The Dark Horse of Diversification for ITC

A glimpse on how Savlon is set to become a 1000 crore brand for the cigarette giant

ITC, the cigarette-FMCG-hospitality conglomerate, announced last week that it expects Savlon to cross Rs 1,000 crore sales this fiscal year as the company has logged 400% growth over 2019-20, riding on heightened demand owing to the Covid-19 pandemic. This will mean that Savlon will become a leading brand in health and hygiene space & first brand of ITC in personal care space to cross the 1000 crore mark overtaking Vivel which saw consumer sales of 500 crore in the last fiscal year. But is Covid-19 the real reason of this fourfold growth? Why aren’t other brands or companies expecting the growth at such levels in the times when health and hygiene has become the hottest topic?

According to Technavio, the Indian sanitiser market alone saw a growth of 651.28% in 2020.  ITC couldn’t let it go if it really has the aspirations of taking over RB’s Dettol and HUL’s Lifebuoy! In a world full of chaos and panic buying, when store shelves were wiped-off of all the sanitisers and disinfectants, ITC decided to ramp up production of Savlon almost 300 times! The company didn’t shy away to even convert some of its existing facilities like its perfume factory in Himachal Pradesh to churn out Savlon-branded products, to cater to the additional demand. 6 new sites were opened for manufacturing & multiple partners were roped in.

But that was not all! ITC coupled this extensive capacity expansion with innovation and went on to launch 9 new variants under Savlon, since April 2020. Providing a comprehensive solution in market, Savlon presented an extended portfolio for customers to pick whatever fitted their lifestyle. Disinfectant spray, mask, cloth spray, wipe, soap and body wash are some of the leading innovations that contributed to distribution and product portfolio expansion of Savlon during the pandemic.

Interestingly, Savlon was just a 50-crore consumer sales brand before it was acquired by ITC in 2015. ITC had targeted the acquisition to pose a threat to RB’s then 300 crore brand Dettol, which was (& still is!) a 22-year old iconic brand in India. Though ITC did not have a plan on stages of evolution & specifics for Savlon back in 2015, the personal care brand grew at a 5-year CAGR of 50% year-on-year! Now that Savlon and its variants are selling more in a month now than it was selling in a full year earlier, we can safely say that ITC did a pretty good job, Eh!

Switching back to our main question if pandemic is the only success secret of Savlon – Well, we see that a good recipe for success contains the right mix of innovation, distribution network, & of course, creativity! Wait a minute – Isn’t that the holy grail for any conglomerate?

Well, if it were so, then the market share of the top three sanitizer brands — Dettol from Reckitt Benckiser India Ltd., Lifebuoy from Hindustan Unilever Ltd. and Pure Hands by Himalaya Drug Company Pvt. Ltd. — wouldn’t have fallen to 39 percent in March from 85 percent in January and February! Such a bummer, right?

Well, as marketers, it is important for us to understand that environmental factors are just one part of the complex cycle of the opportunities that any brand come across. The way a brand decides to tap these opportunities ultimately defines the results. Agile and strategic decisions taken at the right time with a long-term vision is what differentiates brands from the crowd when environmental factors are common for the entire brand universe. And ITC, the case in point, seems to have decoded this cryptex!

No wonder ITC is the second-largest snack maker, largest branded Atta company as well as the third-largest biscuit maker in the country!

If you liked reading this post then please do subscribe and don’t forget to share with your dear ones. Until next MarkMonday, Sayonara my young marketers!

By: Anmol Gupta | Isha Garg