How India’s largest FMCG innovated & launched 40 products during the lockdown period
ITC is one of India’s foremost private sector companies and a diversified conglomerate with businesses spanning Fast Moving Consumer Goods, Hotels, Paperboards and Packaging, Agri Business and Information Technology. The Company is acknowledged as one of India’s most valuable business corporations with a market capitalisation of nearly US$ 50 billion and a gross sales value of US$ 10.8 billion (figures as on 31.03.2019) . ITC was ranked as India’s most admired company, according to a survey conducted by Fortune India, in association with Hay Group. Established in 1910, ITC completed 100 years in 2010 and is part of Forbes 2000 list. A global exemplar in Sustainability, ITC is the only enterprise in the world of comparable dimensions to be carbon-positive, water-positive and solid waste recycling positive for over a decade now.
Over the last decade, ITC’s new Consumer Goods Businesses have established a vibrant portfolio of 25 world- class Indian brands that create and retain value in India. ITC’s world class FMCG brands including Aashirvaad, Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle, Sunbean, Fiama, Engage, Vivel, Savlon, Classmate, Paperkraft, Mangaldeep, Aim and others have garnered encouraging consumer franchise within a short span of time.
The competitiveness of ITC’s diverse businesses rest on the strong foundations of institutional strengths derived from its deep consumer insights, cutting-edge Research & Development, differentiated product development capacity, brand-building capability, world-class manufacturing infrastructure, extensive rural linkages, efficient trade marketing and distribution network and dedicated human resources. ITC’s ability to leverage internal synergies residing across its diverse businesses lends a unique source of competitive advantage to its products and services.
ITC’s ‘Nation First: Sab Saath Badhein’ philosophy underlines its core belief in building a globally competitive and profitable Indian enterprise that makes an exemplary contribution to creating larger societal value. As a company deeply rooted in Indian soil, ITC is inspired by the opportunity to serve larger national priorities.
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“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.Peter Drucker
Among the plethora of new terminology that this pandemic has given us, we now also have a distinction of different industries, essential and non-essential. Over a period of time, as the lockdown has progressed, we have all begun to understand this distinction better. We now know that grocery is an essential survival need. Even before the government announced the first lockdown, a lot of my friends suggested I stock up for at least two months of groceries. The consequences of a pandemic created immense uncertainty.
As I tapped on the grocery app, adding one item after the other; I thought about how the FMCG sector was going to operate. How will they run factories in a pandemic? How about their raw material supplies? And how was their distribution managed, especially the inter-state movements?
It has been more than two months since the lockdown. When it comes to the availability of the household essentials and grocery, there has been no issue whatsoever. Despite intermittent news of vehicles being held at the borders, drivers finding it difficult with the roadside food outlets closed; FMCG companies have ensured a continuous supply into our homes.
As I began narrowing down my choices of companies I could reach out to, I was keen on having an Indian brand. So I picked a company that has created multiple food brands in the FMCG space. The company used to be singled out for its cigarette business but has come to have more than 60% of its business come from other diverse verticals. ITC has 160 factories across 130 cities. With presence in 21 states and 220 districts, the company’s agri businesses are spread far and wide. With more than 100 hotels in over 70 destinations, ITC brand of premium hotels has set new standards of excellence in the hotel industry. At a personal level, ITC’s best recall in my household is with the Aashirvaad atta, Yippee noodles, Savlon antiseptic, Shower to shower talcum, Fiama shampoo and classmate notebooks.
I was filled with gratitude and humility, when despite the chaotic requirements of his corporate life, Mr. Anil Rajput, head of Corporate Affairs at ITC Limited agreed to talk to me. Anil’s job entails public policy advocacy related to ITC’s business verticals across its hotel business, FMCG, paper and paperboards, printing and packaging, cigarettes and agri business. Besides his role at ITC, Anil chairs a FICCI Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE). He is also the Chairman of ASSOCHAM National Council on Advertising, Marketing Brand Promotion and Protection.
