Good morning, everyone. On behalf of Team ITC, let me extend a warm welcome to this exclusive event, ITC Institutional Investors and Financial Analysts Day 2021. We have an exciting lineup of presentations for you today. We begin with a presentation by our Chairman and Managing Director, Mr. Sanjiv Puri, on ITC Next Strategy. Then we have three business presentations by Mr. Sandeep Kaul, Divisional Chief Executive for the Cigarettes business, by Mr. Hemant Malik for the Branded Packaged Foods business, followed by a break for 45 minutes. We then resume with a presentation by Mr. Sameer Satpathy, Divisional Chief Executive of the Personal Care business. Thereafter, we have brief presentations in two areas that run horizontally across all our businesses and have emerged as defining trends in the new normal: one on digital powering the ITC Next Strategy by Mr. B. Sumant.
Executive Director, and last but not least, Sustainability 2.0 presentation by Mr. Nazeeb Arif, Executive Vice President and Head of Corporate Communications. It is recommended that for the best experience, the presentations be seen on full-screen mode. Before we kick off on the agenda before us, a few admin details. We've reserved about 15 minutes to an hour at the end for the Q&A session. You would have noticed an icon on the right side of your screen for questions. Please use this to post questions on the chat box. The chat box is already open now, and we will take questions until the end of the sustainability presentation. If you're in full-screen mode, you would need to exit that briefly to post your questions to access the chat box.
After the presentations are done, we will take a very short five- to 10-minute break and reassemble for the Q&A session, where Chairman and Managing Director, Mr. Puri, will be joined by Mr. Rajiv Tandon, Executive Director, and Mr. Supratim Dutta, Chief Financial Officer. Please note that if you do wish to use another device, you would firstly need to log off the device you're using and use the same credentials again to log on to the other device. We will appreciate your refraining from sharing any content from today's presentations on social media till the conclusion of the event. The presentations being made today will be available on the stock exchanges as well as the company's website. Without further ado, may I now invite and request Chairman and Managing Director, Mr. Puri, to take over for the first presentation.
Good morning, ladies and gentlemen. I just want to do a quick check. I hope I'm audible. Okay. All right. May I, at the outset, first welcome all of you to the investor meet today, and I thank you for being here and participating in this event. In the next 60 minutes, I'm going to cover an overview of the ITC Next Strategy. Following that, in certain specific business segments, some of my colleagues will, of course, detail out some facets a little more. There isn't time to cover every facet today. Hopefully, we will have another occasion to cover the pieces that we may not be able to cover today, given the duration of this event. You're all familiar with our portfolio, which spans agriculture, manufacturing, and services. There are essentially four segments.
The largest is FMCG, which also includes our traditional business of cigarettes, where we are the market leaders. We are also a leader in the agribusiness segment. We're also the leader in paperboards and packaging, and the second largest chain in hotels, but a leader in green hoteliering. Over the last two decades, we have been investing on multiple drivers of growth, and I've tried to, and I have created newer businesses where we are leaders already, and over the last two decades, our top line in the non-cigarette businesses has gone up by 20x. Bottom line has lagged at 18x, essentially because a large component of the growth also comes from the newer FMCG businesses, which are being built. Of course, they are seeing improved margin trajectory, so we do hope going forward that the equation will be different.
As I said, we are already leaders in our older businesses, be it cigarettes, agri, paper, and hotels, not only merely from size, but also from a profitability perspective. Of course, there is an angle of capital productivity on hotels, which I will address going forward. In the FMCG other businesses, we have made appreciable progress. We are already the second largest player in the industry. We're also an exemplar in Triple Bottom Line, exemplar in sustainability. We're carbon positive, the only company in the world to also be water positive and solid waste recycling positive for 16, 19, and 14 years in a row. Our value chain supports 6 million livelihoods. The e-Choupal empowers 4 million farmers. 41% of our total energy is from renewable sources. We are a trailblazer in green hoteliering. We have a large bank of platinum-rated green buildings.
In fact, the world's first green data center, LEED platinum-rated, is the ITC Sankhya at Bengaluru. Some more recent accolades for the ITC PSPD Kovai unit. This is important because India is a water-stressed country. It's the first factory in India and second in the world to receive the platinum certificate for AWS, which is Alliance for Water Stewardship. ITC Windsor has become the first hotel in the world with LEED Zero Carbon certification. ITC Chola is the largest hotel and commercial building in the world to achieve the same distinction. We have top-notch ESG credentials, a double-A rating by MSCI ESG, much ahead of global tobacco. We are part of the Dow Jones Sustainability Index, an A-minus rating by CDP, but a leader as far as climate change is concerned against a global average of B, and similarly in water security.
We have received global recognition for our work in sustainability. We have set exemplary governance standards. Last year, we were recognized as the best-governed company by the Institute of Company Secretaries. In 2017, we were recognized with the Porter Prize for Excellence in Corporate Governance and Integration. We've consistently been in the top league in terms of PBT and PAT. The last year, one rank reduction may also be attributed to the impact that some of our businesses had on account of the disruptions. We are amongst the top three contributors to the Exchequer over the last 10 years. Our cumulative value add is INR 4.1 lakh crores, out of which 71% has accrued to the Exchequer, and 23% has gone to the providers of capital and 5% to employees. India certainly offers a very compelling growth story, and I'm sure all of you are already familiar with it.
But a quick recap: we are going to be the fastest-growing economy this year, and the expectation is next year will be the same. Our demographics are very favorable. We are a relatively young country. Even in 2050, it's going to be a reasonably good situation. And with the growth of the GDP, will come prosperity, which will impact consumption. And there's huge headroom for consumption growth in India. India is a consumption-driven economy. In FMCG, particularly, the per-capita consumptions, the penetration levels are significantly lower. And the box at the bottom gives you the comparison with some other countries, and that really depicts the kind of potential that exists. And of course, there are an array of reforms by the government that are going to strengthen the growth momentum. Some significant ones to call out are Gati Shakti.
It is also the interventions in digital, the PLI scheme, the reform in the financial sector. All these are going to lend additional strength to the economy over time. Let me now move on to our corporate strategies. We have a strategy. We have six pillars of our strategy. The first is our commitment to create multiple drivers of growth by marrying the market opportunities with our enterprise strength, really saying we will go in spaces where we have a right to win, and we recognize that digital and sustainability, in the same context, are going to be mega trends of the decade, so we are actively exploring and developing opportunities in these spaces where we have a right to play, given our enterprise strengths, and I will allude to some of this as we go forward.
Our growth is going to be supported broadly by five corporate strategies, besides the business-specific strategies, which we'll cover a little later. Innovation is a theme that will run right across. Cost optimization, looking at the entire value chain with rigor, is another theme that will run right across. Sustainability 2.0 captures our ambition that is bolder. Given the global challenges, we have raised the bar. Digital, as I said, is a mega trend. So our aspiration is to be a future tech enterprise, and we will talk about what that means for us. And the most important facet of our strategy is really creating the world-class talent, the most valuable resource that is going to drive the enterprise. We create multiple drivers of growth, leveraging institutional strengths so that we move to the market with some moats and a right to win.
A good example just to illustrate this is foods, where the strength in agribusiness, the strength in cuisine from hotels, the strengths of distribution, the strengths of research and development, among others, comes together and provides a strong platform for us to succeed in foods. Now, to manage such diversity, there needs to be an appropriate strategy of organization that will enable focus on each business, which is at a divisional level. Each division has a chief executive assisted by a team as part of the executive management committee. The CMC, the Corporate Management Committee, takes the role of strategic management, sets the goals, the agendas, mentors the businesses, looks at succession planning, allocates resources from a venture capitalist kind of mindset.
This structure enables each business to have undiluted focus in its segments, while the Corporate Management Committee plays the role of resource allocation, mentorship, developing talent, and also enabling it and providing resources for each business to actualize its potential. And of course, the Board of Directors provides the strategic supervision to the company as a whole. Every enterprise, no matter how large or complex it is, needs to continue to remain nimble and consumer-centric for continued success. And therefore, in businesses that have grown large, we have set up empowered teams, and these are cross-functional teams around product-market clusters. And they have end-to-end responsibility of delivering performance for that product-market cluster. And they're completely empowered and enabled by our governance strategy and the common resources that ITC as an institution provides. R&D, as I said, is a very important vector to power our growth.
ITC Life Sciences and Technology Centre at Bengaluru is actually being rated as the top innovator in the private sector in India. It has, in fact, got the second highest number of patents after the number one government institution. And we have a team of highly engaged and qualified scientists, 350 of them. We have global partnerships and collaborations. And we have the requisite infrastructure in terms of labs, pilot plants, process development, technologies available for us to be able to further this area. Now, the pandemic has taught us that speed is something that was unimagined in the past. The speed at which all of us, many companies, and I will give you an ITC example itself, the speed at which we've innovated and brought products to the market is unparalleled. It has never happened before. So the paradigm has changed.
And we were able to participate in that and launch products very quickly into the market because in the recent past, we have invested around a few platforms that we believe are important to build our brands and build our products over time. And these are based on analysis of emerging trends. And these platforms enable agile and purposeful innovation. Speed-to-market crashes. That's why, for example, Savlon has so many things in its portfolio just in the pandemic year as an example. And my colleagues will talk more about it. But this is a very important investment, and we will continue to do so. And I do believe that this is already yielding very good results. And I will allude to some examples as we go forward. We've raised the bar on Sustainability 2.0.
For example, and I'm just going to give you a couple of examples because my colleague Nazeeb is going to have a more detailed presentation later. Although we are water positive, we have raised the bar given the societal challenges, and we have said that by 2030, we will provide the society 5x of our net water consumption. Climate-smart agriculture has been progressed so far in 2.5 lakh acres. We are committing to take it to 3 million acres by 2030. These are just some examples. Nazeeb will give you the complete picture on the targets and ambitions we have set, and the broad areas of our interventions will be along the lines of building green infrastructure, decarbonization, nature-based solutions, circularity, adaptation and resilience, and creating inclusive value chains. Our value chain supports 6 million lives. Aspiration is to take it to 10 million lives by 2030.
