ITC Next Strategy: FMCG pivots, R&D push, key data

Consumer-first FMCG is the starting point

Sanjiv Puri, chairman and managing director of ITC, said FMCG companies must stay consumer-centric and evolve with contemporary trends, speaking at the Business Standard Manthan Summit during a fireside chat on “Reimagining FMCG for a Future-Ready India”. He framed the approach in simple operating terms: be where the consumer is and serve what the consumer needs. For ITC, that translates into being omnichannel and repeatedly refreshing and revitalising the product portfolio. The remarks came at a time when large FMCG companies are balancing growth, distribution shifts, and faster innovation cycles across categories.

Omnichannel and portfolio refresh: what ITC is emphasising

Puri linked consumer proximity with omnichannel execution, indicating that distribution strategy and product strategy now move together. He said the portfolio has to be “continuously” updated, which signals a steady cadence of renovation, new launches, and extension into adjacencies. In his broader comments on ITC’s strategy, he also described a structured portfolio approach: grow the core, address adjacencies, and create categories of the future. That framing positions the FMCG portfolio not as a single bet, but as a pipeline of core scale, near-core expansion, and newer category creation.

Acquisitions as new growth vectors

To illustrate portfolio expansion, Puri cited acquisitions including Yoga Bar, 24 Mantra, Prasuma and Mother Sparsh. He positioned these moves as additions to ITC’s “new growth vectors”, alongside scaling core brands. In earlier AGM commentary referenced in the provided material, ITC also spoke of value-accretive acquisitions such as Sunrise spices and investments in tech-enabled startups like Mother Sparsh and Mylo in fast-evolving mother and childcare spaces. The common thread across these references is the use of acquisitions and investments to speed up entry or expansion in specific, fast-growing consumer segments.

R&D intensity and private-sector participation

Puri said India has “a long way to go” in overall R&D investments, with private sector participation at about 40%. He called R&D investment “critical” and said India’s R&D intensity is historically low, while adding that at ITC it is core to strategy. He also pointed to the ITC Life Sciences and Technology Centre as among the largest private sector innovation hubs after CSIR. Separately, in an ET Now interaction, Puri said ITC has 350 scientists at its life sciences and technology centre and “close to 500 patents”, tying innovation to the creation of newer markets and opportunities.

Premiumisation beyond metros, including rural demand

On premiumisation, Puri said it is a natural outcome of economic progress and is visible beyond metros. He described India as an aspirational society and said premium products sell “deeply” across rural India. He pointed to rural traction for premium brands such as Choco Fills and Fiama Gel Bar. Puri also argued rural demand should grow faster because it remains relatively underserved compared to urban markets, linking the trend to the broader arc of India’s economic progress rather than a short-term phenomenon.

‘ITC Next’ strategy and the shift in revenue mix

Puri has described a transformation effort termed the ‘ITC Next’ strategy, aimed at building a future-ready, competitive, and resilient enterprise. In the provided material, ITC’s non-smoking FMCG verticals were said to contribute around 67% of revenue to ITC Ltd, underscoring the scale of the pivot beyond cigarettes. Puri told PTI that the strategy identifies competitiveness levers including digitalisation, sustainability, innovation, and supply chain efficiency. The stated objective is to keep innovating while leveraging enterprise strengths, while aiming to be a leader in the segments where ITC operates.

Building the FMCG portfolio: brands, adjacencies, and “future categories”

The company’s diversification has expanded into packaged foods, personal care and stationery, with brands such as Aashirvaad, Sunfeast, Bingo!, Fiama, Vivel, Savlon and Classmate referenced in the material. The approach emphasises “fortifying the core” while expanding product variants and moving into adjacent segments. Examples cited include Aashirvaad extensions into besan, dairy, and ready-to-cook foods, and adjacency offerings such as Aashirvaad frozen bread, vermicelli and ghee. Puri also referenced “categories for the future”, including frozen snacks under ITC Master Chef, as part of the portfolio refresh cycle.

Scale indicators: launches, reach, outlets, and exports

In ITC’s AGM commentary included in the provided content, the company said it has launched nearly 100 superior and differentiated offerings annually to strengthen a future-ready FMCG portfolio. It also said its FMCG products reach 250 million households, with consumer spends of INR 32,500 crore. Another FY22 reference said ITC launched 110 products in FMCG and expanded distribution to 70 lakh outlets across India. On international expansion, Puri said ITC has distribution arrangements abroad and exports to over 60 countries, with the aspiration that exports will make a substantial contribution over time.

Key figures mentioned across the statements

Market impact: what these signals mean for FMCG watchers

The emphasis on omnichannel and continual portfolio revitalisation points to higher operating tempo in launches, renovation, and channel execution. Premiumisation being described as visible beyond metros, and “deep” in rural India, underlines why product architecture and price-pack strategy can matter outside large cities as well. The strategy narrative also highlights innovation capacity as a competitive input, not only for incremental improvements but for creating newer categories. For investors tracking ITC’s consumer businesses, the repeated references to reach, consumer spends, outlet coverage, and exports provide tangible markers for the company’s FMCG scale and ambition.

Conclusion

Puri’s remarks across the summit, PTI comments, and AGM excerpts converge on a single operating thesis: stay close to consumers, refresh the portfolio continuously, and back it with innovation, supply chain efficiency, and premiumisation that extends beyond metros. ITC’s stated milestones such as FMCG reach, consumer spends, and product launch cadence offer concrete checkpoints for how the strategy is being executed. The next set of signals for markets will likely come through further portfolio actions under the ITC Next strategy and follow-through on the medium-term investment plan referenced in the material.