ITC fights economic slowdown with slew of new pack sizes and offerings

Diversified conglomerate ITC is looking to beat the economic slowdown with a slew of product launches and market strategy.

In the last quarter, ITC launched 25 products, which is half of what it had done the whole of 2018-19. This year, the product launches are likely to be at the same level. 

B Sumant, executive director of ITC, said the company continued to launch innovative and first-to-market offerings that could garner larger consumer franchise and drive category penetration. “This is part of our strategy to drive growth and scale in our fast-moving consumer goods (FMCG) businesses,” he said. There is a slowdown but there is also a room for consumption to expand in categories, which have lower levels of penetration, Sumant said.

“We are optimistic that the growth trajectory will pick up over time with the measures announced by the government.” He also pointed out that some categories, including premium products, had not been impacted by the slowdown. The FMCG sector is not only the last to get impacted but also the last to recover, as it deals with items of everyday consumption. The first to face the axe is discretionary spends like consumer durables and automobiles. But equally, when economy picks up, upgrading day-to-day consumption comes last.

ITC is driving growth with new products. But under the leadership of ITC’s new chairman, Sanjiv Puri, the focus for the company is to drive growth with profitability. 

There is also a renewed focus on leveraging synergies across businesses to drive competitive advantage. For instance, the agri business is marketing branded agri products like potatoes and apples under the Farmland brand.

The efforts are aimed at achieving the aspirational goal of being a leader in every segment of the business. The products launched in the last quarter addresses the emerging needs of consumers like health and wellness, Sumant said.

“Some of these unique products include Bingo! Starters made from pulses, Sunfeast Wonderz Milk dairy beverages with fruit inclusions, B Natural ‘not from concentrate juices’ in aseptic PET format, Aashirvaad Nature’s Super Foods Range ragi flour, multi-millet mix, gluten free flour, Enage On flip dual 2 frangrances in 1 pocket perfume, among many others,” he added. Besides product launches, ITC is fighting the slowdown with the introduction of low-unit price packs in multiple categories to make the products affordable to a much larger audience and induce trials. 

“We have also introduced bulk packs, especially on e-commerce platforms to drive demand. Our direct distribution reach and supply chain has been strengthened to ensure efficiency, availability and freshness of products,” said Sumant.

Some of the value packs have been created keeping the slowdown in mind, while the existing ones are being pushed aggressively. For instance, in biscuits, ITC has introduced a Mom’s Magic bulk pack and a 300-gm pack for Dark Fantasy Choco Fills. 

It’s not enough to make the products available, so communication has been sharpened to highlight the benefits to consumers in terms of lower prices or promotions. “We have participated in many of the promotional events in modern trade and e-commerce platforms and have seen significantly higher growth in these channels,” Sumant said.