ITC's FMCG revenues records a robust 11.3% growth
ITC's FMCG segment revenues recorded a robust growth of 11.3% during the year, crossing the Rs. 9000 crores mark. This was achieved in the backdrop of sluggish demand conditions and intense competitive activity with industry players stepping up consumer and trade offers with a view to garnering volumes, offsetting the benefit accruing from benign inflation in input costs. Segment Results for the year stood at Rs. 34 crores after absorbing the start-up costs of two new categories viz., Juices and Gums, scale-up costs of Deodorants launched in 2013, besides a host of new launches in existing categories.
Branded Packaged Foods Businesses
Demand conditions in the Branded Packaged Foods industry remained subdued for the second year in succession with consumers seeking value-for-money offers and curbing discretionary spending. Against the backdrop of a challenging operating environment, the Company sustained its position as one of the fastest growing branded packaged foods businesses in the country leveraging a robust portfolio of brands, differentiated range of products customised to regional tastes and preferences along with enhanced product visibility and availability in key markets.
In the Bakery and Confectionery Foods Business, the Company increased the scale of its operations and improved its market standing. The Sunfeast range of biscuits was augmented during the year with the launch of 'Mom's Magic' in the premium cookies space in two variants - 'Rich Butter' and 'Cashew & Almond'. In addition to the several product development and brand enhancement initiatives undertaken during the year, the Business migrated the popular range of cream biscuits under a new sub-brand - 'Bounce' - which emerged as the largest cream brand in the industry and helped sustain the Company's leadership position in the overall creams segment. The Business also forayed into the Cakes segment with the launch of 'Yumfills Whoopie Pie' - a premium chocolate-enrobed cake - which has seen good traction.
In the Confectionery category, the Business continued to leverage the 'Candyman' and 'mint-o' brands and focused on premiumising its product portfolio by enhancing the share of variants priced at 'Re. 1 & above' in the sales mix. The year also marked the Company's foray into the Gums segment with the launch of 'GumOn' brand, which has garnered impressive consumer franchise in launch markets. The product is being rolled out to target markets.
In the Snack Foods Business, the Company recorded impressive gains in market standing in the Savoury Snacks and Noodles & Pasta categories. In the Noodles category, 'Sunfeast YiPPee!' clocked a healthy revenue growth far exceeding the industry growth rate. During the year, Sunfeast YiPPee! entered the league of Top 100 FMCG brands in India - a reflection of its growing stature in the fast growing Noodles category. 'Sunfeast YiPPee! Tricolor Pasta', a differentiated premium offering launched last year, continued to grow at a fast pace and gain consumer franchise.
In the Savoury Snacks category, the Business registered significant growth in its Bingo! range of finger snacks driven by the 'Mad Angles' and 'Tedhe Medhe' sub-brands through sustained expansion of distribution, activation of passive channels in the North and East markets and measured brand investments. In the potato chips portfolio, 'Bingo! Yumitos' also grew at a robust pace on the strength of region-specific interventions.
The Staples, Spices and Ready to Eat Foods Business posted a robust performance during the year, growing well ahead of the industry. In the Staples category, 'Aashirvaad' atta consolidated its leadership position in the industry and grew at a rapid pace driven by the value-added portfolio comprising the 'Multigrain', 'Select' and 'Superior MP' variants. The Business also augmented its product range during the year with the launch of 'Aashirvaad Atta with Methi' in the value-added segment.
The Company forayed into the fast-growing Juices category during the year with the launch of 7 exciting variants under the 'B Natural' brand in January 2015. These highly innovative and differentiated products, including the unique offering 'Jamun Joy', have received promising consumer response. The Company seeks to leverage its agri-sourcing expertise and deep distribution reach and rapidly scale up the B Natural brand in the years ahead.
Personal Care Products
The Personal Care Products Business posted robust growth in revenue during the year driven by increasing consumer franchise for its products and a series of new launches and range extensions. During the year, the Business rolled out several differentiated product offerings in the Deodorants, Soaps, Shower Gel and Skin Care categories under the 'Engage', 'Fiama Di Wills', 'Vivel', and 'Superia' brands, and improved in-store brand salience of offerings under the 'Essenza Di Wills' brand.
In February 2015, the Company acquired the 'Savlon' and 'Shower to Shower' trademarks and other intellectual property rights for identified markets from the Johnson & Johnson group. The Company intends to leverage these assets to strengthen its position in the personal care space by expanding its existing product portfolio and gaining access to newer consumer segments and markets.
In the fast-growing Deodorants category, Engage has emerged as the No.2 player in the country within a relatively short span of 2 years since launch. The year also saw the launch of '0% gas' variants of 'Engage Cologne Sprays' thereby providing consumers a wider repertoire of choice. These interventions have been well received by consumers strengthening the Company's presence in the Personal Care industry.