praised the implementation and expressed happiness that the people of Delhi will now benefit from the health scheme.

Taking to X, PM Modi wrote, “A revolutionary step related to Delhi’s health sector! This mission of the double-engine government is going to be extremely beneficial for lakhs of my brothers and sisters here. I am very happy that Delhiites will now also be able to get their treatment under the Ayushman Yojana.”

The PM-JAY rollout in Delhi comes just days after a memorandum of understanding (MoU) was signed on April 5, enabling the implementation of the Modi government’s flagship health scheme in the national capital.

With this, Delhi has become the 35th state or Union territory to adopt the Ayushman Bharat scheme.

The AB-PMJAY is a key component of the broader PM-ABHIM framework, which aims to boost public health infrastructure and improve access to quality healthcare across the country.

Launched in 2018, PM-JAY provides an annual health coverage of Rs 5 lakh per family for secondary and tertiary hospital care, targeting economically vulnerable populations. The scheme is the world’s largest government-funded healthcare programme.

The inclusion of Delhi in PM-JAY marks a significant milestone in expanding healthcare access to low-income families in the capital and reducing their financial burden for critical medical treatments.

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Vishy Anand puts his weight behind Gukesh ahead of high-stake Norway Chess 2025

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Mumbai, April 10: The youngest-ever world champion Gukesh Dommaraju will take on Magnus Carlsen – the world’s No. 1 player in a high-stakes contest — in the most highly-anticipated contest in the world of chess at this year’s Norway Chess 2025. The tournament will take place in Stavanger from May 26 to June 6.

Addressing an event hosted by the Norway Chess and Sports Journalists Association of Mumbai (SJAM) in Mumbai, five-time world champion Viswanathan Anand put his weight behind the prodigy from Chennai.

“I expect a very exciting battle. Gukesh will not lack motivation or the determination to go after Magnus Carlsen. But Magnus is also highly motivated by the challenge of playing against our young players. I’ve seen him in multiple tournaments whether it’s Kolkata or the World Rapid Blitz, he eagerly looks forward to these match-ups and so we have the perfect storm. I think we have the right to expect some great battles,” Anand said appearing at the event virtually.

Gukesh, 18, has achieved remarkable success in 2024, winning the Tata Steel Masters, leading India to gold at the Chess Olympiad, dominating the Candidates Tournament, and finally claiming the ultimate prize in classical chess: the World Championship title in Singapore last December.

This year’s Norway Chess will see a star-studded line-up featuring world No.1 and defending champion Magnus Carlsen (Norway), Hikaru Nakamura (USA), Gukesh D. (India), Fabiano Caruana (USA), Arjun Erigaisi (India), and Wei Yi (China) among the men.

The Norway Chess Women will feature reigning four-time Women’s World Champion Ju Wenjun (China), Lei Tingjie (China), Koneru Humpy (India), Anna Muzychuk (Ukraine), Vaishali Rameshbabu (India), and Sarasadat Khademalsharieh (Spain).

Norway Chess and Norway Chess Women, feature the same format, same prize money, and take place in the same playing hall. Both tournaments follow a 6-player double round-robin format.

From his own experience of playing at the Norway Chess, Anand highlighted the reasons behind Norway Chess being different from any other world event under FIDE’s calendar. This year, with the top 5 in the world participating in Norway Chess, the contest promises to be nail-biting for any chess aficionado following the tournament.

“It is one of the premier events in the sport of chess, and since Norway Chess began in 2013, it has kept on evolving very well. They continue to make the tournament very attractive a demonstration of what chess is all about. They always have some extra tweaks to make it very interesting, whether it’s the confessional booth or now the Armageddon. It’s a very innovative tournament, and the levels of competition are simply outstanding,” Anand said.

He further added, “And for Indian chess, the fact that we have four players, says a lot. On the men’s side, Indian chess is as strong as it’s ever been. Even more so obviously due to the depth we have. But it’s great that Koneru Humpy is still competing so successfully and that she’ll be joined by Vaishali as well, which bodes well for us.”

Visiting India to explore partnerships, Kjell Madland, the Managing Director and visionary behind Norway Chess expressed a keenness to expand further.

“Norway Chess is absolutely honoured to be hosting the Gukesh and Magnus clash, especially on the back of Gukesh’s incredible run of form. Both the champions will have a couple of chances to go after each other which bodes very well for Norway Chess,” he said.

“And hopefully, next year, Norway Chess can host this exact fixture in India as well, where there are so many champions. The quality of chess in India over the last ten years has been, and for sure, the sport would be poorer without the Indian champions,” he added.

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