We want to be a dynamic future tech enterprise, as I said earlier. This means transformation across the entire value chain, right from marketing, operations, e-commerce, employee experience, supply chain, and it also calls for transformation of the business model, and a very important enabler of that, it's about the skills, the culture, and the way we work. All that will have to transform over a period of time. We recognize that we have started the journey at a very accelerated pace, and there are an array of initiatives, which my colleague Sumant will cover later. I've just called a few of them, like DigiNext and Young Digital Innovators Lab, to provide the thought leadership and ideation for more and more interventions in the future. We have Sixth Sense, Customer Data Hub, Industry 4.0 Center of Excellence, the Digital and Analytics Center of Excellence, Connected Ecosystem.
And we are also starting our journey in D2C and platforms. So this is an area which is receiving an immense amount of attention. And it's being looked at in an integrated fashion across the entire value chain. And we will see a lot of investments in this as we go forward. A lot has already been achieved. And my colleagues will give you examples as we go forward. Though there are some examples here, I'm not going to get into it because it will be covered later. I also spoke about cost management. And we are looking at cost management end-to-end. The entire value chain is being evaluated with rigor to take out cost from each element where we can take out cost by either removing it, reducing it, or re-engineering it.
We have a comprehensive framework which all our businesses utilize, right from imports, how do we buy agri produce. We have algorithms like Astra that help us optimize buying. How do we deal with media mix efficiency? How do we deal with optimization of supply chain? How do we optimize our manufacturing? How do we baseline our overheads and start with zero budgeting? So there's a comprehensive framework which is used across the company and helps us drive down cost year on year. Talent is the most important resource for any enterprise's success. And we are proud of the talent that we have got. We've got an extremely aligned, engaged, and committed talent, which comes in from the best institutes in the country.
Just to call out a few data points, in our surveys, 96% of employees say they clearly see a linkage between what they are doing and ITC's goals. 95% of employees feel proud to be part of ITC. We crowdsource ideas, create forums for employee ideation, and we have got now 2,100-plus ideas, very interesting ideas for either process improvements or new business opportunities. Our leadership attrition is just 1%. 75% of our leaders are from within. That's a testimony to the robustness of our talent development processes, and of course, we want the best person for each assignment, each leadership position, so where required, we also hire the best-in-class talent from industry, and that's how 25% of people in the leadership team are actually from outside the industry. We have a high-performance culture. It starts with building contemporary capabilities.
These days, for example, there's a lot of focus on digital. There is a prominent culture that we have created in the organization with a challenger mindset, with a mindset of creating newer business opportunities. And this culture is also created by the opportunities that our talent gets in building businesses from scratch. Compensation is benchmarked to industry. It is directly linked, both short and long term, with business deliverables. And in our case, of course, the variable component of the compensation is it would be higher than what is normally seen in the industry. Let me now, from here, move on to the business segments. There are some segments, which I said, which will be covered a little later. So I will give you an overview. And some segments we will not be able to do today, but hopefully, we'll have another occasion to talk about.
What is interesting is that India's pattern of tobacco consumption is unique. Globally, cigarettes is the dominant form. In India, it comes in many formats, like bidis, by chewing tobacco, zarda, and so on and so forth. At an aggregate level, if you look at the per capita tobacco consumption, we are 60% of the world average. But when we look at it for cigarettes, it's only 11%. So India accounts for less than 2% of the global consumption of cigarettes, while we have 18% of the population. That is because we have the lowest per capita consumption in the world. And that is why the cigarettes, which actually form a very small component of the total basket of tobacco consumption, it is just 8%. 92% is in other forms or in the form of illicit cigarettes.
This 8% contributes to a four-fifths of the revenues from the tobacco sector. This indicates the fact that this is disproportionately, or it experiences what we call discriminatory taxation. In comparison to the world, the tax on a per capita GDP on purchasing price parity actually is very high in India as compared to even the developing economy. That is what is leading to a very large illicit trade revenue loss to the exchequer and adverse impact on the farmers. What we do require is an equitable, pragmatic, reasonable taxation policy that does not create more unintended consequences like illicit going up or shifts to other forms. Now, this data is just to illustrate the impact that taxation has on the performance of the revenue collections. Now, in a period where taxation went up by a category of 15.7%, the revenue actually went up by 4.7% only.
In a period when there was stability, which is the right box, revenues actually went up by 10%. And this is simply because in periods of stability, the legal industry is able to claw back from illicit because as people progress, as people get economically empowered, and we find that people go back to buying trusted brands, so there is a clawback. And there is also some interplay within other segments. And given that cigarettes is only 8%, the rest is 92%, a small fraction of interplay itself can bring in, provide some headroom for growth in this sector. That's what explains this kind of behavior in the industry. As I said earlier, we are the market leader. We have great brands. We have world-class products, processes, state-of-the-art technology. We have unmatched distribution capability, best-in-class profitability, and returns globally despite the adverse regulatory environment.
Given this context, what are the imperatives for this business? Now, as I said, cigarettes is only 8% of the basket of tobacco consumption. Therefore, the first task for us is to maximize the potential of the cigarette industry within the tobacco basket. A small shift itself is a significant percentage for this industry. And we need to counter illicit. We need to reinforce our market standing, our market leadership. These are the objectives. And how do we do it? There are broadly four pillars of our strategy. My colleague Sandeep is going to exemplify it in more detail. But broadly, it starts with our portfolio, starts with our powerful trademarks, which have been built painstakingly for decades with unmatched quality, unmatched products. And the endeavor is to offer, actually not offer, to create offers, and I'm emphasizing S for every viable segment.
It's like looking at the market as an aggregation of niches, so for every viable segment, we must have offers, and we must have offers that are distinctive, that have distinctive features that create a reason, create a point of difference for a consumer to stay with that rather than to opt for something like an illicit or some other category. That's why we continuously invest to build our portfolio and to premiumize our portfolio, take our premium portfolio far and wide into the country, and to enable that, we need a powerful innovation engine. We need an innovation engine that can do things at scale, that can do things at speed, and our deep category insights across seed-to-smoke value chain have helped us create many distinctive vectors of differentiation. We have got proprietary models, proprietary tools across the seed-to-smoke value chain.
The third lever is to be able to capture value across the entire Seed-to-Smoke value chain. Given our expertise in the entire value chain, the investments we have made to build distinctive capabilities, for example, we are just amongst the very few or probably the two in the world that can make our own filters and capsules end-to-end, helping us to save a lot of cost. So these distinctive capabilities help us make in India, maximize value capture in-house. And of course, we continue to contemporize this knowledge, contemporize this value chain with the latest digital technologies. And the fourth piece is about our ability to execute, to be able to make products of unmatched quality, given the process technology, the process expertise we have, and state-of-the-art technologies, and the capacity to execute in a differentiated fashion at the last mile.
These are the pieces that we relentlessly pursue to achieve the three objectives that I spoke about. Sandeep is going to expand on this when he comes in a little later. Let me move on to FMCG Others, which is our newest business. This business has got four segments, branded packaged foods being the largest. Then we've got personal care products, education and stationery, matches, and agarbatti. Over the years, we have built 25 mother brands. We are probably the largest incubator of world-class Indian brands. They encompass a consumer spend as of last year of INR 22,000 crores. Estimates are that we have created these brands very efficiently at 1.7 times the top line. As against, if we had gone the inorganic route, it would have costed us four to five times the top lines. The growth has been fairly efficient.
We are already the second largest player in the FMCG segments from a size perspective. Our aspiration, when we went in also, was to create an FMCG business at scale because we wanted to create an economic engine at scale to create a value which can materially impact ITC and its stakeholders. A quick look at the trends that guide all our thought and actions in this business. There is very clearly a move towards trusted brands, a move from unbranded to branded, health, wellness, hygiene. It's certainly heightened post the pandemic, but yet there is a need for indulgence. There's a need for home conveniences. There's a need for on-the-go solutions. Natural, organic is getting more and more popular, and there is greater interest after the pandemic. Digital is a powerful trend.
Given the startups and the unicorns that are coming in, the route to markets are transforming, or I would say even getting disrupted. So these are some of the key trends that guide our strategies. Now, there are a number of strategy pillars we have, but what I'm going to focus on is the thrust on ITC Next. And let me also say at this point that ITC Next is about building on the success of what we have achieved so far, bringing in newer vectors, identifying newer vectors of growth, dealing with certain challenges that we may have faced in the past, whether they are internal or external. And this is the philosophy of ITC Next across all our businesses. So with respect to FMCG, there are seven areas that I would like to call out. One is that it's about revitalizing the portfolio and managing it actively.
Second, we are recognizing inorganic. We have bulk of what we have done has been built organically. So we now want to bring in inorganic as a significant vector of growth, given that we understand this space with our experience in this over two decades. We understand this space well. Exports is being accelerated. I think the PLI is going to give further impetus, and my colleague Hemant will speak about it. We are actively exploring opportunities in the proximate markets. Our R&D platforms have enhanced our speed to market. Given the disruptions and transformations in the distribution channels, we are also developing our own newer routes to market while we continue to collaborate, and we will continue to collaborate and work with the entire ecosystem and our partners. Simultaneously, we are strengthening reach. The ICMLs provide structural advantages. Interventions are being made to fortify that.
And digital, as I've been saying many times during this presentation, is a very important mega trend. And therefore, in this business also, it receives a lot of investments. Let me first start with the portfolio. Sorry, I'm going to go back because, okay. Okay. So there are three pieces to our portfolio strategy. One is to fortify the core, which are our large brands like Aashirvaad, Sunfeast, Bingo, Classmate, YiPPee!, Savlon, Mangaldeep, and fortify, scale them up, and use these mega brands to straddle value-added adjacencies. A good example is Aashirvaad. Besides being in value-added atta, like Multigrain Select and then Sugar Controlled Release and gluten-free, it has also got an organic range, not only in atta but also in pulses. It has got vermicelli. It's also into salt and spices.
The strong Aashirvaad trademark is being created as a strong center-of-plate brand that will straddle many spaces in the staple segment. We also have ready-to-eat solutions under Aashirvaad. Another good example is Savlon, which was originally essentially a soap and a handwash brand. Today, it straddles many more value-added segments. Of course, some of them are unique to the pandemic, but there are others that provide, there are pieces that provide continued opportunity. The third piece is creating the new vectors of the growth, investing in categories of the future. And examples of these are ITC MasterChef, Nimyle, B Natural. And there are certain categories which we are incubating, which we are validating the right to win, which we are perfecting the model. And when we are ready, we will progressively scale up.