I am overwhelmed to interview a person of his stature. How can any story do justice to his 44 years of experience with ITC. A lifetime of experience, where he would have witnessed many challenges, I am curious if he has seen anything of this kind before.
“There has been nothing like this in the last 100 years. The closest events of this nature could be World Wars 1 and 2. This pandemic, however, is even more crippling for the global economy and the end is not yet in sight, because we are fighting an invisible enemy. Today the globe is much more interconnected and Interdependent than it was during World Wars 1 and 2. Therefore, economic impact would be more severe and would likely last much longer. We already see how this pandemic is impacting the health, wellbeing, and livelihoods of the society, and it is difficult to see the light at the end of this tunnel.”
As early as February 2020, one started to feel the growing concern of coronavirus across the globe.
“ The issue in India became more apparent in early March, which is when we started to prepare for any potential impact on our ecosystem from this pandemic. Our businesses and value chains create sustainable livelihoods for more than 6 million people, a majority of whom represent the poorest in rural India. 34000 people are directly employed by the group. When the signs emerged, our first and foremost priority was to ascertain employee safety.
ITC is known to be an enterprise with a human face. Even before COVID-19 became a crisis, our Chairman, Sanjiv Puri, put the wheels in motion to ensure the health and safety of all employees. Within lightning speed, HR was asked to develop appropriate advisories — do’s and dont’s — for all employees, particularly for those working on the front line. He ensured that ITC’s support model addressed holistic employee well being — for physical and mental health. We ensured that wherever it was possible to work remotely, infrastructure was created to work remotely.”
ITC’s next priority was to keep our business operation running, with the right safety protocols. On one hand, the company knew that this was going to cause a disruption in the supply chains and needed to prepare for that, on the other hand there was also a need to ensure the supplies of the FMCG essentials did not fall short in the market.
“ We ensured our factories were set up with all safety protocols. Our learning and development department needed to be agile and to be able to train our distributed manpower on social distancing. Our workers were provided additional incentives and meals and all the safety equipment they needed to take care of themselves while they went about their work. We were in dialogue at various levels with the authorities to ensure that workers had access to come to work and our logistic partners were also able to work seamlessly to meet the national call of duty.”
Doing this at the scale that ITC operates was no easy feat. Even with FMCG, different brands were anticipated to see different impacts. While the demand for products like atta, noodles, biscuits, chips, juices was expected to soar; sales of other products like classmate notebooks, chewing gums were expected to be under pressure, at least in the short term. Since cigarettes were termed non-essential items, smokers may not have had easy access to cigarettes, therefore this business was expected to show some revenue shortfall. The key was to focus on the customer’s needs. For example, the company reprioritized a newly commissioned perfume manufacturing facility in Himachal Pradesh for production of sanitizers sold under the Savlon brand.
“ The key was to focus on the customer’s needs. Balancing was critical. Given the social distancing requirements, we could not operate our factories at full manpower. This required refashioning all the processes to ensure that we maximize our capacity utilization while staying within government regulations. COVID-19 provided a new opportunity for the company in the area of hand sanitizers. Our R&D and product development teams were quick to seize this opportunity to be able to respond to what our customers need.”
The FMCG business innovated at all levels. A typical product launch from conceptualization to launch takes around 6–7 months. Savlon’s brand of sanitizers and disinfectant spray was launched within a month of its conceptualization; that too when teams were coming to terms with the new reality of the world.
While for products like the sanitizer, keeping affordability in mind, the company launched hand sanitiser sachet at 50 paise and slashed prices of their existing units from Rs. 77 to Rs. 27.
“ Sanitizers are our armor in this battle. What is the use of production if they are not affordable by the millions of customers who need it but cannot afford to spend a hundred rupees or more in one go.”
Keeping the need of not wanting to do multiple top-ups, the company came out with larger packaging for its food products.
