ITC: Packaged Food Business

Group – 05

20 - Shrikant Jangam51 - Raman Shinde61 - Tejashree Sawant62 - Vipul Bhandari

Timeline of ITC

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited

In 1974, the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited

In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Fast Moving Consumer Goods, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology

ITC's Packaging & Printing Business was set up in 1925

In 1975, the Company launched its Hotels business with Welcome group of Hotels

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited

In 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities

ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000

Foray into Food Business in 2001

ITC launched line of premium range of notebooks under brand Paperkraft in 2002

In 2002, ITC also entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour)

In 2003, ITC witnessed the introduction of Sunfeast as the Company entered the biscuits segment

ITC entered the fast growing branded snacks category with Bingo! in 2007

Business Portfolio: ITC

ITC

FMCG

Cigarettes Personal Care

Packaged Food

Products

Hotels Agri Business

Paperboard &

Packaging

ITC Food Business

ITC Food Business

KOI Aashirwad Sunfeast Minto Candyman Bingo

Tobacco Vs Non-Tobacco

2003-04 2004-05 2004-06 2006-070%

20%

40%

60%

80%

100%

120%

40% 42% 48% 52%

60% 58% 52% 48%

Non Tobacco Tobacco

Net

Turn

over

(%)

Share of Non-Tobacco portfolio crossed the 50 per cent of net turnover mark in 2006-07 (Food & Lifestyle)

Question & Answers

Why ITC entered packaged food sector Government’s legislation to ban smoking in Public places

Ban on sponsoring sporting and cultural events

Fall of stocks – ITC

Packaged branded foods constitute the major portion of consumption in developed markets

Indians spend about $130-$150 billion (INR 5,20,000 to INR 6,00,000 crore) on food annually – ITC’s Market Research

Support from its own divisions

ITC growth is based on synergising and blending multiple core competencies to create epicentre for growth

ITC tapped core competencies in tobacco, hospitality, Agri, IT sector to build and grow other business

Tobacco

- Used strong distribution network to deliver FMCG products- Blending skills used to create blends for Aashirvad atta- Mfg and process skills used for mfg FMCG products Agriculture business - Help to source raw material for mfg of biscuits- E-choupal help to distribute product in rural areas 

Hotels

- Provide consumer insights into tastes and habits of high end consumers

- Analysis of consumer taste by region help them to launch Regional variants of Bingo and aashirvad atta

 ITC Info tech

- Helps to create and maintain the IT backbone of E-choupal initiative , distribution network and design solution program

Corporate Diversification Strategy

ITC’s Corporate strategy aims at creating multiple drivers of growth using its

◦ wide distribution reach,

◦ superior brand building capabilities,

◦ effective supply chain management and

◦ acknowledged service skills in hoteliering

◦ quality packaging

BCG matrix for ITC group

StarsHotelsPaperboards/ PackagingAgri Business

Question Mark

FMCG - Others

Cash Cows

FMCG - Cigarettes

Dog

ITC-Infotech

Hig

h

Relative Market Share

Ind

ustr

y G

row

th R

ate

Low

High Low

SWOT Analysis of Packaged Food SectorStrength• Growth of organised retail• Improvement in packaging technology

• Urbanisation• Value for money• Convenient pricing • Focus on Traditional Indian foods• Better quality of Food• Intense competition

Weakness

• Low penetration in Rural market

• Infrastructure development

Opportunities

• New product introduction as per change/requirement of consumers

• Rising disposable income

Threat

• FDI by MNC’s

• Decrease in no. of Farmers practicing agriculture

Most Innovative Brand

They have innovated the way product represent in the market. E.g Ashirvad aata got award in packaging

Giving variant in the food e.g. Sunfeast Dark fantasy, Sunfeast delishus

Leverage on each core competency and get the best out of it

Thank You