Company Outsider: ITC’s pivot to FMCG giant has been a strategic tour de force
Subscribe to enjoy similar stories. Company Outsider is a weekly newsletter by Sundeep Khanna. Subscribe to Mint's newsletters to get them directly in your email inbox. For a student of Indian business, ITC Ltd is one of the most fascinating companies to study.
It is difficult to think of another firm that has transitioned from its core business to completely unrelated ones as smoothly and seamlessly. Globally, there are few examples of such transitions. Apple moved from computers to consumer electronics, while Netflix shifted from DVD rentals to streaming services.
Financial services giant American Express started off in 1850, transporting valuable goods, stock certificates and currency before moving on to its current business of credit cards. But in all these cases, there were compelling underlying similarities. What’s more, barring Apple, none of the others pursued their various businesses simultaneously.
Not so with ITC. It has been nurturing the non-cigarettes businesses for more than 25 years and diversified into these with an eye on the future and not because of any immediate duress. Historically rooted in tobacco, it has been aggressively building its non-cigarette fast moving consumer goods (FMCG) business, particularly food, with notable purchases such as Sunrise Foods in 2020, and stakes in Meatigo and Prasuma in 2025.
Last week it was reported to be back on the acquisition trail, eyeing MTR Foods Pvt Ltd and Eastern Condiments Pvt Ltd for an eye-popping $1.4 billion. Both brands, owned by Norwegian company Orkla ASA, have dominant positions in Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, and will give ITC a stronghold in the southern markets. Clearly, the intent is to bolster its presence in foods.
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