As a strategy, we are going to scale up only a certain number of categories at any point of time. Even if we are ready, we will calibrate the scale-up because each CAGR that we scale up requires enormous attention from the enterprise. And the categories we have chosen are categories where there is huge headroom to grow. In many of them, there is a huge unbranded segment. And with people's preferences towards trusted brands, we believe that the movement to branded is going to accelerate over time, particularly as the economy progresses. So in fact, our estimate is that we have among the highest addressable space in the FMCG landscape because we straddle many segments that have got huge headroom to grow on account of penetration and on account of per capita incomes. And this is a chart that illustrates this for some of our categories.
I also spoke about active portfolio management. We acquired Savlon, Nimyle, Sunrise because they were aligned to our strategic priorities in the FMCG space. Things that were not working, or we took a view with unlikely to meet our aspirations like John Players. We have divested. Wills, we have completely shrunk, and Superia also, we have largely shrunk. We are actively churning our portfolio where things are not working out as we planned, or they are not in alignment with our strategic priorities. Our portfolio addresses all the important consumer need spaces. In hygiene, we have Savlon and Nimyle, which is a natural floor cleaner. There's an array of good-for-you and free-from-you products. Some very interesting ones are the B Natural Nutrilite range of beverages or the Sunfeast range of beverages. These have got some proprietary wellness ingredients, and the Sunfeast is a high-protein shake.
Similarly, we have a range of offers to deal with the consumer needs of convenience and go, to deal with the consumer needs of indulgence. We have offers in fragrances. We have a very interesting innovation on interactive innovation, which is an adjacent space that Classmate has moved into. And we are building brands with a purpose. Brands must serve a societal purpose. That's the principle, and that's how brands are being built. All of this is going to be spoken with some examples later, so I'm just glossing over it a little fast. Digital in consumer engagement is receiving tremendous interest, tremendous investment, sorry. We continue to amplify our reach in the last few years. Total reach has gone up by 1.2x, direct coverage by 1.4x, market coverage by four and a half times, and stockist by six times.
We are continuing to build in our strong partnerships in the core channels. This is the heart of distribution today, the convenience and the grocery channels. We are also making deep investments in channels of the future, be it e-commerce, be it modern trade, and we have had significant success and significant progress in these channels. We are also building newer routes to market, some strategic partnerships. For example, just to call out one is, for example, what we have got with Amway to sell a range of health beverages. We've also established a climate-controlled supply chain to deal with MasterChef, and given our inherent strengths in food, even the Agri Business, we are also building our food services channel. This is another channel that we have opened up in the recent past. The ICMLs provide us immense opportunity for creating structural advantages.
Besides helping us to make our premium products with unmatched quality and also helping us to keep all our IP in-house, they provide structural advantages by delayering the nodes of the supply chain, integrated warehousing. They are located proximal to consumption markets, lower distance to market. We are able to ship directly to customers. We are able to integrate buying where possible, even create an integrated local agri value chain and bring in the best practices for smart manufacturing. So we optimize manufacturing totally within our ICMLs. So these are creating structural advantages because we are building this with all these objectives in mind, and therefore structurally they are designed to give this benefit. Over the last 10 years, our FMCG businesses have multiplied by 4x. We are the second largest player in India today amongst the listed players.
If I look at a shorter duration from 2017 to 2021, the business has scaled up from 10,500 to close to 15,000. And in the same period of time, our margins have expanded by 640 basis points. This year, we have been able to sustain our margins. And you're all aware that this year, all the players in the industry are faced with a very high degree of inflation, unprecedented. So this is a challenge we have to contend with, and we are dealing with this through internal measures of efficiencies and calibrated price increases. So far, we've been able to sustain our margins, though ideally, our aspiration was to continue this trajectory that you have seen in the past. But in such extreme events and exceptional situations of massive inflation, this does receive a little, this does get challenging.
And it's not only with us. It's an entire industry phenomenon.
So that is a challenge this year. But we are fairly confident that going forward, this trajectory will be sustained, and we are going to continue to improve our margins and progressively take them to best in class for the categories that we are there in. And we also expect to continue to post growth in the top quartile with margin expansion. That will, of course, see our EBITDA and ROC move at a faster trajectory over time. Let me now move on to the next business, which is the agri business. It's a business where we are a market leader. We are very clearly a market leader. We are a very large player dealing with three million tons of commodities every year. The scale gives us efficiencies in operations. We deal with 20 crop value chains and in 22 states.
We are a pioneer of rural transformation to the ITC's e-Choupal, which empowers four million farmers. It's the world's largest rural digital infrastructure. We're also a big player in the leaf tobacco exports, largest buyer and processor of leaf tobacco, we're the fifth largest in the world, and we are about 40% share of the Indian exports. We have leadership here because, one, we have deep expertise. Two, we have a network for sustainable sourcing. Three, we have excellent relationships with the farmers so we can actually work with them to produce what the consumer needs, produce the buy, so to say. Of course, this tobacco segment has been under pressure from an exports perspective on account of the trends globally.
So we've got to address the growth and profitability vectors of the agri business, which have, because of this development of leaf tobacco, have not been buoyant in the past. We have got three transformation pillars here. Of course, this business will continue to removed in efficiencies and provide competitive advantage to ITC's businesses by providing high-quality, cost-competitive, safe agri produce because we do extensive amount of crop surveys before we buy to ensure product safety. So this advantage will continue, and we will build on it. Besides that, the three transformation pillars are really to press the accelerator on value addition, create a future-ready portfolio of value-added products, both from the type of agri value chain we deal with as also the value addition to the produce, which is really the processing. And again, the principle is produce the buy.
It is attribute-specific and completely aligned with the customer's need. The second pillar is ITCMAARS. It is a transformative business model with a very creative monetization model, which will be built on the strength of e-Choupal 4.0. I will give you some highlights of this model, but we will look for another occasion, maybe a little later once we have launched it in the next few months to give you some more details about it. And the third piece to bring in efficiencies at the back end is what we call next-generation agriculture, backed by FPOs, digitally enabled by ITC MAARS with embedded sustainable practices. That is again also going to give us a competitive edge. You are aware that more than 100 countries this time in COP26 have signed the declaration on reducing emissions in the agriculture sector.
Our sourcing for our own businesses straddles many value chains aligned to the value chains that foods operates in. And in each value chain, our Agri Business Division brings in a source of competitive advantage and helps the business scale up. As I said, we are pressing the accelerator on value added. So this green square at the top right-hand corner really explains you the areas that we are focusing on: processing and value added products. For example, food-safe spices, for example, medicinal and aromatic plants, fruits and vegetables, organic puree, among others. And these are two investments, the examples of two investments that we are making to dial up value addition. There's a spices facility coming up in Guntur, and there is a nicotine and related products plant that is coming up in Mysuru. This is going to make nicotine with 99.5% purity.
It's a complete line that is designed in India between our engineers and a partner, and it will meet the US and EU pharmacopoeia standards with sustainable waste disposal. This is an area we believe has good potential given the global demand for such products. The ITC MAARS builds on the ITC e-Choupal. It's a phygital model. The physical aspects, whether it's the demonstration farms, the lead farmers, and the information highway of connecting all the players comes from the e-Choupal. What we are building on top of that is the ITC MAARS, which is Metamarket for Advanced Agriculture and Rural Services. There are really three pieces to this network, which I think are better explained in this slide. First and foremost is the piece on crop advisory. As we know, there are about 1,000 or maybe more agri tech startups in India.
But for the farmer to be able to benefit from their technologies, disruptive technologies that have been discovered, the right ones have to be picked in his context, in his weather situation, in his crop, and in his geography, and integrated to give him a solution. So what our platform is going to do with the technology layer that we are bringing in, which will be plug and play with agri tech startups, but will create a hyper-local, personalized solution, yet scalable solution at the farmer level. And then all this makes sense if he has the access to the right inputs. So there'll be an input marketplace. And then there has to be somebody to buy the produce. So this will also provide the output linkage. Of course, we ourselves are a large output player. We are already committed to it.
Hopefully, over time, we will get many more there. Then beyond that, beyond the pure agri space, there are other areas that we will progressively examine, things like insurance and banking loans are things that will come in quite fast. The others will, over time, we will evolve it. We believe we have a right to win here for three fundamental reasons: low customer acquisition costs, faster scale because we are a scale player in this business. We have deep relationships and credibility in the industry, and we have a creative monetization model. I will now move on to our paperboards, paper, and packaging businesses. We are again here a market leader, not merely in terms of size, profitability, but also in terms of sustainability. We have best-in-class operating metrics, just like we do in agri. We have strong sources of competitive advantage.
There are newer vectors of growth that we have articulated under ITC Next. Fundamentally, we have deep expertise in paperboard and packaging. The fact that we are leaders in the value-added segment is a testament to this capability. This is backed up by state-of-the-art technology. Our competitive advantage also stems from our renewable and competitive fiber value chain that is located proximal to our manufacturing center. We are a one-stop packaging solution provider. Again, because we straddle multiple elements of the value chain, we can bring in unique sources of competitive advantage and unique and innovative solutions. We are going to continue scaling up value-added products portfolio as we have done in the past. As part of ITC Next, I think there are two very strong areas of focus. One is on Industry 4.0 and digital.
The second is on sustainable paperboard and packaging solutions, and of course, also aligning with our Sustainability 2.0 agenda. Just to give you some examples of what we have been doing, these pictures show some of the machinery that has been put in place for making value-added paperboard and decor, another segment where, in India, there is a lot of demand in the country. The box at the right is a very interesting one. It's India's first BCTMP mill. This makes pulp typically out of softwood. We have made this pulp out of hardwood. That's where the innovation has come in, and just this investment itself brings up hundreds of crores savings on an annualized basis, and the fact that we have a renewable and competitive fiber value chain helps us really get value out of this investments that we have made.
The other piece we have dialed up significantly is Industry 4.0 technologies. This is the first site. The ITC Bhadrachalam Paper Mill was the first site we chose for a deep dive into Industry 4.0. And that was chosen because this is the most complex and largest manufacturing system in the ITC landscape. And it has a wide array of initiatives, over 50 use cases developed, state-of-the-art digital technologies used. And this itself has helped us expand margin by 230 basis points. And it is the learning from here that we are taking across all our businesses. And that's how all our businesses are actually making today appreciable progress on Industry 4.0. We have a center of excellence housed in this business that services all our divisions. These are some examples of sustainable packaging solutions.
