Sanjiv Puri reshaping ITC for the new normal

NEW DELHI: From investing heavily in R&D to develop innovative notebooks for children to launching a slew of dairy products under the Aashirvaad brand, ITC chairman & MD, Sanjiv Puri is banking on brand extensions across the company’s entire portfolio to push profitability and maintain growth trajectory.After value addition, for instance, ITC’s noodles brand, Yippee grew over 50% during the lockdown, its Savlon portfolio grew five times that of last year and staples convenience foods and health & hygiene products, representing around 75% of the FMCG portfolio recorded a growth of 34% in the first quarter.“ITC launched 40 products during the lockdown and the momentum is set to continue,” said a senior industry executive, who did not wish to be quoted. “The idea is to quickly expand the portfolio of 25 mother brands by launching new products and consolidating the existing portfolio.”ITC extended the Aashirvaad brand to include ghee, pouch milk, paneer, pouch curd and lassi and launched them in select markets. The Savlon brand has now been extended to surface disinfectant spray, disinfectant and cleaner multi-purpose products, hand sanitizers, soaps and body wash and wipes.“The pace of innovations in the FMCG business has stepped up significantly. There were 60 new launches with clear value-additions in FY20 alone,” said Richard Liu, consumer analyst at JM Financial Institutional Securities.“FMCG apart, there is an enhanced focus on value-addition in some of the other segments as well and a few such examples are value-added paperboards in plastic substitution space and an extremely differentiated frozen foods range in the agribusiness segment,” he added.The company’s Farmland brand, which only had varieties of potatoes and apples, now includes a wide range of frozen vegetables, such as, corn, peas, mixed vegetables, tinda and pointed gourd. Its paper boards business has diversified to include substitutes for single-use plastics in the food service segment and a biodegradable series, launched as an alternative to plastic coated containers and cups.“The cigarette business has its challenges given the steep tax hikes. But the company has been opportunistic since the time Puri took over. The focus is back on FMCG, innovation and execution and given the pace of launches, the company is set to grow faster than the industry,” said H Nemkumar, head of institutional equities, IIFL Capital.ITC’s FMCG brands clocked an annual consumer spend of Rs 19,700 crore during the year, up from Rs 18,000 crore in 2019 and Rs 16,000 crore in 2018.

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