ITC enters freshly packed foods market with cookies, cakes, chapatis
What's the story
ITC Foods, the food division of ITC Limited and a leading player in the Indian FMCG sector, is making its debut in the fresh packaged foods segment. The company will now offer products like short shelf-life cookies, cakes, and chapatis, among others. This strategic move is part of ITC's broader plan to tap into the growing demand for quick commerce. Hemant Malik, CEO of ITC's food division, has confirmed this development.
Market shift
Addressing consumer demand for fresh packaged foods
The move also reflects ITC's strategy to cater to India's growing demand for convenience-led, freshly-made food with a shorter shelf life. Unlike other food products that have a shelf life of 12-24 months, these new offerings will only last a few days. Malik said there is an increasing consumer demand for fresh packaged food products due to improved accessibility and convenience offered by quick commerce platforms.
Brand expansion
ITC's brand expansion and distribution ecosystem
ITC has expanded its Sunfeast and Aashirvaad brands to include these new product categories. The company has also developed a hyper-local production and distribution ecosystem for next-day delivery from oven to doorstep. This is particularly important in India, where supply chains are often fragmented and 75% of sales happen through local kiranas.
Freshness assurance
Small-batch model and tech-enabled capabilities
The company has also introduced a small-batch model, which is being scaled across urban micro-markets. This will ensure product freshness while avoiding the usual challenges of long-haul logistics and warehouse storage. Malik said they are leveraging tech-enabled capabilities, supply chain efficiencies, including hyper-local agile production and rapid fulfillment, together with a focus on fresh sourcing to make this happen.
Market hurdles
Challenges in scaling quick commerce
However, analysts have warned that depending solely on quick commerce may not guarantee scale. The limited shelf life of these products could also necessitate larger retail channels, such as modern and general trade. Devangshu Dutta, founder of retail consulting firm Third Eyesight, said inventory management in terms of space for quick commerce would be challenging for these products, which need to move fast.