@ITCCorpCom – FMCG to hotel conglomerate, has shown this amazing feat of entering into markets / categories with strong brand having a monopoly / oligopoly & end up penetrating well into this – more in the thread below (1/22) @dmuthuk #ITC
Atta: HUL’s Annapurna was the 1st entrant into branded Atta space way back in 1998, which otherwise was a large unorganized space. General Mills followed by launching Pillsbury, both together owned nearly 100% of the organized market which was growing (2/22)
at high double digits. Then came ITC’s #Aashirvaad that changed the game of the industry. ITC took a lion’s share from the incumbent players – by 2010, Pillsburry got sidelined & Annapurna was struggling to gain share back. (3/22)
HUL did a re-launch of Annapurna with a new packaging but failed again & by 2016 appointed I-bankers to exit out of the category. ITC currently has about 6 different variants of Aashirvaad & ~30% of branded Atta market in India which valued at about 16,000 Cr INR. (4/22)
Instant Noodles:Nestle literally ruled instant noodle mkt for years - since its launch in India in 1982, #Maggi had become a synonym for noodles across households & age groups – it was hard to even think of launching a brand to compete against Maggi back then (5/22)
While Maggi faced some competition from contemporary brands in late 90’s, by early 2000s it grabbed back its lost share! ITC came in with #Yippee at a time when Maggi had over 90% market share. (6/22)
While the share gain by Yippee was slow & steady, the controversy & ban of Maggi in 2015 helped ITC fast track this. Currently Yippee is the 2nd largest player with nearly 25% share & growing! Interestingly, surveys had shown (7/22)
a much higher share for Yippee in the younger population i.e. kids below 15 years of age – probably suggesting a sharper increase in their share with these kids becoming youth / independent consumers. (8/22)
Chips: Packaged snacks / Potato chips was a market dominated by Pepsico [Frito Lay] with over 80% share who was also the first entrant into branded packaged snacks, since 1995. ITC entered the market in 2005, (9/22)
when the market was a near monopoly by Pepsico [Lays, Uncle Chips, Ruffles etc] and P&G (with premium Pringles). Fast forward 2018, ITC has about 16% share in overall packages snacks [roughly 23,000 Cr) and around 27% share in what is called as (10/22)
bridge” or finger snacks [Kurkure vs Bingo Mad Angles / Tedhe Medhe] and about 8% in potato chips [which is a crowded space with multiple local players like Balaji, Haldirams et al.]. Last 8 quarters, ITC has been consistently gaining share in this space. (11/22)
Biscuits: ITC entered biscuits space with Sunfeast brand in 2003, infact it was a very synergistic play for ITC with their already existing presence in the Atta [wheat] space, as Atta is the main input for biscuits. (12/22)
However, it was quite a late entry, when incumbent players Britannia and Parle together had over 85% share in the market followed by other smaller players at 15%. Both had a strong legacy & brand equity in customer minds & was not an easy task to break into that space. (13/22)
While the market was competitive back then, there wasn’t any ground-breaking product innovation, but ITC’s entry in 2003 changed the nature of the game! ITC clearly saw the lack of innovation in this space & chose it to be its biggest point of attack.(14/22)
Sunfeast launched six variants to start with along the existing favorite categories like Glucose, Marie, Bourbon et al. but also launched its own innovative flavors like Orange-flavored Marie, Marie light & butterscotch-flavored cream biscuits.(15/22)
In an industry that dint see any new launch from 2000-2005, there was a flurry of launches by both Parle and Britannia post Sunfeast launch.(16/22)
Quoting an analyst in 2005 “The biscuits industry had not witnessed any major product innovation in years. Consumers were just waiting for something new, something fresh, when Sunfeast happened” (17/22)
ITC not only brought innovation in products, but also in its campaign – biscuits never had a celebrity endorsement till SRK endorsed Sunfeast in 2006. By 2006, ITC had 6% share in the market. (18/22)
Fast fwd 2018 ITC dominates the cream biscuits mkt with roughly 25% share & about 12% in the overall business market which is roughly 35,000 Cr in India. This does not include any international market sales / share. (19/22)
Dettol was roughly 800 Cr brand in 2015, when Savlon was ~65 Cr. ITC did not want to limit itself to antiseptic market, but planned to extend Savlon to hand wash & later to hand sanitizer segment, which was a near oligopoly, between Dettol & HUL’s #Lifebuoy .(21/22)
It has been one of the toughest category to crack for ITC – Savlon still stands at <20% market share in overall anti-septic market, a distant second to Dettol. And a third player in hand hygiene market behind Dettol & Lifebuoy. (22/22)
