The Tobacco industry comes under consumer staple group. It’s a non-commodity type industry.

Industry Strengths

Affordable pricng of goods with the availability of a vast variety at all price points
Well established distribution network
Strong and growing semi urban and rural markets
Ability to push cost increase to consumers for branded products
Availability of a good export market to the Middle East and Africa
Availability of raw material

Industry Weakness

Competition from unorganized and small sector which caters mainly to smaller regional and local markets
Impacted negatively by high inflation which results in increase in raw material prices
Impacted negatively by low monsoon which affects rural demand
Huge advertising budget required to maintain product visibility
High expenses on packaging and transport and impacted by high fuel cost
Government regulation in cigarettes and tobacco industry

Growth Drivers

Domestic economic growth leading to growth in economic activity and growth in income
Rise in disposable income
Growing wealth in semi urban and rural areas
Awareness of products and brands through media

ITC is engaged in the marketing of fast moving consumer goods (FMGC). ITC is one of the largest consumer companies in India with businesses spanning cigarettes, hotels, paper and agri-commodities. Its branded foods division with products such as staples, confectionery, noodle, snacks and biscuits is doing well and gaining strong market share across many categories. ITC has been successful in foods and constantly expanding its personal product portfolio (soaps, shampoos, deo, talc). Though the cigarettes division is still the major source of revenue, other businesses (agri, paper, hotel) have grown over the years. Recently ITC has entered the nicotine gum space with the launch of Kwiknic.

Segments and Products

The Company operates through four segments:

1.FMCG;
2.Hotels;
3.Paperboards, Paper and Packaging, and
4.Agri Business.

FMCG segment includes Cigarettes, such as cigarettes and cigars, and Others, such as branded packaged foods businesses (Staples, Snacks and Meals; Dairy and Beverages, and Confections) Apparel; Education and Stationery Products; Personal Care Products; Safety Matches, and Agarbattis.

Hotels segment includes Hoteliering.

Paperboards, Paper and Packaging segment includes paperboards; paper, including specialty paper, and packaging, including flexibles.

Agri Business segment includes Agri commodities, such as soya, spices, wheat, coffee and leaf tobacco.

Its brands include Aashirvaad, Sunfeast Dark Fantasy, Bingo!, Yumitos, YiPPee!, Candyman, GumOn, Classmate, Fiama Di Wills, Vivel, Superia, Engage, Wills Lifestyle, John Players, Mangaldeep and Aim, among others.