These are all developed in-house, but we also have some global collaborations we are working with, and we hope to bring out more such products in future. We have, for example, the biodegradable barrier boards, which are used for a range of applications, particularly in the QSR, which is a growing area, and we have recyclable boards, which are used in packaging of consumer goods, and we have the Bio-Seal technology and the Oxyblock technology and the antimicrobial coating. All of this, all of this were earlier using some form of poly to be able to complete it. These are all being substituted. We are finding interesting uptake not only in India, but overseas, and over time, we believe this will become a bigger and bigger component of our portfolio.
Moving on to the hotels business, we have 110 properties, the second largest chain amongst the younger chains in the country, 75 locations. We have best in class profitability metrics, but there is a challenge on capital productivity, and this strategy refresh seeks to deal with it. The first pillar of the strategy is our asset-right strategy, which was articulated way back in 2017, and we've been working on it, and now we are finding that it's gathering pace. We refreshed and renovated Welcomhotel brand to position it for the asset-right strategy. More recently, we have added two brands, Mementos by ITC and Storii, to further our journey in the asset-right strategy, and there is immense promise that we see in this space. The second was about augmenting revenues and sweating our existing assets.
I think the pandemic has taught us, brought us a new revenue line. This is the takeaway cuisines, and given our strength in cuisine, I think this is an opportunity that we are pursuing with a lot of rigor, and then there are other pieces that are also being pursued. There is the ITC Club Privé, and then there is the Sleeep Boutique, the first of which has opened at ITC Maurya recently. You see, selling sleep is an important facet of any hotel. We have a sleep lab at the ITC Life Sciences and Technology Centre. So when you go to our hotels, in the room service menu, you will also find a Sleeep menu. So based on our research, we have developed solutions for the bed and for the ambiance and for the fragrances that help you get a good night's sleep.
That's what this boutique offers to consumers. There's interesting uptake in the initial days. We are hoping to be able to scale it up and also make it available digitally. That will be another revenue stream for the hotels business. Digital is an area of investment from the purpose of revenue management, guest experience, guest servicing, and loyalty. There's tremendous focus on cost. Structural interventions have been made. These will provide sustained benefits over time and will be visible as the industry recovers. These are some of the new properties, Welcomhotel properties that have come up today in terms of the five-star room inventory. They're just about 25% are from management contracts.
In the next few years, this will become 43% because of the focus we have on this segment and the interest and the pipeline that we have got that gives us the confidence that this transition will certainly happen. In fact, we hope to be able to exceed it over time. These are two new brands we have launched in the recent past. Under Mementos, we already have three properties onboarded. Under Storii, we have four MOUs signed already, so very, very encouraging progress, though early days. I will now move on to ITC Infotech, which is a business that we have been giving additional focus and trust in the recent past with the new leadership team. This business has made immense progress in a short period of time. Margins have moved up, EBITDA margins from 8% to about 25% in a short period of time.
We continue to progress this year as well. Revenues are up 24%, and EBITDA is up 63% in the first half of this year. We believe it's an interesting time for this business because there is disruption in the technologies. Given the technologies, the power of digital technologies to deliver business results, I think domain understanding was never as important as it is today. The interplay of domain and technology can actually create a competitive advantage. Given that some of the verticals that ITC Infotech is into are aligned with the domains of ITC, I think there is synergy on domain expertise. That positions ITC Infotech well. There is focus on strategic accounts, large deals, and the interplay of domain and technologies. This, I think, offers an exciting opportunity for growth.
Given the talent shortage in this industry, and that is the critical lever of success, ITC Infotech has worked with a professor at Harvard to create a unique model from Work From Anywhere, which has been launched, and that will hopefully help us strengthen our talent acquisition efforts. Okay. I will now move on to our financials. These are really more long-range financials. Over the last 10 years, our top line has multiplied 2.2x, bottom line by 2.4x, and PAT by 2.6x. But I would like to also draw your attention to 10 years prior, up to FY 2020 because some of our businesses, as you know, were impacted last year in the pandemic.
So if you look at the picture from FY 10 to 20, it is 2.6x, and our GSV is now INR 76,000 crores, PBT 3.2x at over INR 19,000 crores, and PAT at INR 15,000 crores, which is 3.7x. PAT growth category is 14%. ROC has moved up. ROC has moved up from 48 to 72. Growth has been funded largely through its organic route and funded through retained earnings. A brief look at the shorter window of this year. Last year, you know, was impacted by the lockdown and the pandemic, and our businesses, largest business like cigarettes, were impacted in the earlier parts of the seriously impacted in the earlier part of the year. So sales is up 22% in the first half. PBT is up 20%, and PAT is also up 20%. So smart recovery.
Over the last years, from 2012 to 2021, or the last decade, rather, our cumulative free cash flows have been INR 73,000 crores. And you would see over time, the pace of generating cash is actually increasing. And accordingly, after assessing our requirements for capital, we have been upping our payout ratios, which is the dividend payout ratio. And we have a very clear policy on it. Last year, of course, because it was an exceptional year, we paid 102%. And yeah, in recent years, which is the period from FY 2017, and I'm stopping at 2020 because, again, 2021, as I said, had some impact. EPS is up by 47%. Free cash flow generation is INR 31,000 crores. FMCG businesses have scaled up from INR 10,500-15,000 crores. EBITDA margins have expanded by 640 basis points. And very clearly, we have a sharper capital allocation policy.
We've announced, actually, we announced in 2017 the asset-right strategy , which is making progress, and dividend payout ratio has been stepped up to 80%-85%. Just to quickly summarize, we believe the strategies that we have now articulated as part of ITC Next build upon the success we have achieved in the past, address some of the challenges and headwinds faced by some sectors, for example, the agri-business, for example, the hotels business, the cigarettes business, and also identify newer vectors of growth in each one of our businesses, whether it's paperboard through sustainable packaging, agri-business through MAARS or value addition, hotels through Asset-Right, FMCG through a much stronger portfolio play, and leveraging scale of our mega brands, so we have defined, we have very clearly defined the additional vectors that need to come in to drive growth and to drive profitability.
Investments in digital are going to help us be competitive, are going to help us drive both revenue and profitability. We are raising the bar and ambition on sustainability captured in Sustainability 2.0. We have recognized M&A as an important vector of growth. We have recognized exports and proximal market as another important opportunity, which we are accelerating. We have redefined the strategy of organization where needed to keep it consumer-centric, nimble, and focused. And more importantly, of course, I would say, in fact, most importantly, we have a talented team, a highly engaged team, a very committed team with the spirit of being entrepreneurial to propel the organization forward.
And we believe that given all these interventions that we have taken, we should see double-digit growth, or really, I would put it this way, that this makes us feel optimistic and committed to a double-digit top and bottom line growth going in the years ahead. And in summary, we have a passion for profitable growth in a way that is sustainable and inclusive. And with this, it's over to you, Karthik. Thank you, ladies and gentlemen, for your patient listening.
We now have Mr. Sandeep Kaul, Divisional Chief Executive of the cigarettes business, who will give us his presentation on the cigarettes business. Over to you, Mr. Kaul.
Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us this afternoon. I have the privilege to present to you a few highlights of the cigarette business.
Tobacco industry in India is a very interesting market and very different from most other countries in the world. It happens to be a large grower of tobacco, in fact, the third largest grower of tobacco in the world. But very different from some of the countries in the West, cigarettes are not the predominant form of tobacco consumption in India. In fact, they only account for 8% of the total tobacco consumption, and other forms of tobacco consumption exist in the form of bidis in the smoking area, khaini, zarda, gutka in the chewing area. And interestingly, of course, while the consumption of cigarettes also happens to be one of the lowest in the world, and that's one of the reasons that the share of cigarettes in total tobacco consumption is only 8%. But despite being only 8% of total consumption, cigarettes account for 80% of government tax revenue.
The consequence of this cigarette-centric tax and the sharp increase in tax incidents over the years, there have been some unintended fallouts, and one of them being of suboptimal tax collections at the time of heavy rates of increase in taxes, and we'll come to it shortly. I'll show you some examples of that, and it has also led to a proliferation of an illicit and contraband cigarette market in the country. India now is considered the fourth largest illicit cigarette market in the world. We've already seen that cigarettes only account for 8% of the total tobacco consumption and balance 92% as the other forms of tobacco, so other forms of tobacco and illicit cigarettes actually is almost 10 times that of the legit imate cigarette industry in the country.
If you look at the whole taxation policy and the cigarette-centric taxation, as we hope for a more moderate and equitable tax policy, and the benefits of that are visible in this small chart. If we compare two time periods, a period between 2012-13 and 2016-17, when the tax rates moved up by almost 16% a year, the revenue out of the tax revenue only grew by 5%. While in the short period of tax stability that we enjoyed from, say, April 2018 to January 2020, when there was no tax increase, the revenue growth actually was as much as 10%. So this actually demonstrates that when there are periods of stability, there is potential for higher contribution to the exchequer by the legal cigarette industry, and the legal cigarette industry is able to claw back some volumes from the illicit trade.
The menace of the contraband and the illegal cigarettes in the market has. There is a higher degree of awareness of that, and there has been a higher degree of enforcement, and there have been media articles rife with regular seizures that are being done by the Enforcement Directorate authorities, and that's a very good positive development. We hope that this development continues because this is a real big menace not only for the industry but for the economy as a whole. Given the challenges that the cigarette industry faces, there are business imperatives, and first amongst that is to maximize the potential of the cigarette category within the overall tobacco basket. Secondly, it's about countering the illicit trade. Third, we would like to continue reinforcing our market standing as the leading cigarette company in India. We briefly mentioned this earlier.
There are four key strategy levers that we deploy to achieve these objectives. The first being, of course, our future-ready portfolio. Now, this is comprised of some very powerful trust marks that have been created and nurtured over many years and constantly improved upon, a laddered portfolio, and our ability to provide variety and premium offers and distinctive offers to every possible market segment in the country. This is enabled by an agile innovation system based on category insights, creation of vectors of differentiation, and a strong degree of intellectual property and proprietorial knowledge that comes out of our being present across all nodes of the Seed-to-Smoke value chain.
