ITC mentioned in a statement that it is planning to expand its fast-moving consumer goods (FMCG) business in double digits by quickening the pace of product launches, building integrated hubs for output, with deep penetration to the distribution sector in the rural hinterland, and as well as stocking and delivering those items such as cookies, packaged flour and soaps.
The company has launched more than 60 new products in FY19 and wants to continue this pace of product introductions next fiscal as well to drive business growth and expand distribution reach to population centres of up to 5,000 people.
B Sumant, ITC’s executive director said, “The company has already operationalised five ICMLs. These hubs make FMCG products, such as packaged foods and personal-care items, and have warehousing and outbound logistics integrated with the respective output facilities.”
In a statement ITC also said that the company is in the process of setting up 20 ICMLs across the country as part of its planned investment of Rs 25,000 crore over the next couple of years.
Sumant also added, “The ICMLs will ensure cost efficiencies and freshness of products as they will be closer to end-consumers. We also want to drive distribution in rural (areas), considering there is growth in those markets – both (by way of) same store sales and new store additions.”
As per the data ITC’s FMCG sales expanded 20 percent in rural markets, compared with 16 percent for the broader industry. In the nine months ending December, ITC had added 2.3 lakh outlets taking its reach to 61 lakh. Out of this, ITC directly reaches to more than 20 lakh outlets.
ITC recently ventured into low-unit price packs for premium products, such as ITC has launched Rs 10 pack for Dark Fantasy Choco Fills cookies, compared with Rs 30 before.
While speaking on the different segments, Sumant said about the dairy business, that ITC would seek to scale up the geographic and distribution reach of the products it has already launched. It has introduced milk, ghee, curd, and paneer in Bihar and West Bengal, and milk shakes in the South.
The company is the local market leader in branded flour, premium cream biscuit, bridges snack, notebooks and safety matches, while it is the second largest in instant noodles, shower gels, deodorants and incense fragrances.