Innovation and new partnerships happened on the distribution side too.
“COVID-19 restrictions forced us to innovatively look at our distribution channels to reach customers in the quickest manner by delayering our supply chain systems. We looked at more avenues of hyperlocal deliveries and partnered with Amway, Dominoes, Swiggy, Zomato, Dunzo. We also started delivering through our own ITC stores web portal. The ‘Store on Wheels’ initiative has partnered with apps like mygate, etc. to directly send trucks to residential societies that have sufficient demand to make the operations cost-effective. This is a win-win proposition for customers and ITC. Customers do not need to step out to get their groceries. Our diverse range of products ensure we have one for every need.”
At a time when companies were under committing, ITC’s ad campaign on an assured supply of Yippee noodles created a euphoria for the home alone, work stressed customers. Yippee registered growth during the two months since the pandemic.
While prioritizing short term needs of essential items, the company also continued to actively work on its mid-to-long term strategy. Be it the acquisition of Sunrise foods to fortify its spices business or extension of the Aashirvaad brand to include ghee, pouch milk, paneer and pouch curd; ITC continues to not lose sight of the sectors that are now an even bigger opportunity. The company expects growth in health, wellness and hygiene products and is focusing on innovations across all its verticals.
Even before the Prime Minister’s push for Make in India and self-reliance, ITC’s mantra has been Nation First. Most of its raw materials are locally sourced. In the ₹7,400 crore agarbatti business, ITC ‘s Mangaldeep brand holds a significant share. For the agarbatti business, India is importing raw batti from China and Vietnam. This results in job creation outside the country. This is because production of raw batti is primarily plantation of a specific species of bamboo, which is currently not available in India. To make India self-reliant in production of raw batti, there is a need to plant the right type of bamboo in India. ITC is working with the farming community in the northeast to ensure India’s self-reliance in production of raw materials for agarbatti and creating new jobs opportunities in the country.
“ ITC is an organization with an Indian soul and will continue to work for the benefit of its citizens. We are always exploring avenues that can create more livelihood opportunities in rural hinterlands of the country .”
Shifting gears on other businesses, the cigarette business, a money spinner for ITC, is currently on slow burner. ITC’s agri business has been constrained in the supplies of commodities in the market. Mandis have been closed, labor for harvesting is hard to come by, farmers are not able to protect the crops, trucks are stuck. The recently announced reforms for governance and administration of the agriculture sector; including amendments to the Essential Commodities Act, reforms in agricultural marketing and risk mitigation through predictable prices will empower farmers, strengthen agri-food processing linkages and enable demand-driven value added agriculture.
“The policy makers especially in the agri space were very quick to respond to the needs of the farming community and made sweeping changes, which will not only give relief in the short-run, but will have transformative impacts on the lives of farmers in the years to come. The company’s institutional capabilities help as the company constantly engages with the farmers and laborers at the grass root level on one hand and district administrations, state and central government on the other. ITC is also making focused efforts to educate farmers and their family members to adopt preventive measures to contain the spread of COVID-19 in their communities. The Agri Business is also leveraging mobile technologies such as ITC e-Choupal 4.0 and local field staff strength to ensure continuity of farming by hand holding the farmers on best practices and deploying relevant technology with safety measures.”
ITC’s hotel business has also come to a standstill. Only 5 of the ITC hotels are operational; that too as quarantine facilities or for stranded guests. The company realizes it will be a long while till it gets recovered and is taking innovative measures to keep its customers engaged.
