Digital will be at the cutting edge of ITC’s FMCG business

The non-cigarettes portion of ITC’s FMCG business grew by 19.6 per cent in financial year 2022-23 (FY23), with Ebitda margins at 10.2 per cent or an increase of 1.2 per cent. Digital will continue to be used to drive superior consumer insight and innovation, deepen consumer engagement, and enhance brand royalty, according to the company’s annual reports for FY23. In pure revenue terms, this business (referred to as FMCG – others) stood at Rs 19,122 crore for the fiscal, with growth having come “amidst elevated commodity prices.”

The report states that cutting-edge digital technologies including Industry 4.0, advanced analytics, big data and industrial Internet of Things (IoT) continue to be deployed “towards strengthening [the] company’s real time operations and execution platform, enhancing productivity, driving efficiency and cost agility.” All these initiatives rest on the pillars of synchronised planning and forecasting, an agile, resilient and efficient supply chain, smart buying and value engineering, smart manufacturing and smart demand capture and fulfilment. “Strategic investments have been stepped up to build platforms of insights by harmonising and integrating large and isolated datasets powered by AI/ML technologies and ‘human-centred design’ and visualisation tools.”

Digital and a thrust on research and development have stood ITC in good stead. During the year, over 90 new products anchored on the vectors of health and nutrition, hygiene, protection and care, convenience and on-the-go, indulgence, among others, were launched across target markets, says the annual report. “This was by leveraging the R&D platforms of your company’s Life Sciences and Technology Centre (LSTC) and agile product development teams across businesses.”

The business segment, now placing it among the top FMCG companies in India, has categories such as branded packaged foods, personal care products, education and stationery products, incense sticks (agarbattis) and safety matches. “Your Company’s vibrant 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 nearly Rs 29,000 crores and reaches over 230 million households in India. These home-grown, purpose-led Indian brands, powered by agile innovation, support the competitiveness of domestic value chains, especially in the agri space, thereby ensuring creation and retention of value within the country,” it adds.

Meanwhile, ‘Sixth Sense’, the marketing command centre and consumer data hub, which is an AI-powered hyper-personalised platform backed by a robust partner ecosystem for content and data, is being increasingly utilised to gain insights on market trends and consumer behaviour. “It is also used to synthesise the same to craft contextual and hyper-personalised brand communication and product development. Over 3,000 content assets have been deployed leveraging this capability within a relatively short span of time at significantly lower cost. Your Company continues to leverage deep consumer insights and cutting-edge R&D capability to address present and emergent consumer need spaces.”

In terms of market position, Aashirvaad is the largest in branded atta as also Bingo in the bridges segment of snack foods, Sunfeast in cream biscuits, Classmate in notebooks, while Yippee and Mangaldeep are the No 2 in the noodles and agarbattis. “Your company is well-poised to address value-added adjacencies and categories of the future by leveraging the 25+ powerful mother brands it has established over the years,” states the report, before outlining brand extensions such as 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; classmate to writing instruments; Savlon to sanitisers, wipes and disinfectant sprays etc. ITC’s performance, across its businesses, has been recognised by investors, with the stock up by over 160 per cent in the last one year.