ITC Foods, a leading player in the Indian food industry, is shifting its focus towards strategic acquisitions to drive growth and expansion. The company’s recent acquisitions of Yoga Bar and 24 Mantra Organic are part of its “ITC Next” strategy, which prioritizes value-accretive acquisitions as a key driver of growth. According to Hemant Malik, Executive Director of ITC, the company plans to drive growth through a combination of brownfield and greenfield investments, despite challenges such as subdued urban consumption and high inflation.
The company is navigating these challenges through cost management initiatives, pricing actions, and a strategic push towards premiumization. Malik expects the premium category to grow at least twice the pace of the overall FMCG business, driven by consumer demand for health, indulgence, convenience, and premium offerings. Currently, around 30% of ITC’s portfolio consists of premium products, and the company is creating new offerings to cater to the evolving needs of consumers, including health-seeking and Gen Z consumers.
The strategy appears to be paying off, with ITC’s revenue from packaged foods increasing by 28% to Rs 21,982 crore in FY24-25. The health segment is the fastest-growing segment for the company, growing at 40 times the rate of the remaining foods business. Malik noted that the food category still has significant headroom for growth, particularly since a large part of it remains unbranded. The company is keeping a close watch on emerging consumer needs and is creating new products to cater to these trends.
ITC’s focus on premiumization and strategic acquisitions is expected to drive growth and expansion in the Indian food industry. With a strong portfolio of brands and a deep understanding of consumer needs, the company is well-positioned to capitalize on the growing demand for health, convenience, and premium offerings. As the Indian food industry continues to evolve, ITC’s strategic approach is likely to pay off, driving growth and expansion for the company in the years to come. The company’s ability to navigate challenges and adapt to changing consumer needs will be key to its success in the Indian market.