Key Takeaways
- ITC Ltd is broadening its portfolio into food-tech, wellness, and sustainable packaging as part of its ‘ITC Next’ strategy.
- The company has seen significant growth in food-tech, with a 108% compound annual growth rate over the past three years.
- ITC is investing ₹20,000 crore in various segments, emphasizing local sourcing and sustainability.
ITC’s Strategic Expansion
ITC Ltd is actively diversifying its business operations beyond traditional segments. During its 113th annual general meeting, Chairman Sanjiv Puri outlined the company’s strategy known as “ITC Next.” This approach focuses on evolving amid a challenging business landscape marked by turbulence and rapid change. “Future readiness is not merely about adapting; it is about anticipating and proactively shaping the future,” he stated.
The food-tech vertical has become a major area of focus for ITC, with a recent compounded annual growth rate (CAGR) of 108% over three years. The company operates four brands—ITC Master Chef Creations, Aashirvaad Soul Creations, Sunfeast Baked Creations, and Sansho—managing 60 cloud kitchens in five cities. This segment includes over 100 new product launches in FY25, targeting health and wellness.
To cater to older consumers, ITC introduced Right Shift, a line offering nutrition-based products. The company is also expanding its frozen foods line, bolstered by its acquisition of Prasuma, which provides an array of frozen Pan-Asian choices.
In the organic segment, ITC’s acquisition of 24 Mantra Organic enhances its portfolio, boasting over 100 SKUs across 1.4 lakh acres. This strategy, along with earlier acquisitions like Yoga Bar and Mother Sparsh, positions ITC as a significant player in the organic and natural markets.
ITC’s agri-tech initiative, ITCMaars, supports 2,050 Farmer Producer Organisations (FPOs) and 22 lakh farmers across 11 states. The platform offers various resources, including AI-enabled crop advisories and access to credit, resulting in a yield increase of 15–20%.
Sustainability is another primary focus, with ITC’s new packaging initiatives aiming to replace single-use plastics with alternatives made from renewable materials. The Fyba unit has seen a 2.4-fold increase since FY22, reflecting growing demand.
Long-term investments of ₹20,000 crore are planned across FMCG, packaging, and agri-tech. Local sourcing helps meet over 90% of raw material needs. The company’s extensive factory network is designed to enhance agility and reduce reliance on external supply chains.
As ITC prepares to announce its June quarter earnings, analysts project a 9.9% year-on-year revenue growth, driven by performance in the cigarette segment. Amidst broader market pressures, ITC’s shares recently traded at ₹409.55 on the National Stock Exchange.
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