ITC expects food business to touch Rs 10,000 cr mark in 18-24 months

ITC Ltd is hoping to cross Rs 10,000 crore mark in the food business in the next 18-24 months.

Its food business has crossed $1billion mark in 2014-15 (at the then exchange rate) by posting a revenue of Rs 6,411 crore and it was further increased to around Rs 7,200 crore.

It is now the second largest business within ITC and contributes nearly 18% of ITC on a net over basis.

Speaking to Business Standard after launching Fabelle, a chocolate Boutique at the ITC Grand Chola in Chennai on Friday, G K Suresh, vice-president - new category development, said that one of the key drivers is the new products, launched by the food business of ITC.

"With the current rate, our food business is expected to cross the Rs 10,000 crore mark in the next 18-24 months," said Suresh.

The company has entered into new categories of foods like dairy whitener and premium chocolates (already test-launched), and is currently looking at new offerings in staples and snacks segment.

ITC, which started of its journey in the food business with biscuits, entered snacks segment by launching Bingo brand and then in to instant noodles through brand Sunfeast Yippee. Last year it added juices, ghee and later expanded into dairy whitener and premium chocolates.

Suresh claims that it has forayed into a premium segment (in the chocolate) space, where currently no brand exits. Today the chocolate market in the country is estimated to be around Rs 7,000 crore and it is growing at around 10-12%, which is faster than the FMCG industry's growth.

Starting price of Fabelle would be around Rs 400 a box of five pieces and currently it goes as high as Rs 675 a box.

Fabelle Chocolates have been in the making for almost a decade with extensive research and trails in the company's pursuit to craft the finest luxury chocolates in India that rival the best in the World, said Suresh.

He noted, the Fabelle chocolate creation were put upto the senior management at ITC headquarters atleast 7-8 times over the last decade and every time it was sent back to the drawing board to excel its previous version.

After final nod, in April 2016, Fabelle was launched at ITC Gardenia (Bengalaru) and in July it was launched at ITC Sonar (Kolkata). The third market is Chennai with the launch at ITC Grand Chola.

"Initially we are planning to have it in the luxury ITC hotels before the end of this year and then we will look at malls and high streets with standalone stores," said Suresh, who declined to share revenue expectation from the new business stating that company's initial focus is to establish the brand first.

ITC is sourcing cocoas for Fabelle from Africa and South Amercia Madagascar, Ivory Coast, Venezuela, Saint Domingue and Sao Tome as cocoa required for such a premium product is not available in India.