ITC's new FMCG game plan

ITC's new FMCG game plan
Tuesday, 21 August , 2007, 11:55

ITC, the largest fast-moving consumer goods (FMCG) company in terms of distribution reach, is gearing up for the launch of a mass brand in the home and personal care space. The company has already set up a separate strategic business unit (SBU) for this purpose.

Sources said a manufacturing facility has also been established in Uttarakhand for making soaps and shampoos.

ITC's foray into personal care happened in 2005 with the launch of "Essenza Di Wills", the premium brand of bath and body care products. These products are currently retailed through the ITC-owned Wills Lifestyle stores. But analysts said since the brand is very premium, Essenza's contribution to the company's topline is negligible. Analysts quoted competitor sources to aver that ITC has decided to call the new home and personal care brand "Superia".

However, this could not be confirmed. An ITC spokesperson told DNA Money:  "What has been decided as of now is to create an SBU to enhance focus on the home and personal care segments. No decision has been taken on whether we will launch a mass brand for this category."

However, in ITC's latest annual report, chairman Y C Deveshwar had said the company was seeking to  "aggressively scale up the FMCG initiatives and expand the portfolio, including entry into home and personal care market".

And this would be achieved through significant brand building, further enhancement of supply chain and sales and distribution capabilities, he said.

The famous  "e-choupal" rural distribution initiative is expected to also be a major contributor towards making the home and personal care foray a success. Analysts said given its immense distribution strength, ITC shouldn't find it hard to make a successful entry into the Rs 8,000 crore home and personal care segment. However, a tough competitive environment
could make things a tad difficult.

With the upcoming launches, ITC would be pitted against such FMCG behemoths as Hindustan Unilever Ltd and Procter & Gamble, besides Godrej Consumer Care and Dabur India.

Apart from the tobacco business, ITC already has a large FMCG presence. Its non-tobacco FMCG product kitty contributed Rs 1,704 crore to the topline last fiscal. It includes branded packaged foods (Aashirvaad staples and Sunfeast biscuit/pasta); lifestyle retailing (Wills, John Players); greeting, gifting and stationery; and the safety matches and incense sticks business