ITC launches ‘low smell’ cigarettes
New Delhi: India’s largest cigarette maker ITC Ltd has launched a cigarette that smells less, as it seeks to lift declining sales through product innovation.
The Kolkata-based company has started rolling out a new variant of its best-selling brand Classic with the tag Low Smell attached to it. The latest variant of Classic comes in blue packs and is made of “impeccable blue leaf tobacco” which is considered to be of high quality and has special “tasteflo” filters, according to a claim printed on the packets.
ITC has priced a pack of 20 84-mm sticks at Rs.218. This is much lower than other variants of Classic that are priced at Rs.246 a pack.
An ITC spokesperson declined to comment on the new launch.
“It’s a good marketing strategy. Smell has always been a concern, especially for the first-time cigarette smokers and women, considering our social structure. The look and feel is impressive. But we’ll have to see if regular smokers like its taste or not. Unless they like it, it may not gain volume,” said Abneesh Roy, analyst with Edelweiss Securities.
Given that cigarette companies cannot advertize, they can only bank on innovations to boost sales, Roy said. “The company is pushing the product. Retail shelves and display boards are packed with this product. This could add some volume,” he added.
Interestingly, this is the only new product ITC has launched after the excise duty hike in the Union budget on 29 February. The Union budget had proposed an increase in excise duty on tobacco products, excluding bidis, by 10-15%.
Last month, the company increased prices of Classic and Gold Flake Kings—its large selling brands—by 12.84% to Rs.246 for a packet of 20 sticks from Rs.218 earlier.
ITC has already witnessed 11 consecutive quarters of falling cigarette sales by volume, according to a report by Edelweiss Securities, published on 29 February, primarily because of stiff increase in taxes on cigarettes during the past year.
ITC’s cigarette sales by volume fell 17% in the first quarter of the current fiscal from a year earlier, 16% in the second quarter and 4% in the third, according to the Edelweiss report. Cigarette volumes are projected to fall further in the coming quarters, the report added.