ITC to go aggressive on acquiring FMCG brands; eye on D2C space

Diversified conglomerate ITC Ltd. is planning to expand its presence in the fast-moving consumer goods (FMCG) market by acquiring more brands with an eye on the direct-to-consumer (D2C) space. The Kolkata-headquartered firm that has already made a slew of key acquisitions in the past few years, is now betting aggressively on the inorganic route.

As per its chairman and managing director, Sanjiv Puri, the company is now proactively exploring opportunities for acquiring FMCG brands. Puri, who held ITC’s first ever analysts meet yesterday, reiterated the management’s vision on its trusted inorganic way of growth.

The “company wants to bring in inorganic expansion in a big way considering its main focus has been organic so far,” said Abneesh Roy, executive vice-president at Edelweiss Research, who attended the meet.

If ITC’s recent track record is something to go by, its declaration of taking the inorganic route implies that the market may witness serious traction in the M&A space in coming quarter. In the recent past, while the behemoth has been mostly reliant on organic growth and scaling the in-house brands, it has made some key acquisitions.

In fact, a large section of its personal care portfolio is built on brands that ITC acquired over the last one and half decade. Started in 2005, the personal care division marked its foray into the health space with the acquisition of the brand Savlon and Shower to Shower in 2015. In 2017, the business acquired the brand Charmis to enhance its skincare portfolio. In 2018, ITC acquired the brand Nimyle to enter the floor cleaner space.

Later, with the COVID-19 pandemic rattling the country in 2020, the recent acquisitions boosted its business. The personal care products division launched multiple personal and home hygiene products and entered the fruit and vegetable wash category under mother brands like Savlon and Nimyle, among others.

Its successful acquisitions are not limited to personal-care space. In food and beverages, crucial deals like acquisition of the B-Natural brand in 2015, paved its way for entry into the fast-growing fruit juices market. Currently, the brand holds the third position after Dabur’s Real and Tropicana from PepsiCo. In last July, ITC acquired spices maker Sunrise Foods, that markets spices under a popular brand Sunrise in the eastern parts of the country, against Rs 2,150 crore.