- ITC is set to roll 50 new FMCG products in the next financial year and 17 products in the current quarter despite industry slow down and a decline in demand.
According to executive director B Sumant, ITC Ltd percent would accelerate the roll-out of new FMCG products despite industry facing a decline in demand, seeking to drive sales and gain market share. ITC, a late entrant in the FMCG goods space, will launch 50-plus products in the next financial year and is on track to launch 17 products in the current quarter, which is typically the slowest resulting from examinations.
“The customers are searching for variety and value-added qualities in goods even during a slowdown. Our primary focus is on driving demand and increasing customer franchise by introducing creative and differentiated goods, “said Sumant, responsible for the FMCG sector at ITC.
“The emphasis is on achieving accelerated growth with profitability.” During short-term disturbances, the makers of Aashirvaad atta, Bingo snacks, and Sunfeast biscuits do not want to change their strategy. It compares with most of the leading FMCG firms, which are slowing down their releases of new products due to poor demand.
In almost every segment, ITC produces low-priced packages, such as Rs 5 packs, to both retain customers and to attract new buyers who have reduced their everyday need expenditure.
The company will be debuting its FMCG e-store in the next financial year and after recently picking up a stake in a vending machine company it is looking for investment in FMCG startups.
In the nine months ended December, earnings before interest, tax, depreciation, and amortization fell 43 percent to Rs 658 crore for ITC’s non-cigarette FMCG sector. Ebitda margins increased from 5.4 percent a year earlier, even after the cost-effectiveness of new launches, to 7.7 percent in the October-December segment.
In the nine months ended December, earnings before interest, tax, depreciation, and amortization rose 43 percent to Rs 658 crore for ITC’s non-cigarette FMCG business. Ebitda margins increased from 5.4 percent a year earlier, even after the cost-effectiveness of new launches, to 7.7 percent in the October-December segment.
The company is planning to become India’s largest FMCG firm with revenue of Rs 1 lakh crore by 2030, an eight-fold increase from 2018-19 grossed Rs 12,505 crore. ITC launched lentil-based baked chips, 2-in-1 pocket perfumes, and preservative-free frozen snacks, among its recent launches. With newer products such as jam tarts, it aims to reinvigorate the stagnant cream biscuit segment.
Sumant said in the short to medium term the impact of the slowdown on FMCG consumption is likely to reverse.
“Rural sentiments will recover once the harvest is finished. In the recent Union Budget, the Government has taken a number of steps, especially in the agricultural sector. We are optimistic these steps will improve demand over time by initiating a virtuous investment, growth and employment process, “he said.
The ITC has begun trials with employees in six cities for its e-commerce company. Sumant said the e-store would help to improve the exposure of its products while conventional distributors and e-commerce partners will continue to be the main selling engine.
“We are not going to be competing with any e-commerce company. Our primary objective is to improve transparency by making the entire 1,000-plus stock-keeping units available on a single platform to consumers. With some regional releases, a single retailer can not stock all the items, “he said.
E-commerce constitutes 4 percent of ITC’s FMCG revenue and doubles annually. The company has been linked to Amazon, Flipkart, Grofers, Big Basket, Myntra, and Nykaa.
ITC is the third-largest listed food company with a leading position in packaged atta, cream biscuits and notebooks. In packaged snacks, instant noodles, deodorants, and agarbattis it is the second-largest.
