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ITC expands ambit in grocery biz

In order to expand its ambit in grocery biz especially in the agribiz segment, ITC would sell premium fruits and vegetables and pricey processed foods thereby competing directly with its existing retail rivals and also new age grocers such as Amazon Fresh, hastening its transformation into one of India’s most diversified consumer companies from just the country’s biggest cigarette maker. At the core of ITC’s initiatives to expand beyond snack foods is an elaborate distribution network, underpinning a wider product portfolio at the century-old giant: Seeking to strengthen its Rs. 10,000-crore diversified consumer business, ITC plans to build a retailing presence similar to Mother Dairy, said official sources, claiming that the company was looking to build its Master Chef franchisee with processed, frozen foods, while fresh produce such as fruits and vegetables will be sold under a separate brand name. Announcing the company’s foray into frozen sea foods with prawns, they said adding that by the next quarter, we plan to do fruits and vegetables. Each quarter, we will probably have a rollout, eit her processed, frozen or dehydrated. The idea is to have a series of products which can be laid on top of existing channels, in the cold chain, in stores, once the capacity is created. Processed foods will include products that have high variability in prices. The entire aspect of perishability has to be dealt through processing, cold chain and backend development, creating consumer demand and behavioral change of getting consumers buying fresh. While the frozen foods category is minuscule at under Rs. 1,000 crore, the fresh produce market is multiple times larger and estimated at Rs. 3 lakh crore. ITC will also sell online, starting with BigBasket and other existing online channels by next quarter. The profitability of ITC’s consumer goods businesses declined 72% last year to Rs.28.12 crore.

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