ITC Foods, particularly its dairy and beverage business, is shifting its focus towards volume-led growth in the fiscal year 2025. Sanjay Singal, the COO, outlined the company’s strategy, citing factors such as stabilized commodity pricing, an expanded summer portfolio, and improved market penetration in smaller regions as key drivers for this approach.
Singal highlighted the recent stabilization of milk prices, indicating that retail prices are not expected to increase further. Despite facing inflationary pressures in categories like dairy and beverages in the previous fiscal year, ITC Foods refrained from significant price hikes. Instead, the company plans to concentrate on increasing sales volume while managing supply chain costs efficiently.
The company aims to deepen its presence in various geographical areas, such as Bihar, by expanding into smaller markets with populations of 10,000 or less. Additionally, ITC Foods is gearing up for the summer season by launching new products and ensuring early manufacturing and distribution readiness, especially in regions like north and east India.
The recent product launches include an extended range of smoothies, premium coconut water variants, A2 cow milk-based milkshake, and new flavours of lassi. Singal emphasized the company’s commitment to outpacing category growth rates and gaining market share, anticipating double-digit growth in the upcoming fiscal year.
With the impending general election and warmer weather forecasts, ITC Foods plans to set up stalls near polling booths to promote its lassi and juice products. Furthermore, the company aims to expand its reach in rural areas by offering smaller SKUs at affordable price points, targeting populations of 5,000 to 10,000.
Singal noted a blurring of consumption habits between rural and urban consumers, with both segments showing a growing preference for packaged products, including dairy items. Additionally, ITC Foods is bolstering its premium portfolio with offerings like organic ghee, although the premium segment will not dominate the overall product portfolio.
Despite challenges, ITC’s non-cigarette FMCG segment recorded notable revenue growth in Q3FY24, reflecting the company’s resilience and strategic initiatives in the face of evolving market dynamics.