Companies

Value-added agri products to be new growth drivers for ITC

Shobha Roy/Abhishek Law Kolkata | Updated on December 15, 2019 Published on December 15, 2019

Demand seen rising from consumer and food services categories

Diversified conglomerate ITC Ltd expects good growth in its value-added agri-products business. Demand is seen rising across both consumer categories and food service categories and the company plans to expand its portfolio.

The company currently offers fruit pulp, tomato puree, ‘IPM Chilli’ and ‘IQF Prawns’ under its basic value-added products; while those like high curcumin, turmeric, blended spices, low sugar potato and organic pulp are offered under the attribute-based value-added category.

An attribute based offering refers to a product which focuses on a specific quality of the food item having low sugar or low glycemic index, and so on.

According to S Sivakumar, Group Head, Agri and IT Businesses, ITC, growth in terms of absolute number will be higher in case of the consumer business. But, the rate of growth is faster in the food services segment.

“Obviously, there will be more in the pipeline(and) there is plenty of space (in the value added segment). (We could add more products) as consumers tell us what they want and as we see more trends,” he told BusinessLine.

Value-added products offer the triple benefits of meeting the emerging demands of consumers, especially with regard to food safety and social consciousness; raising farmers’ incomes; and offer new drivers of growth for ITC. ITC Master Chef Super Safe Frozen Prawns, Super Safe Spices, Farmland brand of fresh fruits and vegetables with differentiated product functionalities, organic and fair-trade certified fruit pulps are some offerings.

Region-specific flavours

Sivakumar said region specific flavours could be added too. Some offerings are in the product development stage; or they are undergoing various levels of R&D to make them ‘shelf-stable’ and ‘taste stable’.

“At this time our focus is on market development of these products among domestic consumers and also the food service ones. As these categories expand, they become larger in the portfolio of our businesses,” he said.

According to Sivakumar, there’s a rising demand for differentiated needs where customers prefer one variety over another. For instance, a food service like a bakery houses may require a particular wheat type over another. In such cases, ITC prefer attribute-based selling.

For instance, in potatoes differentiated offerings like low sugar or high antioxidant ones are in demand apart from the ‘regular ones’ like table and processed varieties.

“Value-added agri products are emerging categories that are small in demand. But, they are riding on the early part of the trend of safety and social consciousness. Therefore, as that wave expands it becomes potentially a much larger business opportunity for ITC,” he pointed out.

A large part of the ‘value’ in these value-added offerings comes from the farms, that include how the crop is grown. “One has to work with farmers closely and also increase farmer capacity significantly unlike producing normal commodities,” he said.

Published on December 15, 2019
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