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ITC aims to become No.1 in branded foods
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Saturday, 19 November, 2005, 08 : 00 AM [IST]
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es/19Nov05.jpg" align="left"> ITC, the fastest growing food company of the country, made its entry into the branded & packaged foods business in August 2001 with the launch of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the confectionery, staples and snack foods segments. Apart from the current portfolio of products, several new and innovative products are under development in ITC's state-of-the-art product development facility located at Bangalore. Sabyasachi Samajdar of Food & Beverage News caught up with Ravi Naware, Divisional Chief Executive, ITC Foods, in New Delhi, for an exclusive interview.
The government seems to be serious in promoting the food processing sector in a big way. Given a chance what would be the changes you would suggest to the policy makers in promoting this sector?
The government's attempt should be to make good hygienically prepared food as affordable as possible. Necessary steps should be taken to ensure quality and adequate availability of processed foods in the country. As you know, the packaging cost of processed foods is very high today. The government should remove the taxes on the packaging material for processed foods. Another area of concern is the high level of post-harvest wastage of agri-products due to lack of infrastructure. So, the government should encourage any kind of investment on infrastructure development. In the last budget, the government attempted to encourage HACCP norms to ensure food quality. Such efforts are good and the policy makers should ensure mandatory assurance of quality in processed foods.
How is the competition in the domestic market?
India has a continously expanding processed foods market. The spending capacity of urban people is on the rise. They are also finding less time for preparing food thereby tending to prefer packed foods.
Thus we have an ever increasing food market on one side. On the other hand, competition is also hotting up. Indian foods market, particularly the processed foods market is now very competitive. There are large Indian companies as well as the MNCs like Cadbury, Nestle and Pepsi who are already battling for market share. As far as ITC is concerned, we are in the process of becoming number one in the processed food segment as we are in other segments like tobacco and paper. In order to achieve our goal we need to grow our business and I believe that we have the ability to do so.
What are your strengths? Leading brands? Market share of your brands?
ITC has already e-choupal, under which 3.5 million farmers of the country are directly connected with us. We source our raw materials for the food industry directly from the farmers and I believe there is no other Indian company that has a similar facility. As you know our Aashirvaad brand atta has become the number one in the country because of these e-choupals, from where we source our raw materials. The market share of Aashirvaad atta is now 40 per cent. We are in the biscuit segment and the market share of our Sunfeast biscuit is 8-9 per cent today. It is remarkably growing. Our biscuit brands like Orange Marie, Butter-scotch, Tough Fantasy, Chilly Flick, Snacky have already captured the consumer's mind. In the confectionery segment, our Mint-O Fresh brand has 21 per cent market share and is the market leader having beaten established brands like Cloromint. We have the brands like Kitchens of India - the ready-to-eat food and ready-to-cook food, which are the best in the market. In the children's confectionery, our brand Candiman has 10 per cent market share. We have engaged Shah Rukh Khan, the number one Bollywood star, as our brand ambassador and this is helping us a lot to capture the market.
What are the long-term growth strategies of your company? Any immediate expansion plans?
We would like to grow with all of our food items. We are going to introduce Nice, a new brand in the biscuit market and in the spices market we are introducing Aashirvaad spices very soon. Although Aashirvaad Spice is already existing in the northern and western Indian markets, it will be marketed in the southern and eastern Indian markets in a big way.
What are the changes that the Indian food processing industry witnessed in the last 5 years? And what changes do you expect in the next 5 years?
There is huge change - the processed food industry is growing 12-15 per cent per annum. Last 5 years it has grown almost double. The unbranded food firms are becoming branded. This trend will continue even faster for the next 10 years. In the next couple of years you will see that the rate of growth in the food sector is increased and new technologies introduced.
People are now travelling frequently from one region to another region thereby increasing the scope for the industry to introduce a variety of foods in the market. In the near future you will easily get the South Indian foods in Eastern India or the Northern Indian foods in the markets of Southern India.
What is your opinion on FDI in the food retail? Do you think Indian food companies shall have to face any threat if the government allows 100% FDI in food retail?
Indian food industry has enough strengths to cope with the FDI in the food retail. But we have to consider our farming community which forms 72 per cent of our population. So, FDI should be related to the farming community of our country. If there is something good for the farmers of this country it's fine. No problem in FDI in the food sector.
What do you think about the standard of the manpower in the food processing sector?
We have excellent manpower in the food processing industry. There are several universities in our country which conduct courses of food processing. They also have the specialisation courses like Fruit Processing, Dairy Technology, and Horticulture.
What do you think about the potential of Indian food brands in the competitive global market?
It's a little difficult for the Indian food companies to compete in global market because big players are already in the global market with their centuries old brands. But we have the opportunity to explore the global market with our vegetarian brands and there is tremendous scope for us because we have so many veg foods. We also have the ethnic Indian cuisine and a variety of spiced foods. If we introduce properly these Indian spiced food to the global market I'm sure that we can capture the global market.
What are the export opportunities for Indian food brands? Is your company planning to enter the global market?
As I told you there is a scope for Indian cuisine in global market. In order to utilise this potential, we started exporting of Kitchens of India to the global market and now it has become our export brand. Last year, we exported to the US, UK, Australia and got a good response in those markets.
How do you expect to see your company in 2015?
I would like to see my company in 2015 as the number one food company of India.
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