Co Keen To Enhance Capacities By 20% To Manage Supply Chain Costs & Improve Profitability
THOUGH ITC is nearly synonymous with tobacco, it
has in no way stopped people from munching ITC’s
biscuits. Small wonder, the company has managed
to corner nearly 11% of the national biscuits
market.
Since the Rs 9,000-crore biscuits market
witnessed a growth of 20% last year and is
slated to sustain its growth this fiscal, ITC is
looking at enhancing its biscuits manufacturing
capacities by at least 15-20% primarily to
manage supply chain costs and improve
profitability.
“We
plan to set up additional capacities in such
areas where we have developed a significant
front-end scale but are limited by proximate
capacities. Attempts are being made to create
new biscuit variants in segments that are
relevant to the consumer. The positioning of the
marketing mix is also being worked upon to drive
consumption by creating convenient price points
or by differentiating product propositions,” Mr
Chitranjan Dar, chief operating officer, ITC
Foods Division, told ET.
For
starters, ITC plans to drive growth by
vitalising its brand ‘Sunfeast’ through product
innovation, contemporary packaging and targeted
brand communication. A huge investment is also
being planned for brand building and product
development. At the same time, the company is
looking at investments in building trade loyalty
across channels and markets.
Elaborating further, Mr Dar said: “While ITC per
se has no plans to rationalise its biscuits
portfolio, we review the basket from time to
time. Additions or deletions take place on the
basis of the market feedback and actual sales.
The idea is to strengthen the winners and
replace the average performers with potential
winners from the biscuits stable. As of now,
there is no product which does not contribute
positively to the overall pool of
contributions.”
Incidentally, a large proportion of the growth
in the biscuits segment is coming from the
mid-price offers growing at 35%. The mid-price
offers is the non-glucose segment and includes
cookies and sandwich cream products.
“There are clear indications that consumers are
upgrading to mid-price offers in line with the
growth of packaged foods in the country. Since
consumers are ready to pay for good quality and
tasty products, we find a growing value for
product quality and hygiene. Hence, our capacity
additions will partly be in line with these
requirements,” the COO pointed out.
The
basic product glucose, however, continues to be
largest category in terms of volumes.