“ITC is proud to present the #5StarKitchen”Today the Nation faces an unprecedented challenge. ITC set up a Contingency Fund of Rs 150 crore to address and manage the challenges arising out of this adversity. This initial fund has been utilised primarily to provide relief to the vulnerable and most-needy sections of society who have been harshly impacted by the pandemic and have faced significant disruption in their livelihoods.. To make a humble contribution to the Government’s efforts in mitigating the crisis, ITC pledged its contribution of Rs 100 crore to the #PMCaresFund. ITC has also contributed Rs 27 crores to CMs’ relief funds across states. We have handed over a 30 bed hospital to the district Administration in Haridwar to provide immediate care during COVID 19. The Company is working closely with local administrations of 23 states across the country to provide essential commodities, especially to those in distress including migrant labourers. A range of food products have been donated to district administrations, police administration, Railways and NGOs. These include 17 lakh packets of noodles, 32 lakh packets of biscuits, 22 lakh packs of fruit juices, 7 lakh kgs of atta, 16 lakh packets of snacks, 7 lakh packs of milk shakes and 4.5 lakh pieces of chocolates. Given the importance of protecting health and hygiene in fighting the COVID menace, ITC has also distributed over 28 lakh pieces of soap to health centres, hospitals and police, one lakh masks to frontline workers and provided 3000 PPEs. ITC’s Foods Division has extended support to children and senior citizens by sending food supplies across the country through its ‘Aashirvaad Box of Hope’ and ‘Sunfeast Box of Happiness’ initiative. Similar boxes were also provided to workers of outsourced manufacturing units. Over 100,000 boxes have been delivered to date. Over 3.5 lakh meals have been cooked in ITC hotel’s kitchens and provided to migrant workers and needy people across the country. Confectionery brand from ITC, Jelimals has come forward with an initiative to create awareness amongst children about the 5 steps to prevent the spread of Covid-19, as recommended by WHO. Jelimals teamed up with Chhota Bheem to bring out the “Do the 5” song, that is modelled on these five steps.” . A cooking show that for the first time brings together the acclaimed Chefs of to your TV screens with some amazing recipes. The show has commenced since May 23, 2020 and is being telecasted on 33 Star Channels and Hotstar every weekend for the 6 weeks. We are also bringing our favorite food to the comfort and safety of our homes through tie-up with hyper local players. To prioritize our employees well-being, we have started several skill development programs through digital platforms that are processing salaries well ahead in time.” Anil Rajput, Senior Vice President Corporate Affairs at ITC Ltd, Non-Executive Director International Travel House.
While managing a company at this scale, with diverse businesses, stakeholders can take all of one’s priorities, ITC has not lost sight of their role in the community.
Underlying all of the challenges and the response lies the core belief that agility and innovation would be the key success factor for any organization in these times. Until the tail end consumer, the tail end worker and the tail end supplier or partner is not safe and financially sound, the job is not done.
“ We are constantly adapting our business models and trying to stay ahead of the curve, while staying true to our mission and priority of offering our customers the best in-class products and services.”
Anil Rajput joined ITC Limited in 1976 in the finance function. At the age of 27 years, Anil assumed the charge as General Manager, travel. In this role, Anil laid strong
foundation for ITC’s domestic network across India. In 1989, moved back to Hotels division of ITC and was assigned with the responsibility to work on New Projects as Divisional Project Controller.
Subsequently he was elevated as Vice President — Project, Finance and Development. Anil was was instrumental with various hotel projects — to name a few, ITC Kakatiya at Hyderabad,
ITC Rajputana at Jaipur, ITC Sonar Bangla at Kolkata, ITC Grand Maratha and ITC
Grand Central at Mumbai.
In the year 2003, he moved to ITC’s Corporate Affairs function as Vice President
Corporate Affairs.In 2007 took over as Head of Corporate Affairs for ITC Ltd as Senior Vice President Corporate Affairs and played a key role in the 13 verticals that ITC has built up over
the years in the regulatory and policy framework. Besides his role at ITC, Anil is also the chairman, ASSOCHAM National Council on Advertising,Marketing Brand Promotion and Protection; Chairman,FICCI CASCADE(Committee on Anti-Smuggling & Counterfeiting) and n on-Official Member,Managing Body of Indian Red Cross Society(Delhi Branch).
Originally published at http://dishachhabra.com on January 30, 2021.
