ITC Launches 70 Products in Non-Cigarette FMCG Space, Breaks Previous Record

A diverse conglomerate, ITC has launched up to 70 products in the Fast-Turning Consumer Goods (FMCG) space other than cigarettes, taking advantage of the changing dynamics of the consumer space affected by the pandemic, beating its previous record of 60 launches.

All 70 launches were made in the first half of the fiscal year alone and focused primarily on hygiene, health and wellness, natural products and convenience, which were in high demand as Covid -19 was doing rage across the world. The number of launches exceeds what the ITC had done over the whole of the last fiscal year; in 2019-2020, ITC carried out 60 launches, while in the previous year the number rose to 50.

In order to take advantage of the continued pull of hygiene products, ITC has launched a line of products under the Savlon brand – disinfectant sprays, disinfectant tissue sprays, spray and wipes, anti-germ wipes, Hexa disinfectant and advanced body washes. – some of which were made during confinement.

The brand is now on track to record an annual consumer expenditure of Rs 1,000 crore in FY21.

Some of the other launches that captured the evolution of consumer behavior were: ready-to-cook chapattis (Aashirvaad), selected milk with a daily newsletter (Aashirvaad), immunity juices (B-Natural), frozen vegetables (Farmland), among others.

In the quarter ended September, the non-cigarette FMCG segment got a head start with the highest quarterly revenues at Rs 3,794.95 crore for all segments except education business and stationery.

The company attributed it to the deployment of innovative delivery models, the use of alternative channels, the expansion of reach, the agility of execution and the use of digital technologies to meet the demands of the business. Marlet.

The segment’s pre-tax profit was Rs 252.68 crore compared to Rs 90.46 crore in the previous year period; in the previous quarter, profits were Rs 125.41 crore.

While consumers have switched to contactless transactions, sales through e-commerce platforms more than doubled in the past quarter, reaching almost 5% of segment revenue. However, sales in modern shopping channels grew at a slower pace as localized closures impacted footfall and consumers preferred neighborhood / online stores as safer options.

A report from Edelweiss said ITC’s FMCG business has shown good operating profitability since fiscal 2019 and the trend is expected to improve going forward.

However, while FMCG non-cigarettes received a boost, cigarette business was hit in the quarter due to localized blockages, which reduced overall performance.

Net sales were down 14.4% year-on-year; sequentially, however, it increased by 33 percent.

A report from Motilal Oswal said cigarette volumes would likely have declined by 12%, which was less than the expected drop of 7%. The cigarettes business net EBIT margin contracted 880 basis points year-on-year to 63.4%, he said.

In addition to the closures, high taxes on cigarettes were also a surplus. The company said the 13% tax hike that took effect on February 20 has added pressure on the legal industry. Additionally, ESG concerns persist over cigarettes as cigarette companies globally are being shut out by ESG investors.

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