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ITC sees market potential of 5 trillion for its FMCG business

ITC chairman and managing director Sanjiv Puri said the company plans to expand the presence of its homegrown brands in markets outside India (Photo: Mint)Premium
ITC chairman and managing director Sanjiv Puri said the company plans to expand the presence of its homegrown brands in markets outside India (Photo: Mint)

Hotels to packaged goods company ITC LTd., said its range of FMCG spanning packaged flour, chips, biscuits and soaps has a substantial headroom to grow—with an estimated total addressable market potential of 5,00,000 crores by 2030

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NEW DELHI : Hotels to packaged goods company ITC Ltd., said its range of fast moving consumer goods spanning packaged flour, chips, biscuits and soaps has a substantial headroom to grow—with an estimated total addressable market potential of 5,00,000 crores by 2030.

In FY22, the company’s FMCG businesses (excluding cigarettes) recorded segment revenue of 15,994.49 crore up 8.6% over the previous year. The company sells packaged goods under brands such as Aashirvaad, Sunfeast, Bingo, Savlon, and Yippee among others.

“ITC is today the largest incubator of FMCG brands in India, anchoring competitive and inclusive value chains in wheat, potato, fruits and vegetables, dairy, aqua, forestry among others, that empower millions of farmers," ITC’s chairman and managing director Sanjiv Puri said addressing shareholders at the company’s 111th annual general meeting on Wednesday.

The carefully selected portfolio, with substantial headroom to grow, is estimated to have a total addressable market potential of 5,00,000 crores by 2030, which is amongst the highest in the Indian FMCG space, he said.

ITC competes with companies such as Hindustan Unilever Ltd., Nestle India, Britannia Industries Ltd., among others in India’s packaged consumer goods market.

In FY22, ITC launched 110 products. This includes extension of existing products into adjacent categories.

“It also reflects the ITC Next strategy to fortify and scale up our mega brands such as Aashirvaad, Sunfeast, Bingo! and Yippee!, leverage some of these power brands to address value-added adjacencies and invest in categories of the future. Today, Aashirvaad which is a strong centre-of-plate brand encompassing a range of staples has been extended to organic, frozen breads and vermicelli; Sunfeast beyond Biscuits to Cakes and Savlon to Surface Disinfectant Sprays and so on," Puri added.

Meanwhile, ITC has also made several acquisitions in the last two years including investments in direct-to-consumer brands.

Value-accretive acquisitions like Sunrise spices and investments in tech-enabled startups like Mother Sparsh and Mylo, in fast-evolving spaces like mother and childcare, will provide new vectors to accelerate growth, the company said. “We continue to incubate new engines of growth to create beachheads in areas that hold promise for the future," said Puri.

Meanwhile, Puri said the company plans to expand the presence of its homegrown brands in markets outside India.

“In recent years, we have established distribution arrangements abroad enabling appreciable progress of exports of ITC’s ‘Proudly Indian’ brands to over 60 countries. Over time, such exports will make a substantial contribution to the growth of your company’s value-added FMCG portfolio," Puri said.

Puri also flagged global risks that he said have been accentuated with geo-political tensions and severe economic stress caused by inflation and supply-side disruptions.

“The recessionary trends and debt crisis in certain geographies are also of concern for the global economy. Worsening food and energy security, together with the growing inequities world-wide, poses new threats to society. Amidst all this, the stark sustainability challenges continue unabated, with climate change becoming an existential threat, and livelihood generation a daunting task for nations across the world," he said.

However, Puri added that Government’s proactive policy measures has led the country to a path of recovery. “Notwithstanding the global headwinds, the promise of the India story is still intact and the economy is poised to remain one of the fastest growing in the world," he said.

While there are near-term challenges, ITC is optimistic about the prospects of the Indian economy, he said.

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