And this allows us, in addition to being able to give new products and new differentiated offers, also allows us to cut the lead time, be quick to the market, be more efficient, allow us to capture more value within the chain because we exist from end to end. Our whole value chain, which is present in India, is maximized to allow us to capture value and bring in about cost efficiencies. And the whole thing has been buttressed by the Industry 4.0 effort to contemporize, modernize, and bring in modern digital solutions to the market. In substance, in summary, we have leading brands in every market segment. There is strong category insight, generation engine that strengthens the portfolio continuously. In fact, 11% of our volumes come from new launches. We have direct reach to 1.4 lakh markets, best-in-class retail service.
We're available in seven million category outlets, almost twice that much of our nearest competitor in the area of sustainability. 55% of our energy comes from renewable sources, 99.9% of solid waste is recycled, and we continue to be leaders in sustainability as testified by the awards that have been given to us by various bodies, six awards in the last year alone. This whole thing is supported by a very capable and advanced technology spine, a backbone that is continuously modernized with Industry 4.0 proprietary models, an integrated in-house capability for leaf development, capsule, specialty filter, and supported by JVs as necessary. We have a 50/50 JV to create competitive advantage in differentiated filters, for example. Some of these areas of strength and vitality really came to the fore as we dealt with the unfortunate pandemic with which we have been affected for the last 18-20 months.
Very happy to say that after the gradual opening up of COVID-19, post-COVID-19, we could restore the total chain pipeline as the markets opened up within a very, very short period of 60 days. We reconfigured the supply chain to adapt to the new normal very quickly. To make sure that there was continuous accessibility of products, we increased the frequency of service where necessary to the retailers. The stockist network was expanded. The sales infrastructure was enhanced appropriately. The insight to execution engine delivered appropriate unit pack formats wherever necessary. New safety solutions were deployed at the top retailers so that people could shop in safer, hygienic circumstances. Our agile distribution coped up with the change in dynamics of the demand as the mobility patterns changed.
In addition to that, we also continued to bring in new introductions, new variants, new formats to the market, and continued our journey. As we come out of the second wave of the pandemic, the trajectory definitely points to the fact that the second wave, the recovery, has been faster than the first wave. We have led the industry in the recovery, and we have increased our market standing over this period by almost 100 basis points in line with our overall long-term trends. I'll dwell a little bit on each of the four strategy pillars that we spoke about. The first being, of course, our future, the future-ready portfolio. It's a portfolio that straddles all price points, multiple segments, multiple regions, multiple geographies, and is based on a very simple model that we would like to continuously create value.
And this is done through our processes of market insights and innovation, and then able to convey that value through our product and packaging features. And then, in turn, our laddered portfolio, our portfolio architecture, and the quality of our products, the product excellence, and the last-mile excellence allow us to capture that value. And the cycle goes on. So create value, convey value, and capture value. And a great example of that is. I'll speak about some of our leading trademarks. Classic has been in the market for about 40 years, yet is vibrant and contemporary and leads our king-size trademark portfolio and competes with the best in the world. The four new variants launched over the last five years alone contribute to 25% of the portfolio, and that is testimony to the vibrancy and the freshness of the brand portfolio that is run in Classic.
It's known to be an innovation leader and has always been first to market in bringing capsules, filter technology, low-circumference products, fresh-sealed packaging, and new pack styles. We have a brand of Gold Flake, symbol of 100 years of legacy and trust, possibly the most valuable and largest FMCG brand in the country. Operates across multiple geographies, multiple price points with multiple variants. Despite 100 years of leadership, new launches have contributed 10% to the portfolio and this brand, too, over the last 18, 20 months has rapidly moved into new segments of filters, pack styles, low-circumference capsules, but our portfolio is not just about Classic and Gold Flake, which are our national brands, so to speak, but a very, very close look at the market. We all know India is not one market. It comprises of many, many sub-markets, micro-markets.
We have been able to create, using a micro-market strategy approach, looking at price laddering, looking at regional customization, been able to create a leading local brand in every geography. We have Navy Cut, which has presence in Kerala, Northeast, East, Bristol in the West, Capstan in the North, Flake in the East, American Club around Telangana and Andhra, Silk Cut in Bengal, Scissors in Tamil Nadu and Kerala, Players in Karnataka. These are all leading brands in their own markets crafted on the basis of very local insights and local opportunities. These complement our efforts with the national brands. How does the model work towards achieving these three objectives of maximizing potential within the tobacco industry, combating illegal and illicit trade, and enhancing standard amongst the legal players? The core of it is our internal seed-to-smoke capabilities.
The context is provided by our programs in category insights, trade insights, innovation, and the windows to the market are provided by market opportunities, innovation-based distinctive products wherever we can provide a clear distinctive product, a differentiated product. It's also about reinforcing the core of our portfolio and premiumizing wherever the opportunity exists, so this is the process that we continue to deploy, and the portfolio continues to evolve. As I mentioned earlier, 11% of our volumes comes from new products based on market opportunity-based first-to-market products, and our assortment has more than doubled in the last eight years so that we are able to provide an offer in every viable segment. This is enabled by an agile innovation engine looking at multiple vectors of differentiation.
And for example, there are filters where we use specialized filters, in-house efficiency in various ways of technology of filters, formats, high-spec, fresh-sealed pack, new variants addressing new market segments, all backed by internal capacity of an end-to-end integrated value chain, which gives us great speed to market, based on the superior talent that we have, and the indigenous machinery development platforms that we have created, and cutting-edge R&D system based on AI scientists, state-of-the-art labs, 20 patents, 60 more in progress, and the whole seed-to-smoke value chain expertise. Nurtured carefully over years with the capacity to innovate and the talent to innovate. Some of these competencies are a matter of domain expertise, and we have internal domain experts in the area.
Some of the skills are not easily available in the market, and we have an internal technical university to drive industry-specific skill enhancement. And we have innovation design teams.
For example, the innovation design teams have delivered us quick changeover kits, provided us frugal automation solutions through vision analytics for online product monitoring system and unique pack styles, so this is something that is only within our system. A good proof of concept of this was the whole evolution of the in-house capsule capability over the last four or five years, from ideation to product development to the in-house manufacturing capability, and finally, through the manufacturing capability, of course, gives us many advantages. One is, of course, significant cost saving. The second is, compared to anybody else, we can get much quicker to the market when we see an opportunity. And this is reflected in a diverse range catering to various market segments.
This is a story which encapsulates how we make our seed-to-smoke system work, internal capacity to innovate, and our proprietary engines bring to bear on market problems. Our integrated seed-to-smoke value chain is unparalleled. I have a short video to take you through some facets of the same. Picking up the thread from the video, this small chart demonstrates what we mean by the seed-to-smoke value chain. From our leaf tobacco growing division, which works very closely with the farmers in the field, the product development team, the extended version of which includes some joint ventures in the area of filter development, the packaging and printing business that allows us to use newer forms of packaging and board and create innovation in the area of packaging. Of course, the manufacturing, the indigenous capability in manufacturing, and the last-mile execution in trade marketing and distribution.
This is the model that has helped us sustain our leadership and grow our business continuously. The new product capability and skill enhancement models work on speedy product development and prototyping capacity, in-house capability for emerging products, skill enhancement through digital technologies, as we saw, and the in-house technical university with a library of immersive technologies in the area of augmented reality, virtual reality, and so on. This allows us to create the capacity to create and renovate. Our manufacturing network is spread across the country. It has integrated capability to manufacture all variants, capsule, capsule filters, so that we can be faster to the market at competitive costs. Our distribution facilities are distributed across the country for optimal logistics. We have contingency capacities at our manufacturing locations to de-risk against localized discontinuity. The manufacturing infrastructure.
We have in the area of cigarette and tobacco processing, the cigarette packaging, capsules, encapsulators, dryers, makers, all state-of-the-art. This is supplemented by a very unique made-in-India effort supported by an in-house machine development and machine design team, which allows us to develop all those indigenous platforms with which we are able to save cost, bring about differentiation, and get to market quicker. We have, in the past, developed sub-assemblies for double capsule filter manufacturing, developed wrapping and end-of-line equipment across the lines. These are all indigenous development. Industry 4.0 has been continuously leveraged to keep our systems, processes, capabilities up to date, modernized, digitally right up there. Shop floor digitization through machine-level data integration has allowed us to improve our operational excellence. We have enhanced our product consistency through application of AI and data science models to control the processing parameters.
We have looked at IoT and machine learning to bring about online waste reduction in our machines, deployed image and analytics-based systems for 100% online quality assurance, and this is when the speed at which our lines work is phenomenal. Developed predictive analytics for optimization of equipment and utility performance. In the area of material movement, we have used autonomous guided vehicles, deployed robots, cobots in the area of material feeding, enhanced quality through mass flow conveyors, and of course, deployed processes like RPA for repetitive manual administrative assemblies. Immersive technologies are continuously used for the benefit of productivity enhancement and were really well deployed during the period of the pandemic also because we could continue to maintain our machines and do their improvements sitting from remote locations at the technical universities and other places, so we can use mixed reality for online maintenance and virtual reality for assembling.
All our initiatives have been very widely recognized, and we continue to be proud of the fact that each of our factories has been recognized by the industry for the work we have done in sustainability. And all this is backed by excellence in execution. Our product quality is right up there, well, well ahead of our nearest competitor. PQRS is one of our proprietary models that we use to measure our quality versus that of competition. The gap only keeps increasing and delivers that excellence in product with which we win in the market. And all this is supported by our excellence in the last mile. As industry leaders, our product is available in all the category outlets. There's about 7 million of them across the country, which are serviced through 10,000-plus redistribution channel partners. We have 7,000 mobile units servicing the interiors of Bharat.
We have best-in-class daily servicing. And this is very interesting because many of the small retailers that sell our category, sell our products, are very, very small, marginal, with very low capital. And our daily servicing model allows them to run a legal business with legal cigarettes on a very small capital base and allows us to be best in class in daily servicing. And we reach about 1.4 lakh markets through our extensive direct network. All this is enabled by using appropriate technology at all nodes to drive efficiency and agility at the scale at which we are talking about 1.4 lakh markets and the number of outlets that we spoke about. In summary, we are well poised to reinforce our market standing and grow the share of tobacco by leveraging our institutional strengths.
We continue to strengthen our portfolio basis our insights, micro-marketing strategies, differentiation, internal capabilities, digital interventions, and Industry 4.0 is used to continuously sharpen our manufacturing capability and prowess and remain world best, and we maintain our competitive advantage through benchmark product quality and superior last-mile execution, which we have always been known for on a continuous basis. Thank you very much, ladies and gentlemen. That's all that I had for now. Over to you.
