ITC bets on new growth engines, expands food-tech and wellness play

Mint

3 days ago

New Delhi/Mumbai: Diversified conglomerate ITC Ltd is expanding its presence in new business segments such as food-tech, wellness, sustainable packaging and agri-tech platforms, as part of its broader 'ITC Next' strategy.
Speaking at the company's 113th annual general meeting, chairman Sanjiv Puri said the group is building a 'future-ready portfolio' to navigate a challenging business environment. He said the environment was at a critical 'TURN'—turbulence, uncertainty, rapid change and the need for novel strategies.
'Future readiness is not merely about adapting to change, it is about anticipating, innovating and proactively shaping the future,' Puri said.
ITC's food-tech vertical, which combines its packaged foods, hospitality and digital platforms, has seen a 108% compound annual growth rate over the last three years. Operating through four brands—ITC Master Chef Creations, Aashirvaad Soul Creations, Sunfeast Baked Creations and Sansho—the full-stack platform currently runs 60 cloud kitchens in five cities and is being scaled up across the country.
In FY25, the company launched over 100 new products across categories such as health and nutrition, hygiene, naturals, protection and convenience. One such launch is Pranah, a range of incense sticks and scented candles focused on aromatherapy. 'Consumers are seeking new therapeutic experiences as part of their wellness pursuits,' Puri said.
ITC also introduced Right Shift, a brand aimed at consumers above the age of 40, offering nutrition-based products developed using clinically proven natural ingredients and proprietary formulations.
The company continues to expand its frozen foods business through the ITC Master Chef range, which includes over 80 SKUs of Indian and Western snacks, breads and seafood. Its acquisition of Prasuma has added more than 170 frozen Pan Asian food options, available in over 100 cities.
ITC's expansion into niche and premium categories includes Sunfeast Baked Creations, a line of premium cookies positioned for quick commerce channels, and a Japanese Hokkaido milk-based soap bar under its Fiama brand.
'We are also introducing new brands and pursuing value-accretive acquisitions to address emerging opportunities and whitespaces,' Puri said.
He added that the company is consolidating its position in the organic segment through its acquisition of 24 Mantra Organic, which operates across 1.4 lakh acres of certified farmland in 10 states and offers over 100 SKUs. It complements the earlier acquisition of Yoga Bar and the recent investment in Mother Sparsh, a player in the natural baby care space.
'These strategic acquisitions have been structured in a manner that allows ITC to gain from the entrepreneurial zeal of the founders, while leveraging ITC's institutional strengths,' Puri said.
ITC said its agri-tech initiative, ITCMaars, supports over 2,050 Farmer Producer Organisations (FPOs) and 22 lakh farmers across 11 states. The platform integrates services such as AI-enabled crop advisories, image-based diagnostics, drone applications, market linkages and access to inputs and credit.
To promote farming-as-a-service, ITC is working on building an ecosystem of local entrepreneurs under models such as 'drone didis'. Puri said these interventions have led to a 15–20% increase in yields and up to 30% improvement in net returns for farmers.
The platform is being positioned as a long-term business opportunity, alongside its relevance to the core agri and foods segments.
The company's new packaging businesses under brands such as Filo, Bioseal and Fyba are positioned as sustainable alternatives to single-use plastics. The Fyba unit in Madhya Pradesh uses renewable materials such as bamboo, bagasse and wastepaper. Puri said this vertical has grown 2.4x over FY22 levels.
To address climate risk, ITC has undertaken assessments at 140 sites and across multiple value chains. Its 'climate smart agriculture' programme now covers 31 lakh acres across 100 districts, with a target of 40 lakh acres by 2030. Watershed development efforts now span 18 lakh acres, enabling estimated annual water savings of 1,400 million kilolitres.
'Climate change is expected to impact food security and livelihoods. Adaptation is now as critical as decarbonisation,' Puri said.
The company last year announced plans to invest ₹ 20,000 crore over the medium term across FMCG, packaging, agri and export-linked manufacturing. More than 90% of ITC's raw material needs are now met through local sourcing. Its network of 250+ factories includes integrated consumer goods manufacturing and logistics hubs aimed at enhancing agility and reducing reliance on external supply chains.
Puri said global disruptions have exposed the fragility of traditional supply networks. 'The need to build agile, diversified and localised manufacturing and supply networks is critical to enhance resilience,' he said.
ITC's products now reach over 260 million Indian households and are present in over 70 global markets. 'It is our firm belief that Indian brands must adorn the global stage, but only after establishing a legacy in Bharat,' Puri added.
The FMCG major is set to announce its June quarter earnings on 1 August. Analysts at Nuvama Institutional Equities indicate an overall revenue growth of 9.9% year-on-year. 'The cigarette segment is projected to see a 4% year-on-year increase in volumes, leading to a 5% rise in net revenue and a 3.4% growth in EBIT,' they said. Ebit is earnings before interest and taxes.
While FMCG sales are expected to grow by 5% year-on-year, Ebit margins are likely to contract sharply by approximately 22% due to negative pricing in notebooks, which have a higher salience in Q1FY26E, as per the Nuvama report released in July.
On Friday, ITC shares were marginally lower at ₹ 409.55 on the National Stock Exchange in a largely weak market.