ITC FOOD PRODUCTS | Tobacco | Foods

Introduction

Ø Background of ITC Ø Product Diversification Ø Reasons to enter Food Industry Ø Ready to eat food products Ø Confectionery Ø Staples Ø E-Choupal Ø Biscuits Ø Challenges Ø Future prospects

BACKGROUND OF ITC LTD.
v ITC was established on August 24, 1910 as Imperial Tobacco Company of India Limited in Kolkata. v The name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. v In recognition of the Company's multi-business portfolio - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Foods, Lifestyle Retailing, Education etc. – on September 18, 2001. the Company is now named 'ITC Limited'. v Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation.

PRODUCT Diversification
v ITC's Packaging & Printing Business was set up in 1925. v In 1975 I.T.C. Ltd. tied up with the US based Sheraton Corporation through ITC-Welcomgroup to enter Hospitality industry. v ITC established ITC Bhadrachalam paperboards Ltd. {IBPL} in 1975. v Also in 1990 ITC set up the Agri Business Division for export of agri-commodities. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 . ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. v In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. the popular range of notebooks was launched under brand

PRODUCT DIVERSIFICATION

v In 2000, ITC entered the information technology business through a subsidiary, ITC Infotech India Limited. Today ITC Infotech is one of India’s fastest growing global IT and ITenabled services companies. v In 2002,Company launched clothing brand John Players. v in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. v In 2002, ITC entered the confectionery with brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. v In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets
popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.

PRODUCT DIVERSIFICATION
v v ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep. v ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme).

Reasons to enter food industry

vGovernment ban over cigarettes ads and anti tobacco campaign. vLiberalization of Indian Economy. vIncrease in per capital income. vUtilization of existing business infrastructure. v •

Ready to eat

v Kitchen of India brand launched in 2001. v Sub-brands Bukhara, Dum Pukht and Dakshin as premium brands. v Aashirvaadbrand extended in ready-meals as low price product. v In 2004 KOI brand lunched spice conserves and cooking pastes. v ITC won National Excellence Award in2004 for Ready To Eat products . v Hurdles- Lack of culinary skills and infrastructure.

v

confectionery

v In 2002 acquired Mint-O from Candico India Ltd and re-launched it. v In 2003 launched candyman a boiled sugar candy in different flavour. v Mint-O extended to Mint-o-Fresh in 2004-a mouth freshner as a impulse product. v In 2005 Cofitino was launched as product extracted from natural coffee beans. v ITC used its cigarette distribution network as a asset covering more than1.5 million retailers. v ITC has 8-9% market share of a market worth Rs19 billion

v

staples

v ITC launched Ashirvaadbrand for wheat flour in 2002. v Brand positioning of the brand was on ‘Health and Hygiene’ issue and on value for money. v Hurdles-The stock should be fresh but should not run out. v Supply chain made responsive using distributor response. v Freshness maintained by reducing transit time. v Cost advantage using electronic procurement called e-Choupal and its

CHOUPAL

w e a a te st th e r fo re c a fa rm i n g te c sts c ro p ques i su ra h n i Internet n nc m a rk kiosks e t p ri e ce s

Agricultural produce

sanchalaks

benefits
Strong supply chain management lower net cost of procurement

Biscuits
Ø In 2003, ITC entered in Biscuit industry with three varieties of biscuitsglucose, marie, and cream. Ø Target - Children in the age group 4-14 and their mothers. Ø Advertisements focused on product attributes. Ø ITC’s Strategy- To increase market share by launching new product. Products- Sunfeast Milky magic, Sunfeast strawberry Cream, Sunfeast Pineapple Cream & Sunfeast Coconut. Ø Shahrukh khan as the brand ambassador for sunfeast

Ø Launched an environmental awareness program-”Sunfeast Hara Banao Campaign” Ø Expanded its product line with the launch of Sunfeast Golden Bakes & Sunfeast Snacky Ø Main competitors are Parle-G and Britannia Ø “ We decided not to play on our competitors’ turf; our aim was to create new markets for ourselves.”said Hemant malik, Head of marketing, ITC foods. Ø In march 2006, ITC had decided

Challenges
Ø Competition from unorganized sector Ø Require huge amount of money Ø Low margin Ø Consumption was lower Compare to Developed countries. Ø Competition from Parle-G & Britannia in Biscuits business. Ø Increase in the production cost Ø Taxes & VAT {Value Added Tax}

Future plans
v Going forward, the roadmap include plans to integrate bulk storage, handling & transportation to improve logistics efficiency. v Establish ‘E-chaupal’ as a new age cooperative for all practical purposes. v ITC plans to extend its E-Chaupal initiative to 15 states across India over the next few years. v Planning to launch some other services with their E-Chaupal program like:  Micro-credit  Health  Education

v v

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