ITC Foods is making a bold and strategic entry into the fresh packaged foods segment, aiming to capitalize on the burgeoning demand in India's quick commerce (q-commerce) market. This fresh pack foray includes products such as short shelf-life cookies, cakes, and chapatis, reflecting the company’s intent to meet evolving consumer preferences for convenience and freshness.
Fresh Pack Market Entry and Growth Strategy
ITC Foods is leveraging the fast-growing q-commerce trend, underpinned by platforms like Blinkit, Swiggy Instamart, and Zepto, which enable ultra-fast delivery of fresh food products within hours.
The company plans to position its offerings through iconic brands like Sunfeast and Aashirvaad, extending their reach into fresh baked goods and ready-to-eat staples.
To deliver freshness, ITC has developed a hyper-local production and distribution ecosystem designed for next-day delivery, minimizing reliance on long-haul logistics and large warehousing.
Small-batch production units will be deployed across urban micro-markets to maintain quality and freshness, crucial for products with shelf lives of only a few days.
Consumer Trends and Market Dynamics
Consumers increasingly demand convenience-led solutions without compromising on product freshness, fueling growth in the q-commerce sector.
Shorter shelf-life items challenge traditional FMCG models that typically handle longer shelf-life products spanning 12-24 months.
The quick commerce segment offers agility, but also demands careful inventory and supply chain management to avoid stockouts or wastage.
Operational and Logistical Advantages
ITC’s tech-enabled supply chain emphasizes rapid fulfilment and fresh sourcing to address supply chain fragmentation common in India.
Leveraging local bakeries and manufacturing units helps the company reduce delivery times and enhance customer satisfaction.
Investments in cold chain infrastructure and quality controls are underway to maintain product integrity.
Challenges and Industry Insights
Industry experts note that q-commerce alone may not provide the scale required for significant market penetration; modern trade and general trade channels will also be essential.
Inventory management and shelf space allocation pose challenges in quick commerce due to the need for fast turnover.
Success will hinge on balancing urban market penetration with cost-effective distribution strategies.
Financial Performance and Outlook
ITC Foods reported gross sales of Rs 18,270 crore in FY25, registering a 6% year-on-year growth, driven by expanding product categories and distribution channels.
The move into fresh packed foods is expected to contribute meaningfully to revenue growth and margin expansion over time as the market matures.
Competitive Landscape
Several direct-to-consumer and local bakery brands have already tapped the q-commerce wave, competing on freshness and speed.
ITC’s scale, brand equity, and supply chain capabilities provide a competitive advantage in gaining market share.
Conclusion
By entering the fresh packaged foods segment with a focus on quick commerce, ITC Foods aims to capture a growing segment of India’s dynamic FMCG market that prioritizes freshness, convenience, and speed. The company’s innovative supply chain model and strategic brand extensions position it strongly for sustained growth in this fast-emerging space.
Source: Economic Times, ET Now, Moneycontrol
