Pummy Kaul

New Delhi

After scrambling to get a handful of staple foods, confectionery and ready-to-serve (RTS) foods, the diversified tobacco major ITC Ltd is now munching on a crunchy snack foods and savoury market.

With a new brand on its plate called ‘I’ harping on the happening ‘nutritious’ positioning, the Rs 8,000 crore cigarettes-to-hotels conglomerate hopes to give the unbranded and a clutch of organised snack food players- both homegrown and multinational- a spirited fight.

A highly fragmented market, according to available industry data, the overall snack foods market is estimated at 2.9 lakh tonnes or Rs 3,000 crore. Over three-fourths of this market comprises unbranded or made-at-home snack foods. While this sector has been flat over the past few years, the branded market is estimated to be growing at 15 per cent annually.

Naturally, opportunity for branded players is screaming from the rooftops. "It makes good sense for us to enter the snack foods market which is currently growing at 10-15 per cent per annum. It’s a large enough market to make more than one or two branded players," ITC Ltd executive vice-president Ravi Naware told The Financial Express.

The company through its foods business is entering the Rs 3,000- crore snack foods market with a unique snack called ‘bischips’ under a new brand ‘I’. The product is currently being seeded in the Capital and will be taken to other metros and big cities in a couple of months. Launched in three flavours- tomato twist, creamy onion and cha cha chat, the pillow packs in two sizes are priced at Rs 10 and Rs 5, respectively.

But just how will it take on the dominant player in the category Frito-Lay India, PepsiCo’s snack foods arm, which has almost brought in a snack-chip revolution in the country? Or for that matter, homegrown Haldiram and the Delhi-based snack-food-retailer Bikanervala Foods Pvt Ltd. Even dairy major Mother Dairy has a presence in the category.

The company plans to spearhead growth for its brand by targeting teenagers and riding on the happening ‘nutritious’ plank. In other words, it will take the ‘fried vs baked’ route to build awareness and promote its brand. "Our product is baked not fried, has less oil and is wheat based," says Mr. Naware.

A teaser print ad campaign created by ad agency FCB-Ulka is currently on, which will lead to the launch ad shortly. The brand will also go on air in January 2003.

The products are currently being outsourced from a unit based in West Bengal called Boss Foods Ltd. In-house manufacturing will be considered only once volumes build up.

In foods, ITC is present in three categories: staple foods (under brand Aashirvaad); confectionery (Minto and Candyman); and RTS (Kitchens of India).