ITC eyes top spot with aggressive expansion

Plans to get there through brand-building, enhancing supply chain.

ITC is planning to aggressively scale up its FMCG business and expand its product portfolio in an attempt to be the leading FMCG player in the country.

According to company executives, this would be achieved through a combination of synergistic investments in brand-building and enhancement of the supply chain and sales and distribution capabilities.

The new FMCG businesses of ITC grew by 68 per cent in 2007.

ITC is planning to launch nearly 14 new variants of its existing packaged food brands including Bingo, Sunfeast, Aashirvad and Kitchens of India.

Ravi Naware, CEO of ITC's foods business, said, "We are constantly developing new products as upgradation is imperative in any FMCG business. We will introduce about 14 variants in our existing brands. The new products will build on the health platform, easy preparation and convenient foods."

In 2007, ITC's branded packaged foods business recorded a sales growth of 51 per cent over the previous year. The company made a foray into the organised salty snacks market with the launch of Bingo range of potato chips and finger snacks. Its range of offerings thus exceeded 150 distinct food products under six brands

Bingo currently has 16 variants, while Sunfeast has 18 variants.

ITC also intends to introduce a complete range of personal care products in an attempt to widen its product portfolio and strengthen its position in the Rs 2,700 crore skincare market.

According to Sandeep Kaul, CEO of the personal care business of ITC, "Although we offer premium products in terms of benefits and price points, we have noticed good sales for our personal care products within a few months of launch. We would soon announce the annual sales figures."

ITC launched 'Vivel Di Wills' and 'Vivel' range of soaps in February 2008. In September last year, the company had launched three variants of Fiama Di Wills, a premium range of shampoos, following the success of Essenza Di Wills, its exclusive range of fine fragrances and super premium personal care products.

At the same time, the greetings, gifts and stationery business (GGSB) division of ITC is set to significantly expand its product portfolio by diversifying into writing instruments and offering customised solutions to the corporate houses.

The stationery business contributes about Rs 180 crore to the company's revenues and according to a company executive, "We are aiming to achieve Rs 1,000 crore revenue from this business arm within three years."

ITC's stationery business is growing by over 100 per cent per annum and with the addition of new products, including office and letter writing instruments, these targets are within reach, the executive claimed.

The Classmate brand alone contributes about Rs 150 crore.

Data estimates the market for school and education sector at Rs 5,000 crore. Large global chains such as Staples and OfficeOne have already made an entry and this market is poised for further segmentation.

Simultaneously, Wills Lifestyle, the garment retailing arm of ITC, is aiming at a growth of 30 per cent, and has embarked on a major rejuvenation and brand makeover plan through a series of new-look stores, launch of premium product-lines, and tie-ups with leading architecture and management companies for superior product presentation inside stores.

The aim is to offer innovation in sync with changing consumer preferences as well as make a lifestyle statement and build the brand around a more desirable look and shopping experience.

The revamp is expected to help the company grow by 30 per cent. During 2007, ITC's lifestyle retailing arm grew by 52 per cent in both the premium and popular segments.

According to Atul Chand, vice-president - marketing and retail of ITC, "We will revamp our existing 50 stores and give them a new look in terms of design and architecture.

The pilot project has been carried out at two stores in Mumbai and one in Delhi. This will be extended to all the existing stores."

The company plans to take its total number of stores to 100 in one year from the current 50. It is also looking at setting up Wills Lifestyle stores in tier-II cities including Siliguri and Raipur.

The new stores would reflect the ongoing brand makeover exercise.