Thank you very much, Mr. Kaul. The next presentation is by Mr. Hemant Malik, Divisional Chief Executive for Branded Packaged Foods business. I just want to take this opportunity to tell all participants that they can use the chat box to raise questions, which will be taken up at the end when we have the Q&A session. So please use the chat box. If Mr. Malik is ready, we could switch over to his presentation.
Thank you, Karthik. A very good afternoon, ladies and gentlemen. I'm assuming I'm audible, and therefore I'll start my presentation. It indeed is a pleasure for me to be here, and my story today is of a young business with a startup mindset that has braved against long-standing brands and created a sustainable business with solid fundamentals. To start with, I would like to share the purpose. Our purpose is to help India eat better, and we demonstrate this through our obsession to offer great quality products and exciting innovations that are science-based as well as consumer-led. These products are prepared using carefully chosen ingredients made the right way to taste better and to do better. Today's presentation, I'm going to cover in two parts. The first part is about the business highlights.
I would also like to call out some distinct strengths that we as an organization have to compete in the market. The second part is I will cover our strategy to win, where you will see our consumer-centric innovation, how we strengthen the core, and about our strategy towards premiumization. Needless to say, you will find that our purpose of helping India eat better and our obsession to offer great quality and innovation will come right through my presentation. ITC Foods is one of India's leading food businesses. It is also one of the largest and fastest growing. Four of our brands are among the top 20 trusted food brands in India. ITC Foods brands are present in more than 50% of stores across the country. We are present in 20 food categories.
In the last 10 years, we have grown with a CAGR of 16%, which is a 4.2x growth. We are very delighted that one in two Indian households use our products. The ITC Foods brands are present across 17.4 crore households. Some of our brands, as I mentioned, four Power Brands of Aashirvaad, YiPPee!, Sunfeast, and Bingo. At the same time, we have a set of young brands which will soon reach the state of 1,000-odd crores in a couple of years: Dark Fantasy, Candyman, B Natural, ITC MasterChef. We also have a couple of nascent brands like Sunbean and Fabelle, which operate in coffee and chocolates. We have our latest brand in our stable, which is Sunrise, which is part of our acquisition that happened just about a year back.
When I look at the brief about the four power brands, and if you look at Aashirvaad atta, it is the number one branded atta, and the story here is not just about the fact that it has grown at about 18% CAGR in the last 10 years. It is India's number one branded atta. It became India's number one branded atta within just four years of its launch. It is market leader for 15 consecutive years and has more than INR 6,000 crore in terms of consumer spends. The other part of the story for Aashirvaad is the fact that Aashirvaad atta has actually led the category conversion. About two decades back, it was just about 1% of the market of atta wheat combined, which was in terms of packaged atta. Today, it is about 14% to 15%, and 50% of this has been contributed by Aashirvaad atta.
We believe that it shows the huge potential that is there in this space as we will find more and more working couple, as we find more shift towards packaged commodities that is taking place. Some examples that we have in front of us, if you look at tea or if you look at branded oil, these are all already about 70%-80% branded, while atta is right now just about 15%. The second brand in terms of Sunfeast, and we are very proud that Sunfeast cream biscuits is the number one cream biscuit in the category. The whole story for Sunfeast has been around innovation and that innovation in terms of product as well as communication. This is in the cream segment. In the value cream segment, we have Bounce, which is India's number one cream biscuit brand.
And in the premium end, we have Dark Fantasy, which is the market leader in the premium indulgent segment. Mom's Magic was our entry into the cookie space. And in just about 18 months of launch, it reached INR 500 crore and probably the fastest for any brand in the FMCG space to reach INR 500 crore, making Sunfeast India's number three bakery brand. We are one-third of the market leaders in one-sixth of the time with about a INR 4,000 crore consumer spend. Today, in my presentation, I'm going to talk a little bit more about Aashirvaad and Sunfeast. As far as the other two brands, which are Bingo and YiPPee! , we will keep that for some other date when we'll take you a little in more details about that.
Bingo, our snack brand, which is known for its unique product and for its cut-through communication, has been seeing a 25% CAGR over the last 10 years. We are the number one in the bridge segment, as well as we are the market leader in South India as far as potato chips is concerned. And if we were to look at the potato chips and the finger snack segment in the last five years, we have been growing at the rate of 3.6x of the lead competition. And Bingo is about INR 2,500 crore in terms of consumer spend. YiPPee! was our entry into the noodles category. YiPPee! came in with a completely differentiated offer of being a round noodle, which was long and non-sticky. And it was the same time when a large number of other brands had also participated in the noodle segment.
But we are very happy that we are the second, clear second largest instant noodles brand. In just about eight years of our operations, we crossed the INR 1,000 crore milestone. And our 10-year CAGR of 42% is 5.3x of the lead competition. Interestingly, we have also achieved market leadership in Andhra Pradesh, in Odisha, and in Kerala. We have also expanded our footprint globally. Our brands are getting exported now to 58 countries. And if you look at in the last three years itself, we have doubled our export turnover. We sell Aashirvaad atta. We sell biscuits. We sell noodles. We have taken our entire portfolio, and we are opening more and more markets. But we are happy to see that our distribution networks have got set. And we've also started communicating in some of our lead markets.
Our chairman was talking about the opportunity in the PLI from an exports perspective. And yes, we are participating in the export incentive from PLI perspective. And probably we are one of the highest in terms of committed spend. And we think this growth trajectory that we have seen is likely to continue in the future. So how have we achieved this? We have achieved this through leveraging our distinct strengths. So what are these? First of all is our obsession of offering great quality products and exciting innovations. We have a deep understanding of our consumer, both regional tastes and preferences. We work very closely between our product development and research and development, a very strong support by our agribusiness to source the right material, whether it is wheat, whether it is fruit pulp, or whether it is spices.
We have also focused in terms of looking at regional-specific blends for our products. This is an example both through whether I look at in terms of a spice portfolio, where there are different blends developed for different regions. For our atta portfolio, where we have four different blends to start with in the northeast, west, and south. As we are becoming larger, we are actually and the fact that we have about 29-30 manufacturing locations allows us the opportunity to actually customize even at state level. Today, we have customized, for instance, for Rajasthan, the blend is slightly different than Delhi because that is what the consumer expects, and that is what our consumer research shows. What we are also very happy to see is our superior consumer ratings. Our consumer product ratings are ahead of competition across multiple categories.
I've just put up four of the brands. These are ratings which are coming on Amazon. You can see noodles is 4.5 compared to competition at 3.8. The same story continues for other brands as well. The third element of our cross-category competencies of our strength is in terms of cross-category competencies. You can see that sourcing, when you look at wheat and when you look at the wheat value chain, we operate in three distinct categories: between atta with Aashirvaad, between noodles for YiPPee! and for biscuits at Sunfeast. This competency supports not only in terms of sourcing, but it also makes a difference in terms of how you look at the product development.
One of the reasons where we can be very clear, non-sticky noodle that we have launched and has been a very key success part of it has been our understanding of the wheat product. The same knowledge is being used in terms of looking at how yield improvement can take place as far as biscuits is concerned. The same knowledge has been used to develop vermicelli, which has been launched with the proposition of non-sticky vermicelli. Our cross-format chocolate expertise is coming in handy for us. We are leveraging our chocolate knowledge. We have leveraged it for Fabelle as the ultra-luxury segment. The Choco Fills product of Dark Fantasy, the chocolate is coming in being developed by the team, which is the Fabelle chocolate team. The same has got expanded into our Candyman Fantastik range of mass chocolates. We have also seen the advantage of fungible manufacturing technologies.
The pasta line that we have is now being used for vermicelli. Our Mad Angles line was used to develop No Rulz. So that allows us to look at capital allocation across categories where you can, when you have excess capacity, you're able to leverage other categories which are very, very similar once you start getting into it. The fourth area which helps us a lot is in terms of target group understanding. Because I operate across so many categories, but if I were to look at the housewife as a consumer, right, I understand about the housewife through studying about atta . We look at the consumer when we are studying about biscuits. We understand the consumer when we are studying about juices.
All these different windows to understand the consumer actually gives us a significant superiority in understanding about our TG and therefore helps in terms of product development as well as communication development. Of course, needless to say, the institutional strength of ITC has been a key framework for actually developing our business, which covers our multi-channel distribution network, our agri sourcing expertise, the packaging know-how, the cuisine expertise from our hotels, and of course, the R&D from our LSTC to actually make sure that our innovations are both science-based and consumer-led. This has resulted in wide recognition. Very recently, we were also awarded the Mobile Marketer of the Year, and that showcases our efforts in terms of digital marketing. Similarly, in our manufacturing, all our ICMLs have been winning awards on whether it is on energy efficiency or in terms of safety.
Our procurement team has been awarded the Team of the Year for ITC Foods. This also shows the huge potential that is there in the branded packaged food in India. There are a few consumer trends that we can see very clearly, which is going to drive this shift from unbranded to branded packaged. At an overall food category, the category that we operate in, about 85% is unbranded and only 15% is packaged. The consumer is seeking safe and hygienic food products. They're looking for trusted offer. They're looking for products which are good quality and free from adulteration. We saw a significant uptake happening during COVID. The brands which are more trustworthy got affirmed in consumer minds. The rising disposable income, the growth of e-com and D2C, all this supported with conducive macro factors, including the attractive PLI in food sector.
I'm happy to share that ITC has been included in PLI scheme across three categories, both ready to eat and ready to cook, as well as in fruits and vegetables and marine. With very low per capita expenditure versus other countries, we believe India's packaged food story is a story of the future. What are our strategies to win? The first important aspect is our consumer-centric innovation. When we look at innovations, we are looking at consumer insights. We are looking at products which have been developing, leveraging consumer trends. We talk about the new brand experiences which are going to help to build deeper engagement, new consumer touchpoints for convenience and accessibility, as well as a new way of looking at media which can help in terms of breaking the clutter. Our consumer insight process is holistic, is real-time, and it triangulates various data sources.
In the past, the two main sources of information used to be market research and to some extent in terms of media impressions. But today, we have data which comes in from our customer care interactions, data which comes in from e-commerce where consumers are commenting on our products, data that we have the consumer information and data that we are picking up from our websites and our apps, as well as consumer activations. So the sources have moved beyond traditional to a large number of unconventional data sources, which are all captured in the Customer Data Hub. And we follow a process of social listening, image analytics, AI, NLP. And the output is in the form of insights plus content because we are tracking our consumer 24/7.
