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ITC will serve healthier products as foods grow again
DNA - 24 Sep 2013

ITC,  the hotels-to-foods-to-cigarettes conglomerate, plans to tap several new  categories to grow its business. Chitranjan Dar, CEO of ITC’s foods division,  tells Nupur Anand the company is gearing up to give consumers healthier options  in various categories.

The  company is also implementing its vision to achieve a turnover of Rs. 1 lakh  crore by 2025-30 and emerge as the No.1 player in the FMCG (fast-moving  consumer goods) business. Excerpts:

ITC is believed to have had cracked the code in the FMCG  space faster than a lot of other players. What has been your strategy?

The idea has been to develop and give a better product to  our consumers and also to reach out to them effectively. Another key has been  backward integration that has helped us tremendously, especially in segments  such as branded staples like Aashirvaad.

In fact, we wouldn’t be anywhere without it. The scale at  which we are working on the flour business... it is an enormous e-Choupal  operation and we are riding on its back. The 6,500 e-Choupals and about 6,000  buying points have been a huge help in growing the division.

You have been focusing on premiumisation and reducing the  focus on the mass end in categories such as biscuits. Will you follow a similar  approach in other segments too?

In the biscuit category, we felt there was a lot of scope  for innovation. In this category, our strength was not on operating in  lower-margin products like everyone else was. In other categories also, we are  looking at premiumising, but it may not be as stark as biscuits.

Generally the idea is to premiumise; we a want to give  better offerings, things that consumers have not heard of. The idea is that we  want to give differentiated products to consumers, something that they hadn’t  even dreamt about.

Do you expect the growth in the food category to be  slower this year on account of slowdown?

In the first quarter, I was genuinely worried about it.  Now, even though we have lost 3-4 months this year because of the slowdown, I  am beginning to see a positive trend in the market.

So, overall, there was a blip; but the food category has  covered up for it. And now, we think we are on a good growth path.

Are you looking at healthier food options in your product  portfolio?

Yes. We will be getting into a whole host of healthy  range of products and this is very much on our cards. Across every category, we  will see that wherever there is an option to make products healthier, we will  go for it. If consumers are willing to engage with healthier variants, then we  will bring that in our portfolio.

Will you look at healthier options in snacks, like, say,  baked chips?

Yes, why  not? We will see.

There has been a lot of speculation about ITC’s next  forays. So, is it going to be coffee or some other category?

Yes, we will enter all these segments but over some time.

Currently, there is a lot of speculation but I can’t  comment on that now. It’s an ongoing exercise and we are evaluating several new  categories.

Several food players have hiked prices because of  volatile raw material prices and the fluctuating rupee. What are your plans?

We are looking at it and we think that the price rise is  more permanent and so, at some stage, we, too, will increase prices. It may not  be a month or two. But if the prices remain where they are, then, sooner or  later, we will have to hike prices.

How are you working your way through the rural market?

Our rural market share is still 40-45%; we are trying to  keep the growth rate same as that in urban markets. Because of premiumisation,  growth in urban markets tends to be faster at some level; but at the same time,  we plan to keep our rural drive alive.

This is because we believe that in the coming years, a  lot of growth is going to come from rural areas. As a result, we need to work  with it with all our might.

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