afaqs!

ITC explores ways to venture into health and wellness market

By Arnab Dutta , Business Standard, New Delhi | In Marketing | September 12, 2017
A project at Sehore, Madhya Pradesh, is underway to develop medicinal plants and conduct pilot trials.

Salt-to-hotel conglomerate ITC is exploring ways to develop health and wellness consumer products. The firm, currently experimenting with medicinal plants, may foray into the fast-growing natural personal care products market eventually. While it has already ventured into fortified food products under its Aashirvaad brand, the next phase may focus on covering therapeutic, preventive and post-care segments.

To begin with, it has taken up a farm-level project at Sehore district of Madhya Pradesh this year, where it is studying an array of medicinal plants like ashwagandha, sarpagandha, mint, tulsi and gudmar, among others. The 110-acre farm, built on semi-fertile land, is self-sufficient with 300,000 liters of rainwater harvesting facility and includes a nursery. The project is expected to take another couple of years and ITC plans to conduct pilot trials before taking a final call on its products strategy.

Sanjiv Puri, chief executive officer, said the company was exploring ways to develop "specific benefit-led products in the consumer goods space". "Health and wellness are one of the vectors of our FMCG business and work is in progress. While medicines are something that is farthest away from what we do, the medicinal plants that we are working on can be used in supplements and natural personal care segment. We are already using aloe vera and lotus oil in personal care products," he said.

ITC's interest into space is not without rationale. According to consumer data analyst Nielsen India, the herbal natural segment is growing 1.7 times than that of other personal care categories. During the past five years, it has eaten up 5 per cent of the market and is currently pegged at Rs 18,500 crores with 41 per cent market share. Analysts from Nielsen also predicted that the category will gain 1 per cent share of the market every year.

Fresh foods & vegetables

ITC is also stepping up its fresh foods and vegetable business. The firm will launch new brands and products this year and will keep adding offerings under its existing brands like Master Chef and B-Natural. ITC is looking at expanding the division by coming up with fresh, frozen, dehydrated and processed products. It will launch fresh potato and onion in 2017 under a new brand, apart from coming up with more sea food items soon.

According to Puri, the 20 integrated food manufacturing and logistics hubs that will become operational over next few years would help it revamp its supply. "This is a segment of the market that has tremendous growth potential as only 2-3 per cent of food is processed in India."

To cut down on time of processing and delivering fresh and frozen foods, it is also planning to set up village-level collection centres, said Chitranjan Dar, group head of projects and R&D. "The aim is to bring the farm produce and process them within four hours of harvest. There will be outreach programmes too," Dar said.

© 2017 Business Standard