We are constantly looking at what are these micro trends, what can be the great consumer golden records, and planning and executing personalized content. Our platform is the Sixth Sense. I'll give you a quick example in terms of how during COVID, and we picked up a couple of trends in terms of health and immunity, in terms of seeking conveniences and accessibility, as well as experimentation at home. We were the first company to actually launch a product which was an immunity-boosting product. There were many which came in. But between what we picked up, and I think we were in the market in about 40 days of COVID. The same was also looked at highlighting in the form of communication on both ghee and biscuits. We picked up the trend in terms of need for safety.
Our Aashirvaad Svasti Select Milk was launched with a report card where the consumer could actually put a message on WhatsApp and get to know what the daily report card of the quality of the product that he or she is buying. It was showing the 27-plus quality checks that we make. We also found a huge increase in cooking habits in people wanting to cook at home, and therefore, the entire paste and gravies got launched under the ITC Master Chef brand name. We also leveraged our frozen food range because the convenience was need of the hour and made the same accessible. We have always been looking at delighting our consumers through first-to-market products. Over the years, some of our unique offers in the market include the first filled cookies, the Dark Fantasy Choco Fills. The Mad Angles was a unique market product which was a triangle format.
The original style flat cut chips of Bingo was also the first-to-market where we were converting bakery format chips to a packaged form. We were the first to launch 100% pomegranate juice, the round noodles I've already talked about, as well as tricolor pasta. This journey of looking at first-to-market products continues. Some of our recent breakthrough that I'm happy to share is our filter coffee. One had seen the trend that has come in as far as Dalgona is concerned. We have developed. We are the first in the market to give you filter coffee, very attractive and consumed in the north and the west of the markets. We invested in technology to market aseptic PET format which allows you to also add fruit bits into the juices and gives you a multi-textural experience. We've launched a milkshake with fruit bits.
We are the ones who came in with Ruby Chocolate, the first in the country, as well as a Multi-Millet Mix and different packaging format for ghee. We've also been looking at catering to the long-term consumer trends of health. Aashirvaad's Nature's Superf oods, with its organic range of products, delivers on consumers' need of no preservatives and no additives solution. Our Aashirvaad's Nature's Superf oods is to address the need of rising gluten intolerance as well as Multi-Millet Mix for people who look at going back to the roots. Aashirvaad Salt has launched a ProActive Salt which is 15% less in sodium, and it is better for heart. YiPPee! Noodles uses goodness of whole wheat atta and veg-infused noodles, so we have called out the key value propositions in each of these products because we are very clearly seeing the consumer trends towards health and towards nutrition.
At the same time, the indulgence aspect will continue. And we have a range of premium chocolate biscuit experience under the brand of Sunfeast. Very recently, we've launched a Choco Nut Dipped and Choco Chunks under our dessert range. Fabelle, of course, the signature luxury dessert collection which is used a lot in festivals and gifting. And we have also looked at affordable indulgence which makes indulgence for all, both through our Bounce range of biscuits as well as our launch of Candyman Fantastik daily chocolate indulgence format. Our brands are about purpose-led brand experience for consumers. We have looked at future brand ambassadors in the form of working with young children and school kids to talk about plastic and how they can make magic out of plastic. We have worked with interactive cooking workshops along with our ITC hotel chefs.
Sunfeast India Run as One mobilize the country in support of all livelihoods. We've also focused in terms of offering convenience and accessibility via multiple touchpoints. I'll take a minute on this. We have partnered with airlines. Our range of beverages are available on IndiGo and SpiceJet. We have partnered with INOX. And when INOX was looking at crafting a meal box, the Kitchens of India products have come in to partner with INOX. And I would like to make a point that all these products are actually uniquely crafted. And our ability to actually develop products and work with partners and create propositions which are relevant for their set of customers make a difference to ITC. We are available. We've tied up with Amway. And we have a range of mixed fruit juice.
We have launched ABC, which is apple, beetroot, and carrot, which is powered with Nutrilite. We have worked with Domino's, as when Domino's was looking at shifting from CSD to something which is healthier. That's how B Natural is now available on Domino's. ITC eStore, of course, is our attempt at B2C now across 11 cities where you can order our seven to 800 SKUs. It is, I think, it'll get covered later in the digital section. We've also created home carts for frozen. We have recently tied up with Havmor. So we have about 100-odd carts in Delhi which make the frozen item available near you. The frozen item, I believe, is in the stage where you have to create the category. Therefore, creating more access and more touchpoints is what is going to drive the category growth.
We've used innovative media approach to break the clutter in terms of co-creating relevant content for Candyman Jelimals, which is now one of the top adventure shows on the kids' space. We have looked at dynamic integration of offline plus online with Dark Fantasy Out of Home. And we have started to participate in the esports space with YiPPee! because we believe there is a big growth opportunity in the esports arena. And it'll be important for brands to be there right in the beginning. We've used cutting-edge digital tools and techniques in terms of our Sixth Sense. We do a fair amount of in-house content creation. We have a team which develops a creative and makes sure that moment marketing comes at the moment there is an opportunity to actually leverage your brand. We have also worked on hyper-personalized content creation and deployment.
This comes in because of our Customer Data Hub, which has a very large base of customer audiences which we are able to segment. And therefore, this is an example of Aashirvaad. We actually were able to create about 100 different creators and target to our customer based upon need state, based upon their psychographic profiles. We've been working on an AI-based diagnostic tool for creative evaluation. So it has done a historical audit of all the creators that we have ever used and has been able to give us an idea in terms of what is a creator which is likely to work better. And all our ads go through this AI-based diagnostic tool before they get into the market. We've been tapping into communities where digital media cannot reach. And this community management platform uses, again, the power of data analytics and machine learning.
Coming to the next section, which is about strengthening the core, the area that we talk about is launching range of value-added products. So when I'm looking at strengthening the core, how can I strengthen my core? I can look at expanding the range. I can look at expanding and launching value-added products depending upon the consumer needs. I can look at leveraging the power brands to adjacent categories, and the chairman had shared some examples of how our power brands have been leveraged across adjacent categories, and I'll talk a little bit about them. We look at addressing emerging consumption moments and extending into newer and alternate channels, so I'll come to Aashirvaad. I did touch briefly about Aashirvaad in the beginning. Aashirvaad has been driving branded conversion while maintaining price leadership.
I'm giving you an example of two of our large regions, which is north and the other is south. As you can see, the objective for the brands are very different in both the regions. In the north, it is about shifting in behavioral choice. Choice means where we're looking at converting consumers who are buying beaten and loose atta towards packaged form. This is an example of a four-step process which also motivates you to be four steps forward. It is actually giving the assurance to consumers in terms of how the packaged atta in terms of quality, in terms of process, is as good, if not better, than whatever you might be consuming today. We are seeing that there's a huge opportunity for this conversion. All our brand efforts in the north are focused in terms of shift in behavioral choice.
In the south, the challenge is a little different. The penetration levels are quite high. But what you need to do is look at increasing the occasions of usage. Today, it is just about two meal occasions out of 14 that atta may be used. But having said that, a few years back, that was 1.4. That has moved to 2. And the power of Aashirvaad in terms of the mental availability of Aashirvaad is huge. We have top-of-mind awareness of more than 90%. So anytime if somebody thinks of atta, he or she thinks of Aashirvaad. And this is what we are leveraging in terms of communicating the versatility of atta by educating consumers with atta recipes.
So we have put in thousands of recipes on various ways of what all you can make with atta, is not just about the chapati or the paratha, but going beyond into even making cakes and bread. In terms of moving to more value-added products, our big story has been about atta with multi-grains. And the consumer insight has been about leveraging the high fiber, the story of high fiber atta for better digestion. This is something that came in from our consumer work. And why people consume multi-grain atta? What is the role that the extra fiber does? And in fact, I'm going to share a small communication with you which has done exceedingly well for multi-grain atta. This idea about Happy Tummy for Happy You is being taken forward.
We have developed a unique Digestive Quotient from Aashirvaad, which actually is an exclusive platform for digestive health, which is very clearly when we did our consumer work, this was one of the most significant needs from consumer perspective. This platform will be a one-stop solution for blogs on expert videos and nutritionist consultants, as well as for high fiber recipes. We have looked at augmenting with Sugar Release Control Atta. This is a specific solution for people in need of sugar control. We have used this to develop a browser-based video calling to facilitate easy consultation. We have a panel of dietitians working remotely across the country. You can drive a call to action. After that, it looks at in terms of you have also an option to buy.
You can come to our itcs tore.in to purchase, or you can be directed to any of the e-commerce site to make a purchase. Moving beyond atta, we have looked at the adjacencies. We have looked at bringing relevant cooking solutions for the homemaker. So Aashirvaad, of course, is in atta with select and multi-grain and SRC. We have expanded our space in terms of looking at the health and wellness solutions with the gluten-free atta with multi-millet mix. We also have entered the organic portfolio. And of course, in terms of convenience, and we found there's a need coming in of convenience of ready-to-kind of cooked chapatis. And that is right now under pilot in Kerala. The brand Aashirvaad operates in salt, as well as in spices. We are the market leader in Andhra Pradesh.
Recently, we have also made a reasonable entry in the breakfast solution space because Aashirvaad was mostly in the main meal. But with entry into vermicelli, it offers the opportunity for the brand Aashirvaad to be used under snacking occasions. And there are a few other platforms that the team is currently engaged with in terms of developing the propositions across other Indian breakfast solution opportunities. We have also expanded into some other adjacencies in the form of fresh dairy. This is focused only in two markets in Bihar, as well as in some parts of Bengal. The portfolio includes milk, dahi, lassi, paneer, as well as mishti doi. And Aashirvaad Ghee is now available across all the e-comm platforms, as well as focused in southern markets and Delhi. And it is known for its unique slow-cooked proposition that leads to great aroma. This is cow ghee, highly recommended.
Moving to Sunfeast, I did mention about Sunfeast that the role of Sunfeast has been to create excitement in this category. We entered much later. There have been large players. And therefore, it was important to say, what is it that you are going to make a difference? And I think for us, the portfolio of innovative offers and I think we are very proud to see the number of new offers that we have put in. Dark Fantasy, I briefly talked about the range that Dark Fantasy has expanded into. The same technology of fills is getting used in terms of with the brand Bounce, as well as in terms of having a full dark chocolate fill products. There are many more opportunities that are there with the product team continuously working on.
