The document discusses ITC's performance in the packaged food industry in India. It notes that ITC ranks 3rd in the industry and its food segment grew 8% from 2017-2018. It then covers a PESTLE analysis, Porter's Five Forces analysis, VRIO analysis, SWOT analysis and value chain of ITC's food business. Finally, it discusses trends in health foods, energy drinks, global snacks and condiments as opportunities for ITC to expand its portfolio. The strategic objective identified is for ITC to enhance its portfolio in existing categories, expand into adjacent areas and new food categories to create new ones.

1. ITC Branded
Packaged Food
GROUP 508
PAYAL PRANSHU PRATIMA PRIYESH RAUNAK
17S536 17S537 17S538 17S539 17S540

2. Background
 F&B is the biggest consumption category in India
(Revenue in the Food market amounts to
US$233,433m in 2018)
 Liberalization has made F&B more organized than
before
 Disposable incomes and increase in monthly
spending has fueled the growth in the industry
 Changing consumer tastes have opened more
segments which have huge potential
 Improved Technologies has improved the
efficiency

3. Company’s Performance
 ITC is ranked 3rd in the packaged food industry
Segment 2017-
2018
2016-
2017
Growth
FMCG –
Food
10512 9731 8.0
Agri-
business
8265 7457 10.8

4. • Most of the packed
food items have been
exempted from
licensing
• Food processing
industries were
prioritized (bank
lending)
• Developmental
assistance is provided
under various
schemes by the
Government and
R&D is encouraged
• Despite the
economic slowdown
in 2012-2013 the
food and beverage
industry was un
affected
• Sales in Consumer
Foodservice grew by
12% reaching Rs.5
billion in 2012
• Approval of 100%
FDI; attracting
foreign players
• Festivals increases the
sales of packed food
items
• Western culture is
responsible for and
increase in
consumption of
packed food items
• Perception of people
is changing(believe
that packed food
items offer better
quality)
• Farmers are trained to
improve the yields
• Encouraging R&D for
better , efficient and
higher yield
productions
• E- Choupal : World’s
largest rural digital
infrastructure serving
4 million farmers
• The time taken and
number of legal
requirements to
fulfill in order to get
into processing
industries are
complex and a lot
many
• Voluntary Standards
are regulated by
organizations
involved with
certification system
concerning quality
• Global Warming
• Waste management
process
• Recycling and using
technology to be able
to convert or re-use
waste products
PESTLE

5. Porter’s Five Forces
Competitive Rivalry​: High
• Influence of unorganized sector in the
industry which makes competition intense
• Only 10% of India’s farm product come
under processed category
• High entry barrier for new entrants
The threat of New Entrants​: Moderate
• High investments are required to setup
processing units​
• A Iot of time is required to get the all the
approvals before setting a factory
Substitute Products: High
• Many close substitutes are available for
most given products
• Close substitute offering similar price is
readily available for most products​
Bargaining power of customers​: High
• Taste and preference of consumers is not
constant
• Low switching cost and wide variety
makes it easier for customer to switch
Bargaining power of supplier:
Low
Lower bargaining power of
supplier since population
largely relies on the
unorganized sector

6. VRIO
VALUE RARITY IMITABILITY ORGANIZATION
ITC has a diverse product portfolio of
value-added differentiated products,
ranging across all cost segments. Yes No No Yes
Market leader in one of a kind
premium ready-to-eat products
(Kitchens of India)
Yes Yes No Yes
The F&B division is supported by
sourcing ingredients directly from
farmers, given the deep rural linkages
fostered by the company’s Agri-
business, including the unique e-
Choupal initiative.
Yes Yes Yes Yes
All ITC-owned manufacturing units are
Hazard Analysis and Critical Control
Point (HACCP) certified.
Yes No No Yes

7. SWOT
Strength
• Exisiting distribution
channels are robust
• Ability to vertically
integrate, owns
farming lands and raw
material sources (E-
choupal)
• Diverse product
portfolio, serving to
different segments
(rural, urban, region
wise products)
Weakness
• Low switching costs,
and ability to
differentiate is limited
• ITC has been majorly
associated with
Tobacco, people are
not able to associate
ITC with other
products
Opportunity
• Changing consumer
tastes, ITC has a
potential to new
products (Health food
and energy drinks),
ITC already has the
capability
• Consumer spending is
increasing (Rs 2630 in
urban and Rs 1430 in
rural)
Threat
•FDI approval, can lead
to foreign giants
entering India (Walmart
has in house food
brands)
•Majority of the
segment goes for local
and economical brands,
and it is difficult to shift
those players

8. Value Chain and Value System
Producers Processors Distributors Consumers
Government/
NGOs/
Regulators

9. Comparative Performance

10. Trends and Opportunities

11. Strategy Map

12. Strategic Objective
The strategy that ITC is going to follow is “enhance its portfolio in the existing categories, expand
into adjacent areas, tap new food categories and try to create new ones”
Health Food Sector: In 2015, health food sector crossed the 10,000 crore mark. Healthy biscuits
had the sales of Rs 1,155 crore, Breakfast cereals of Rs 951 crores, and Healthy cereals of Rs
1250 crores
Energy Drinks Market: The energy drink market in India is valued at USD 155 million in 2017 and
is expected to register a CAGR of 9% in the next five years. This could be a good opportunity for
ITC. They can also launch these beverages in Indian flavours to differentiate itself from its
competitors.
Global Snacks and Condiments: Revenue in the Sauces and Condiments segment amounts to
US$4,951m in 2018. The market is expected to grow annually by 7.1 % (CAGR 2018-2021). In
relation to total population figures, per person revenues of US$3.66 are generated in 2018.The
average per capita consumption stands at 2.0kg in 2018.

13. Consistency Pratima Goyal
Completeness Priyesh Kannoth
Accuracy & Appropriateness Pranshu Chaudhary
Conciseness Raunak Bhajanka
Clarity Payal Bose
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