Coronavirus: ITC's Sanjiv Puri lines up Rs 150 crore contingency fund

Cigarettes to hotels major, ITC Ltd has come up with a Rs. 150 crore contingency fund to address the exigency arising out of the coronavirus (Covid-19) outbreak in the country.

According to the company’s chairman and managing director, Sanjiv Puri, this fund will be utilised primarily to provide relief to the vulnerable and most needy sections of society who are impacted by the pandemic and are facing significant disruption in their livelihoods.

Additionally, ITC will also also collaborate with district authorities to provide assistance to the district health and rural healthcare eco-system that reaches out to the weakest sections of society.

The resources under this fund will be channelised towards the protection and well-being of people involved directly to reach medicines, groceries, other essential goods including sourcing of agri-commodities by providing protective personal gear and hygiene products.

The company is of the view that under the prevalent situation in the country owing to the contagion, it is critical to ensure adequate availability of essential food and hygiene products.

“We are working with state authorities and local administration to ensure that manufacturing and distribution activities continue uninterrupted with bare minimum people. While we practice restraint and social isolation as a group, we will continue to ensure the safety and well-being of our employees, workforce and value chain partners”, an ITC spokesperson said.

ITC has already rolled out a slew of measures towards safety and wellbeing of its employees, including providing IT infrastructure and connectivity to enable them to work from home and maintain the highest standards of hygiene while promoting social distancing.

In a notice to the BSE, ITC said that owing to the spread of COVID-19 and the directives received from the central and state governments as well as local bodies, the company’s factories manufacturing essential items like atta, noodles, biscuits, snacks, soaps, sanitisers and others are operating partially with limited workforce.

“Apart from the factories manufacturing essential items, the company has suspended operations at its factories and plant locations”, the notice said.

ITC eyes over 10% growth from chocolates after launch at grocery stores

Having come up with a premium variant of its chocolate, Fabelle, which is now available in both modern trade and across grocery stores, ITC Ltd is eyeing a growth of more than 10 per cent, surpassing the industry average in this segment, over the next 2-3 years.

“The chocolate category has been growing more than 10 per cent in recent years and we expect to grow significantly faster than the category over the next few years,” Anuj Rustagi, chief operating officer of chocolates, coffee and new categories at ITC's food division, told Business Standard.

The company took a call to come up with the premium variant of Fabelle to reach out to a niche consumer base that will help improve its sales volume. The chocolates, priced between Rs 70 and 170, compete directly with Silk from the Mondelez stable and belong to a category that has been growing faster than the overall chocolate industry.

After launching the brand in 2016, ITC had decided to first come up with a luxury range for consumers at its hotels and boutiques. Thereafter, it took a call to launch bar variants at premium price points.

The premium variant of Fabelle is available in top chocolate selling outlets in six metros, namely, Mumbai, Delhi, Kolkata, Hyderabad, Bengaluru and Chennai.

“We launched the Fabelle FMCG chocolates range in Bengaluru in October 2018 and have further expanded distribution Delhi, Mumbai, Kolkata, Chennai and Hyderabad this year.

The range is available in large outlets, including modern trade and premium grocery stores. We will continue to expand distribution in the near future and extend our presence to other relevant consumer touch points,” Rustagi told Business Standard.

The chocolate range consists of two product formats – soft centres, which is a range of centre-filled chocolate bars and the chocolate deck which is a range of multi-layered chocolate bars.

Rustagi said these chocolates bring alive a unique dessert-like experience in the form of chocolate bars, giving consumers an indulgent sweet-tooth experience.

Besides, after claiming to have received positive consumer response on its luxury range that was launched in its chocolate boutiques, ITC has also started retailing luxury chocolate bars across the premium modern trade outlets in the above six metros. This range includes eight dessert-inspired chocolate bars priced between Rs 350 and Rs 495.

ITC is also strengthening its assorted chocolates, which are typically meant for gifting on special occasions like Diwali.

According to the company, chocolate gifting during the Diwali season is increasingly becoming popular and it has introduced a specially curated range of offerings suitable for the festive season.

The Fabelle Gift Bouquets, meant for festive gifting, is priced between Rs 2,450 and Rs 13,750 and will be sold exclusively from the chocolate boutiques. This bouquet is an assortment of luxury chocolates like Elements, Dessert Collection and Gianduja.

“We have also introduced special assorted gift boxes at various price points – The Bars Quartet at Rs 1,450, the Bars Trilogy at Rs 1,100 and the Bars Treasury at Rs 350,” Rustagi told Business Standard.

The quartet is an assortment of four luxury chocolate bars, while the trilogy is an assortment of three bars and the Treasury is an assortment of four bars from the FMCG range.

ITC launched Fabelle in 2016

Introduced FMCG bars to kirana stores in 2019

ITC has eight boutiques in its hotels for Fabelle luxury range

ITC has also launched a chocolate making programme - Fabelle Société de Chocolat – for budding chocolate enthusiasts

ITC is considering a bid to buy a stake in Coffee Day Enterprises: Report

ITC Ltd. is considering a bid to buy a stake in Coffee Day Enterprises Ltd. as the nation’s biggest cigarette maker seeks to diversify its businesses, according to people familiar with the matter.

The maker of Classic and Gold Flake cigarettes has been given access to Coffee Day’s assets and financial for due diligence, said the people, who asked not to be identified as the discussions are private. ITC could be vying with Coca-Cola Co., which has evaluated India’s biggest cafe chain but hasn’t made a formal offer, said one of the people.

Shares of ITC fell as much as 2.2 per cent in afternoon trading in Mumbai, while Coffee Day rose 5 per cent, extending its three-day winning streak to almost 16 per cent.

A successful bid will help ITC further diversify its business to reduce dependence on cigarettes as India raises taxes on tobacco and restricts smoking in public places. Coffee Day is under pressure to pare borrowings after its founder V.G. Siddhartha took his own life as debt strains began to emerge in his companies.

Deliberations are at preliminary stage and may not lead to a formal offer, according to the people. ITC received an inquiry from an intermediary on Coffee Day and there has been no progress, its spokesman said in response to Bloomberg query. Coffee Day declined to comment.

Coffee Day has about 1,700 outlets, ten times more than what Starbucks Corp. runs in the world’s second most populated country, according to the National Restaurant Association of India. A unit of private equity firm KKR & Co. owns 6.07 per cent of the company. Standard Chartered Private Equity holds 5.7%, while Nandan Nilekani, co-founder of Infosys Ltd., has a 2.69 per cent stake.