The instant noodles controversy impacted FMCG major ITC Ltd and the market as a whole. But, if Sanjiv Puri, the company’s Executive Director, is to be believed, then the Kolkata-based company has been the “fastest to recover” and exceed its earlier sales levels. In an interview to BusinessLine , Puri elaborates on how ITC came through the controversy, its strategy in the non-cigarette FMCG segment and how it intends to overcome the slump in the sector. Excerpts:
How has Yippee fared post the instant noodles controversy?
Sunfeast Yippee is in its fifth year post the national rollout. Yippee was growing at more than 40 per cent before the crisis. Consequently the confusion that prevailed adversely impacted the whole industry. We took it on ourselves to reinstate consumer trust in this category through a reassurance campaign. The campaign was shot with real employees in our laboratories and our manufacturing facilities informing consumers about our product quality and safety standards.
Our quality norms are very stringent and extensive tests are conducted for the company’s food products at ITC’s NABL accredited Life Sciences & Technology Centre as well as at external laboratories which are FSSAI and NABL accredited.
So is it safe to say that you gained market share after the controversy?
The industry is recovering now. We are encouraged by the progress that the industry is making. We were the fastest to recover and then exceed our earlier sales levels. We were gaining market share month-on-month even before the crisis.
Can you elaborate on your strategy in the FMCG segment?
Within a short period of time we are either leaders or no. 2 / no. 3 in all our key categories.
For example: Aashirvaad is a market leader in the branded atta segment; Classmate in education and stationery products; and Sunfeast a market leader in the cream biscuits segment.
Yippee and Bingo are no. 2 brands in their categories. Engage became the no. 2 brand in the deo segment in a very short span of time. ITC has already garnered consumer spends of ₹11,000 crore – 12,000 crore in the new FMCG businesses. We have created world class brands that create and capture value in India.
We will continue to expand our portfolio in existing categories as well as foray into new ones to drive growth; provide the consumer superior, first time to market products or differentiated offerings.
We are also investing heavily in game changing R&D through the ITC Life Sciences and Technology Centre which has filed over 400 patent applications.
What are the new categories that you are looking at?
We have already launched the Aashirvaad Svasti ghee in the South. We will foray into newer ones, as and when we are ready.
Within packaged foods there are many areas where we are still not present. There is a big opportunity in that space and our innovation engine is working 24x7 to create world class products. Some will be brought to the market within this quarter itself.
But, the demand for FMCG segment has however been muted. How do you see your strategy working in this regard?
We remain optimistic about the potential of the FMCG sector.
The Government’s thrust on Make in India, rural thrust and other initiatives should provide a fillip to consumption.
Whilst growth has been muted in the recent past, we remain optimistic and hence continue to invest with 65 projects across businesses.
What sort of investments are you planning?
The investment outlay across the 65 businesses is to the tune of ₹25,000 crore. We are setting up 12 food manufacturing facilities in various parts of the country. The company is also enlarging its contribution across all 3 sectors of the economy — agriculture, manufacturing and services.
Is ‘foods’ the largest contributor to the non-cigarette FMCG business?
Foods crossed $1 billion last year (FY-15) in turnover. We are working towards a ₹100,000 crore of FMCG (turnover) by 2030. Food processing will be one of the major growth drivers.
Apart from food, which are the other areas that you will explore?
We will be strengthening our portfolio in categories across businesses like personal care products, education and stationery products including exploring new categories within FMCG.