NEW DELHI: The aggressive efforts of Kolkata-headquartered business conglomerate ITC to foreshorten its dependence on tobacco while transforming itself into a consumer goods giant is beginning to bear fruit. The cumulative sales of eight non-cigarette brands touched Rs 14,300 crore in 2018-19 fiscal, driven by brands such as Aashirvaad Atta, Sunfeast biscuits and Bingo! chips and snacks.
According to a recent investor’s presentation, Aashirvaad Atta crossed Rs 4,500 crore sales in FY19, followed by Sunfeast biscuits at Rs 3,800 crore and Bingo! snacks at nearly Rs 2,500 crore. Sales of brands such as YiPPee! Noodles and Classmate notebooks were at a combined Rs 2,500 crore each, while that of Mangaldeep joss sticks and Candyman toffees were at Rs 500 crore each.
The company’s personal care segment, however, is yet to break into the Rs 1,000 crore plus category with brands like Vivel raking in Rs 500 crore. “Our FMCG has achieved impressive market standing in a relatively short span of time,” said Sanjiv Puri, CMD, ITC, in the recent annual report. Total consumer spend across the 25 brands grew 25 per cent to over Rs 18,000 crore in FY19 from Rs 14,000 crore in FY17.
According to the company, currently its branded packaged food business is the third largest after Parle Products Pvt Ltd and Britannia Industries Ltd. Despite multiple challenges such as tight liquidity conditions and sluggish rural demand, ITC’s revenue from the FMCG sector (excluding cigarettes) grew by 12 per cent at Rs 12,505 crore in FY19. EBITDA for the year registered a robust growth of 51 per cent to Rs 688.25 crores from Rs 455.58 crore in the 2017-18 financial year.
To speed up growth of its branded packaged food business, ITC will enhance its portfolio in the existing categories and tap new food categories, Puri said. Growth in the branded packaged food business will also be fuelled by its entry into fruit, vegetables and seafood, adding one new product every quarter and scaling up presence in juices, chocolates, coffee and dairy segments. To strengthen reach in the rural areas, ITC has also lined up investment of Rs 25,000 crore to build integrated factories for consumer goods with logistics facilities. Broadly, ITC’s foods business is set to play a big role in helping the company reach its target of Rs 1 lakh crore for the FMCG segment by 2030.