| Smoke & Mirrors
New Delhi, Dec. 28: Cigarettes-to-hotel major ITC Ltd, which is in the process of re-inventing itself as an FMCG and retail major, has opened negotiations with some leading FMCG companies for brand acquisitions.
Although officials are tight-lipped about who they are talking to, it appears that ITC is interested in packaged foods, ice-creams and confectionery products. A senior ITC official said the brand acquisitions or possible acquisitions of FMCG companies is in tune with the ITC plan to leverage its brand name to re-invent itself.
As part of the makeover, it plans to convert the current Wills Sports stores across various cities into multi-branding outlets of ITC, which will stock all ITC products, including its food products, branded apparel, greeting cards, paper products agarbattis and match boxes and, yes, cigarettes too.
ITC, which had launched its food division with both up-market and mass-market packaged food products, has also drawn up advanced plans to enter the milk and soya-based products with a strong possible foray into the ice cream market as well.
New food and FMCG products are part of the same plan. Matchboxes and agarbattis (incense sticks) are some of the new products which ITC has launched lately.
A few years back, when ITC had drawn up the roadmap for its brand and identity re-structuring, food and branded apparel were the two areas that it had zeroed in to achieve future growth.
However, ITC is not in a hurry to abandon its cigarette brands in a hurry. “Real growth in percentange terms will be from the garment (branded apparel) sector, although cigarettes will continue to be main revenue earner,” the official said.
ITC has already set up a designing studio in Gurgaon, and is working with some leading national and international designers for its fashion apparel brand Wills Lifestyle. A new brand or brand extension for apparel is also being considered.
In the foods business, ITC made its foray with its packaged gourmet food under the brand Kitchens of India. Later, it launched its mass market ready-to-eat food products. ITC Foods had also bought the Mint brand from Candico and has also come out with its branded atta and rolling out suji and maida.
ITC has a market capitalisation of around Rs 20,700 crore and a turnover of 11,040 crore. It has a diversified presence in cigarettes, hotels, paperboards & speciality papers, packaging, agri-business, greeting cards and other FMCG products, apart from branded apparel, packaged foods & confectionery.
While ITC is a market leader in cigarettes, hotels, paperboards, packaging and agri-exports, it is rapidly gaining market share even in its new businesses of branded apparel, greeting cards and packaged foods & confectionery.