Consumers spent Rs 32,500 crore to buy Kolkata-based ITC’s fast-moving consumer goods (FMCG), excluding cigarettes, in financial year 2023-24, the company said in its annual report released on Friday. This represents a growth of 12% against last year (FY23), when consumer spends on FMCG products stood at Rs 29,000 crore, a 21% increase year-on-year.
The modest rise in consumer spends can be attributed to weak demand and competitive intensity in FY24, the company said.
ITC measures the annual consumer spend as the sum total of what the consumer spends on buying the goods of the company. In this case, it is the company’s 25 FMCG brands, including labels such as Aashirvaad, Sunfeast, Bingo, Fiama, Classmate and B Natural, among others.
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Consumer spend is the net sales turnover of the brands along with channel margins and taxes. The company’s gross sales from FMCG will be lower than the consumer spend, the company said in its annual report.
ITC also said its combined share from e-commerce and modern trade in FY24 stood at 31% of its FMCG portfolio, higher than the 17% share seen in FY20. The share growth, it said, has come on the back of exclusive pack assortments, channel-specific business plans, digital-first brands and more collaborations with channel partners. The company also said it was exporting its products to 70 countries versus 60 countries earlier, with the production-linked incentive (PLI) scheme providing a fillip to exports across food categories.
In FY24, ITC’s gross sales from non-cigarette FMCG or ‘FMCG Others’ was `20,966.83 crore, up 9.6% versus last year. The FY24 growth, ITC said, came amid a challenging environment.
The Earnings before interest tax depreciation and amortisation (Ebitda) of the FMCG business for FY24 grew 19.7% y-o-y to `2,338.50 crore. Ebitda margins expanded by 94 basis points to 11.2% during the year, led by premiumisation, delayering operations and agile cost management and judicious pricing action.
ITC also said it has scaled up FMCG distribution to over two times of the pre-pandemic levels, supported by a hub and spoke distribution model with continued expansion of rural stockists network to 1.3 times over the last two years.
ITC’s products reach 7 million retail outlets, of which more than a third are serviced directly, it said, adding that its distribution platform operated like a smart highway for products. The market also added more markets to its distribution highway leveraging synergies with its agri business and using data insights and technology.
ITC’s exclusive D2C platform has received good consumer response. Powered by digital technology and a robust fulfilment infrastructure, the platform offered consumers on-demand access to a wide range of ITC’s FMCG products across 45 categories and over 800 products, the company said.
Category specific D2C platforms such as Classmateshop.com, Dermafique.com, Aashirvaadchakki.com, Fiama.in, etc, enable obtaining valuable consumer insights and augmenting franchise for ITC’s products, it added.
From: financialexpress
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