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Business News/ Companies / We would like to make an entry into the beverages segment
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We would like to make an entry into the beverages segment

We would like to make an entry into the beverages segment

New ventures: Dar says the company plans to tap its e-Choupal network to build the new businesses. By Aniruddha Chowdhury/MintPremium

New ventures: Dar says the company plans to tap its e-Choupal network to build the new businesses. By Aniruddha Chowdhury/Mint

Mumbai: ITC Ltd, which started its packaged food business in 2001, may enter categories including coffee, water and dairy products. The foods division accounted for more than half of the 4,472 crore revenue that the company’s non-cigarette packaged consumer goods business reported in the year ended March 2011. In an interview, ITC Foods chief executive Chitranjan Dar said he will tap the company’s e-Choupal network, which procures and sells goods to farmers, to build the new businesses. Edited excerpts:

ITC’s other non-cigarette FMCG business hasn’t broken even yet. Has the foods business broken even?

New ventures: Dar says the company plans to tap its e-Choupal network to build the new businesses. By Aniruddha Chowdhury/Mint

Within the foods business, are there any gaps you’d like to fill in terms of new products and categories?

The foods business is at its infancy, we are not even 1% of the global market. So there are large gaps everywhere. Whether its nutrition or indulgence, it needs to be covered. More so in indulgence. The challenge is to do it in a manner that is affordable to the Indian consumer. We’re investigating categories all the time. We don’t want to be a pure-play food company anymore, so beverages is a space we’d like to enter. Wherever we have the advantage of our e-Choupal sourcing, we’ll get into it. Within beverages, we could look at water and coffee in the future because of our e-Choupal advantage. Some time back, we entered the dairy category as a corporate social responsibility (CSR) initiative to help the livestock chain. Now it’s at a stage where this dairy is used for internal purposes.

So will you enter the dairy category?

Right now it’s purely CSR. Once it reaches maturity, we will look at it as a category.

ITC was one of the first firms to bet big on the ready-to-eat category? But that category seems to be more about promise than delivery.

You’re right. The category is yet to pick up in India and there could be a lot of reasons why. In India, this entire business of people having a huge amount of convenience in terms of ordering has been a big deterrent. We see a greater potential in frozen food when infrastructure in stores grows. That’s the time this will take off.

In categories such as biscuits, premium brands seem to be driving growth?

Fundamentally, the mass segment comprises the glucose segment. Very frankly speaking, its importance to us has been falling. Three years back, it was contributing 45% to our biscuits revenue, today that’s down to 25%. In the mass segment, we compete in the popular cookie and cream segments. But with an increase in premiumization, the centre of gravity is shifting upwards.

How important are acquisitions in your strategy?

Acquisitions aren’t that sacrosanct to our growth. Over the years, we have developed some strong brands using our internal capabilities. We’ve already created two brands that have crossed the 1,000 crore mark. But having said that, we don’t rule it out. We’ve not been able to spot an acquisition opportunity yet.

byravee.i@livemint.com

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Published: 25 Jan 2012, 10:48 PM IST
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