At ITC, there is a shift to larger basket purchases, large value packs with infrequent shopping frequency. Digital shopping surged exponentially even as neighbourhood grocery stores emerged as the lifeline for essential supplies
In the short term, Indian economy will face multi-dimensional challenges in the short term. But, India remains one of the major economies in the world with huge potential.
To capture the potential, companies will have to gear up for 'next normal' and reimagine the future as corporates brace to manage the crisis.
He compares the COVID-19 pandemic with Black Swan event. “Disruptive Black Swan events of the kind we are facing now, not only test resilience and adaptive capacity but can also unleash forces of innovation and creativity to shape a more sustainable and inclusive future,” said Sanjiv Puri, Chairman, ITC Ltd at 109th Annual General Meeting held on September 4.
“I am deeply convinced that the future will belong to purposeful enterprises who will constantly build competitiveness with agility and innovation to respond speedily to external shocks and emerge even stronger from the crisis.”
Puri further pointed out reimagining the future will encompass three distinct phases that will co-exist in the journey ahead.
“First, a ‘Survival’ phase as corporates brace to manage the current crisis. Second, a ‘Reboot’ phase as businesses align to the new normal with certain segments experiencing demand destruction, some new trends emerging whilst several pre-crisis trends gain accelerated pace," Puri said.
Third, as the crisis ebbs, corporates will have to gear up for the ‘next normal’ with some trends moderating, some remaining at an elevated level, certain segments witnessing recovery, whilst new opportunities and industry dynamics get constantly redefined,” he added.
To reach millions of consumers confined to their homes, ITC was a first mover in entering into collaborations with companies such as Dominos, Swiggy, Zomato, Dunzo and Amway to leverage their direct to home reach, he said.
The innovative ‘ITC Store on Wheels’ initiative was launched to directly service residential complexes.
Performance, New Launches
Puri also highlighted the performance of ITC for FY20 at the AGM. Gross Revenue and PBT (before exceptional items) for FY20 stood at around Rs 46,300 crores and Rs 19300 crores respectively. Non-cigarette segment revenue rose to Rs 31,000 crores during the year, accounting for nearly 60 percent of ITC’s total segment revenue.
ITC’s FMCG brands clocked an annual consumer spend of over Rs 19,700 crores in aggregate during the year. Segment EBITDA recorded a robust growth of 33 percent during the year.
Puri pointed out that the recent acquisition of Sunrise Foods Private Ltd, which was completed during the lockdown, will further boost ITC’s portfolio of products.
He also said that revenues grew ahead of the industry, amidst subdued demand conditions, and profitability improved significantly.
FMCG-Others Segment delivered comparable revenue growth of 19 percent, whilst Segment EBITDA demonstrated strong growth of 42 percent during the period. This was driven by revenue growth of 34 percent in Staples, Convenience Foods and Health & Hygiene products, which represent 75 percent of the portfolio.
ITC introduced over 40, first-to-market products and variants during the pandemic to meet emerging consumer demand.
During the lockdown, the Savlon portfolio of hygiene products was augmented with differentiated offerings including disinfectant sprays, advanced ‘Hexa’ sanitisers, soaps, body wash, germ protection wipes and so on.
Other products include ‘Nimwash’ - for washing vegetables and fruits, B Natural Plus range of Immunity beverages, Bingo! a range of new snacks, ITC Master Chef frozen foods, were launched to cater to the increasing demand.
Puri also said that the demand for essential products in the food and hygiene segments witnessed a surge.
“The company also witnessed growing preference for organic, naturals and fresh products though consumers also seek indulgence, comfort eating and even resort to ‘revenge’ consumption. Frozen food, ready to eat or cook meals score high on convenience, during these trying times,” said Puri.
"There is a shift to larger basket purchases, large value packs with infrequent shopping frequency. Digital shopping surged exponentially even as neighbourhood grocery stores emerged as the lifeline for essential supplies,” he added.