ITC Reports 12% Increase in FMCG Consumer Spending to Rs 32,500 Crore in FY24

Consumer spending on ITC's FMCG products has surged by 12% to nearly Rs 32,500 crore in FY24, reaching over 25 crore households. The company measures annual consumer spending by summing up what consumers spend on its goods, including net sales turnover, channel margins, and taxes.

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The FMCG portfolio of ITC includes over 25 Indian brands built through organic growth strategies. These brands now represent an annual consumer spend of nearly Rs 32,500 crore and reach over 250 million households in India. This is a significant increase from the previous year's Rs 29,000 crore.

ITC's Leading Brands

Among ITC's leading brands, Aashirvaad dominates the branded atta segment. Similarly, Bingo leads in the bridges segment of snack foods, while Sunfeast is a leader in the cream biscuits segment. In the notebooks segment, Classmate is the top brand, while YiPPee, Fiama, and Mangaldeep hold second positions in noodles, body wash, and agarbattis respectively.

Despite challenging macroeconomic conditions and inflationary pressures, ITC's FMCG businesses have grown impressively. The company noted that overall consumption demand remained subdued during the year, especially in rural markets and value segments.

Revenue and Growth

ITC's FMCG businesses recorded a segment revenue of Rs 20,966.83 crore for the year ending March 31, 2024. This represents a growth of 9.6% over the previous year. Segment EBITDA grew by 19.7% to Rs 2,338.50 crore with margins improving by 94 basis points due to premiumisation and efficient cost management.

The company remains confident about scaling up its FMCG businesses rapidly. This confidence is backed by a strong future-ready portfolio powered by purpose-led brands, quality products, deep consumer insights, innovation, and a resilient supply chain.

Strategic Strengths

ITC plans to leverage its institutional strengths to continue growing its FMCG businesses. These strengths include strong backward linkages with its agri-business, a wide multi-channel distribution network, cuisine knowledge from its hotels business, industry-leading packaging knowhow, and robust R&D platforms nurtured by its Life Sciences and Technology Centre (LSTC).

In FY24, ITC's gross revenue stood at Rs 69,446 crore. The company's reach has expanded from 23 crore households to 25 crore households over the past year.

"Notwithstanding the challenging conditions and heightened competitive intensity," ITC stated in its annual report for 2023-24, "your company's FMCG businesses grew ahead of the industry in both urban and rural markets driven by deep consumer insights, purposeful innovation, portfolio premiumisation, strategic portfolio augmentation, sharp execution of channel-specific business plans, enhanced distribution footprint and superior last mile execution."

ITC's FMCG businesses include branded packaged foods, personal care products, education and stationery items, incense sticks (agarbattis), and safety matches. These segments have shown impressive growth over several years.

The company highlighted that input costs remained elevated compared to pre-pandemic levels. Several commodities saw sequential price increases while others experienced price moderation on a high base.

The Kolkata-headquartered conglomerate continues to focus on premiumisation and supply chain efficiency to drive growth. Agile cost management and judicious pricing actions have also contributed to improved margins despite the gestation costs of new initiatives.

ITC's annual report underscores its commitment to leveraging institutional synergies for organic growth. The company aims to maintain its leadership position in various FMCG segments through continuous innovation and strategic execution.