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Making the fragrance stick
The Hindu Business Line - 05 Jun 2003

ITC hopes to make the fragrance of its new ventures
into agarbattis widespread

Sravanthi Challapalli

FRAGRANCE-PROOF agarbattis? Now that’s a curious turn of phrase. But that’s what ITC’s promising with its brands Spriha, Nivedan and Ashageet, launched about three months ago, and what’s more, that is supposed to be one of its strengths.

ITC, which has been diversifying into several FMCG segments, including clothes and food, launched three agarbatti brands in February. Scenting an opportunity in this business, it began preparing ground at the end of 2002. Sourced from Sri Aurobindo Ashram’s Cottage Industries, Pondicherry, and small-scale units in Bangalore and elsewhere, these brands have made a beginning in Tamil Nadu and Maharashtra. Though there is not much syndicated information on this market, it is estimated at Rs 1,000 crore, with the big names being Cycle and Ambica. Another characteristic of this sector is that businesses are mostly family-owned and regional in nature. While Bangalore and Mysore were once the hub of this industry, given their proximity to areas in which bamboo grew, now they are manufactured almost everywhere, its manufacture being reserved for cottage industries.

ITC’s foray into the agarbatti business seeks to take advantage of its various in-house capabilities, including its marketing muscle and packaging power. So much so that a meeting with V M Rajasekharan, CEO, SBU-Agarbatti business, ITC, is full of references to how the company wants to drive home the point in its marketing that its agarbattis are packed so well that it’s impossible to get a hint of what the scent might be like once they are lit. But most customers sniff before they choose, so wouldn’t that be a weakness rather than a strength? "That’s true, but our consumer trials did not throw up anything like that, so we are confident it’s a value addition. Moreover, even though it’s not, the consumers thought it was a vacuum-sealed pack," he says.

The life of these packs is about six-seven months, longer than that of the other brands now available in the market. Moreover, its not as if consumers buy their packs blindly, says Rajasekharan, adding that trials are offered at the point of sale.

Spriha, ITC’s premium brand, is priced at Rs 20 for 20 sticks in Sambrani and Nagchampa fragrances. They are manufactured in the traditional ‘masala’ method, using natural ingredients such as charcoal, jigat and extracts from flowers. Nivedan (in Sandal and Bouquet, Rs 10 for 20 sticks) and Ashageet (Rose and Jasmine, Rs 7.50 for 20 sticks and Rs 4 for 10 sticks) are positioned as puja accessories, while Spriha, which, according to Rajasekharan, means aspiration, will be positioned as something that imparts tranquility. He says that the prices of Nivedan and Ashageet are comparable with those of the good quality brands in the market. Spriha, he points out, has the quotes of Aurobindo Ashram’s Mother on its pack. The POS and print campaign has started but the TV campaign will take shape once a certain level of distributing is reached, says Rajasekharan. O&M is the ad agency handling the advertising.

The company also sponsored the birthday celebrations of The Art of Living guru Pandit Ravi Shankar and it looks forward to forging strong associations for such events, he says.

Nagchampa is a rarity in incense sticks while bouquet is in vogue now, says Rajasekharan. Sandal, rose and jasmine are liked everywhere and all-time favourites. Sambrani has not been available in agarbatti form till now, he claims. Spriha is sourced from the Ashram in Pondicherry. The products had been in the market for many years but were not known, says Rajasekharan, adding that the tie-up with them was a win-win proposition for both. The manufacturers continue to make products under other brand names but fragrances of those made for ITC are propriety to the company.

Rajasekharan mentions ambience-creation and aromatherapy in the course of his conversation about fragrances’ functions. Ask him if he’s experimenting with Western scents in agarbatti form, and he doesn’t rule it out.

Says an analyst of ITC’s agarbatti venture. "This agarbatti venture is a long-term story. They are trying to exploit their marketing prowess and their investments are probably minimal. Succeed or fail, there may not be much impact on the company which has more than Rs 1,000 crore in cash flow. If they grab 30 per cent of the market, it could contribute 5-10 per cent of the profits but this may take 5-10 years. It all depends on how much they can take away from the unorganised segment."

ITC states that its mission is to turn the art of manufacturing agarbattis into a science. Consumer research through IMRB gave it an idea of the criteria it needed to fulfil in this endeavor, users were disappointed with sticks which burnt out easily, or where the compound fell of the sticks, or with their size, which was not uniform and fragrance, which was not what the pack promised. Rajasekharan pulls out a sample of an agarbatti brand claiming to be a khus fragrance, which doesn’t smell a bit like khus. He also lights an agarbatti in a stylish wooden holder, and says ITC could even look at accessories like that. Apart from a shelf full of brands, there’s one full of competitors’ brands for, says Rajasekharan. "It’s good to keep the competition in view all the time."