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Jun, 07 2018

ITC's top eight FMCG brands cross the $2-billion milestone

The company last year commissioned two world-class integrated consumer goods manufacturing and logistics units in West Bengal and Punjab.

The collective sales of ITC’s FMCG brands crossed the $2-billion (Rs 13,000 crore) milestone in the fiscal ending March 2018, with three packaged food brands Sunfeast biscuits, Bingo chips and snacks and Aashirvaad atta contributing in the surge.
 
An investors presentation from the company showed that the annual consumer spend on ITC’s FMCG brands rose to more than Rs 16,000 crore in FY18 compared to Rs 14,000 crore in previous year. The eight brands contributed over 80% to the total FMCG sales.
 
The presentation showed that Aashirvaad atta crossed Rs 4,000 crore sales last fiscal followed by Sunfeast biscuits at Rs 3,500 crore and Bingo chips and snacks at Rs 2,000 crore. Each of the brands rakes in Rs 500 crore worth of sales to last year numbers.
 
While Aashirvaad’s growth was triggered by launch of multiple variants in atta and entry into ghee and spices, Bingo had gained in the bridge snacks segment with products like Tedhe Medhe and Mad Angles competing with PepsiCo’s Kurkure. Next in line were the Classmate stationary and Sunfeast Yippee noodles brands; each clocked more than Rs 1,000 crore in sales. Three brands — Vivel soap, Candyman confectionery and Mangaldeep agarbatti —clocked over Rs 500 crore sales each last fiscal.
 
ITC’s packaged food business is continuing to drive its FMCG growth with personal care brands yet to break into the Rs 1,000-crore plus trajectory. This might slow the pace of growth for the company as the cash-cow packaged food brands have already gained scale with high base. “ITC needs to create new growth drivers, be it in personal care or an entry into home care,” the chief of a leading grocery retail chain said.
 
The most of the major FMCG categories enhanced their market standing during the year. “While Bingo, Aashirvaad atta and Dark Fantasy Choco Fills premium cream biscuits were the key drivers of growth in the branded packaged foods businesses, Engage deodorants, Vivel and Fiama soaps & shower gels and Savlon handwash fuelled strong growth in personal care business,” a spokesperson for ITC said replying to an email.
 
ITC is the market leader in packaged flour, premium cream biscuits and notebooks and the second-largest player in snacks, instant noodles and deodorant. The Kolkata-based conglomerate is betting big on FMCG as the future growth driver to de-risk the cigarette business straining under regulatory pressure with taxes almost trebling in the last six years.
 
The packaged food business is predicted to be a major generator for ITC’s goal to achieve Rs 1 lakh crore sales from the FMCG businesses by 2030, accounting for 60-65% of the total pie.
 
While the packaged food business is profitable, the other FMCG businesses are yet to ring in cash. The company last year commissioned two world-class integrated consumer goods manufacturing and logistics units in West Bengal and Punjab. It is also constructing more of such facilities to secure capacity and rapidly scale up the FMCG business, the ITC spokesperson said.
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