Apart from the fill technology solution that we have developed, we've also launched many other firsts. In the cake space, we entered about a year and a half back. We have our unique Trinity solution, which is a three-layered cake. We are the first in the market. When we look at digestives, we've launched with 5-S eed Digestives. We've taken inspiration and were the first in the market to launch All Rounder, as well as in terms of Veda Marie Light. I think the important point is that. Sorry. I'm going to play this ad, which is on Dark Fantasy Choco Fills. And the thought behind this ad has been, how do you create more occasions and a specific occasion where Dark Fantasy can be consumed?
This innovation and the premium end, and if you were to look at the biscuit market, and if I were to divide it into three segments of basic value and premium, and at the premium end, we are seeing consumers seeking better sensorial experiences. And that has been a focus area for us. And today, we are the market leader in the premium end of the market. We have a 26% share of the premium biscuit segment, which is one and a half X the largest competitor in the biscuit space. It includes brands like Dark Fantasy, Farmlite, and All Rounder. We've also been focused on strengthening the core with thought-leading ideas.
Mom's Magic is our entry into the cookie space. And we've actually used both the proposition of consumer heart, as well as the ability to make and put, which is the first biscuit where you can actually have a visual on top of the biscuit. And it required a lot of technical intervention to make it happen. But I think what it has done for the brand is made sure that there is a heart in every biscuit. I'm going to play the ad for Mom's Magic communication, which was recently went on the air.
So our ambition is to be the most preferred bakery brand in India. We want to make consumers reevaluate their existing choice of biscuits and upgrade from the leaders. We want to build love marks in each of our brands with a solid idea behind each one of them and a strong point of view. And you can see that I've listed our key brands. If I look at Mom's Magic, it's about helping mothers work their magic that makes everything feel right. And the point of view is it's the warmest superpower. Sunfeast Bounce is about bouncing out the fun inside everyone.
The Farmlite proposition is about it's not just about digestive, it's about digestive. So you are adding zest to health. I'm going to cover a short story on B Natural. B Natural is one of our recent acquisitions. It's been just about since 2014, 2015 that B Natural, which operates in the beverage space. We were a brand coming in after almost two decades of the market leader being there. Therefore, it was important to create a proposition which was distinct. B Natural is the first juice brand which is made of 0% concentrate and made of 100% Indian fruits. The ethos of being an Indian brand and to develop the Indian farmers, therefore, the focus was in terms of developing product which uses Indian fruit pulp and not imported concentrate. Today, we are India's clear number three brand.
Our proposition of fruit and fiber is extremely powerful and well received. We are the second largest player in modern trade with almost a 24% market share. We have looked at premiumizing the juice portfolio, the premium juice portfolio with Ratnagiri Alphonso, and Dakshin Guava, and it's all focused in terms of source of origin story. And I did talk about how we were the first to come with immunity range product at the time of COVID. We have also focused in terms of tapping unconventional route to market. If you look at modern trade, and we are the number one, we are the market leader as far as the Reliance Retail is concerned, which is the largest retailer. We are also probably top one or very close to second as far as Amazon is concerned, and we focused on developing institutional partnership.
This comes in because of our unique PET technology. I mentioned we are available in IndiGo. I did speak about our tie-up with Domino's and Amway. And very recently, we're also available in McDonald's. And the Happy Meals for Kids has B Natural specially crafted juice available on McDonald's as well. The last section is about driving profitability through smart manufacturing, through cost management, through mixed premiumization, and of course, value-additive acquisition. We saw briefly in terms of how the state-of-the-art manufacturing infrastructure has come about. We have integrated ICMLs across nine food categories, 75% female workforce in our Pudukkottai and Mysuru factory. And I'm going to share a brief video about our, it's a one-minute video on our ICMLs. So how does this smart manufacturing help us? We have a distributed manufacturing network of ICMLs, which drives freshness, reducing distance to market.
It makes a difference in supply chain optimization because it minimizes material handling and optimizes market servicing. We also have co-located warehouses, which combine loads, which can go straight from the warehouse to the distributor because we are combining load across multiple product categories. It makes a difference in terms of our overall supply chain costs. We've worked on people capability, multi-skilling. Today, our multi-skilling is not only between the primary processing and packaging. Multi-skilling happens across lines. So the person could be working on a juices line today. And tomorrow, when it is winter and there is the requirement of juice may be down, the same person can go and work in through the snacks line, which at that point of time has a much higher demand coming its way. So it makes a difference in our people.
We need to invest a lot on capability development and make sure that our productivity goes up. The shared infrastructure across common utilities and amenities makes a difference in terms of scale benefit and reduces our fixed overheads. As you can see, our manpower productivity has gone up by 1.4x in the last two years. Our energy efficiency is up by 1.2x. Some of the other levers that we are working on are in terms of Industry 4.0 for manufacturing excellence. A large number of renewable energy projects are up and running. We are working in terms of process automation as well as in terms of packaging know-how. We have a very diverse portfolio of products, and therefore procurement landscape and the digital initiatives in procurement make a huge difference.
We have one of our, I think, first of its kind digitally enabled procurement system, which will be talked about in the next section, and we work on track and trace and robotic process automation using bots. In terms of profitability, I think premiumization is a very important vector. We have been successfully premiumizing the portfolio across our categories. For the staple business, it is about the premium select atta as well as the multi-grain atta in Dark Fantasy biscuits. We have talked about that. At the same time, we have looked at the premium end of juices, and over the years, we measured in terms of what kind of share have we been getting about the premium end, but I think the difference is also the consumer insights which go in terms of developing the solutions which make the consumer willing to pay a premium for these offers.
We also developed SKUs which are more mini and e-com focused in terms of the pack sizes, SKUs, specifically crafted SKUs. Soon, we are also looking at specifically crafted products for some of these channels. Driving profitability through brand extension as we are into 20 categories. We always continually look at in terms of which are the brands that we can actually leverage. I'll give you an example of milkshake, right? So we have the Sunfeast brand, and we have got brands under Sunfeast milkshake. When I'm looking at in terms of developing a chocolate shake, I think the Dark Fantasy brands have a very great synergy with the milkshake product as well. It is unique to us because we are across certain categories. Therefore, these brands are easily extendable. My Candyman has gone into Candyman Fantastik.
The ITC Master Chef, which started with frozen food, is available across spreads and dips, across cooking paste and gravies, and of course, extending the brand within a category with different types of product, as an example of Aashirvaad. This is another source of making sure that the brand investment costs are managed as we get into adjacent categories.
Finally, in terms of value-additive acquisition, Sunrise, which was a 70-year-old brand and the number one brand in West Bengal in spices, having a strong cultural connect with Bengal and offering a great range of blends with high-quality differentiated and regional products and good profitability and returns, it matched very well with ITC's market leadership in pure spices and AP, with our pan-India network of direct procurement from farmers, with our expertise in quality crop development, and our expertise in large-scale quality material procurement, which will drive cost efficiencies and leveraging the wide distribution network. This was a great match. And in the last one year and a few months, we can see that we have been maintaining the momentum in the ongoing business. We have driven new distribution points in terms of modern trade and e-commerce. Our expansion to other markets of the East has commenced.
We can see our shared gains as well happening in those markets too. We have driven profitability through integrated supply chain, looking at procurement savings as well as cost efficiencies, as well as increased presence in touch points including digital presence as well as to reach out to the non-Bengali audience. I'm happy to report that post-acquisition integration has completed successfully. We are on track as per our acquisition targets. In summary, the ITC foods business is well poised to sustain high-growth trajectory. Our chosen categories offer immense growth potential. Our future-ready portfolio and our ability to leverage our power brands, our science-based R&D will help us to fuel further innovation. We continue to explore new vectors of growth based on our deep consumer understanding.
We are harnessing digital and analytics through cutting-edge AI and ML interventions, both in terms of consumer space as well as manufacturing space. We will drive profitability and capital productivity through premiumization and leveraging value-added adjacencies. Smart manufacturing, which will delay operations and distribute a distributed supply chain. Capital efficiencies through working capital management and improving capacity utilization, we believe, is a strong foundation for rapid and sustainable growth, both in scale and profitability. Thank you.
Thank you, Mr. Malik. That was a very comprehensive presentation on the branded packaged foods business. We now have a presentation by the Divisional Chief Executive of the personal care business, Mr. Sameer Satpathy. Over to you, Sameer.
Thank you, Karthik. Good to be here. Good afternoon, everyone. Before we start, I just want to very quickly take a slide to introduce the personal care business to you.
The personal care business is in primarily four segments. The first one is personal wash, which is around 20,000 crores with the brands of Fiama and Vivel, health and hygiene with Savlon, fragrances with Engage, and home care with Nimyle and NimWash. We have been growing through a focused strategy with approximately a CAGR of 19% with the help of our power brands, Savlon, which is a leading player in health and hygiene. It's done well since we have acquired it from J&J. Fiama, which is positioned on the joy of bathing. It has body washes. It has a unique gel bar and a lot of bath essentials. And Vivel, which is a regional leader in the East. And Engage, which is the number two brand in its category. The growth levers, the strategic levers, as we call them, there are five of them.
And I'll be taking you through them. So the first one is building brands with purpose. We believe in ITC in the Triple Bottom Line. And our brands reflect the same. So we anchor needs in higher-order social and consumer needs because we believe that brands need to give back to society as much as they take from society. It is a symbiotic relationship. And there is give and take. And if we do that, brands grow and society grows. And it is good for both. So when you look at it in Savlon. So Savlon, we are talking about Healthier India with Healthier Kids. Build a Healthier India. The belief is that if the kids are healthy, the nation is going to be healthy. We have invested a lot into a very large school program, almost 16,000-odd schools and 5.7 million children.
In the pandemic, schools being closed, we redirected the effort into hospitals and doctors. So a lot of work in that area and also public service messaging. For Vivel, we talk about a more equal society. Women's empowerment is what the purpose of the brand is. Fiama, we talk about mental wellness. And for Engage, we talk about gender equality because there has to be a respectful and gender-sensitive piece of communication because we tend to influence our young people. And as responsible advertisers, we need to put on the right imagery and right role models for our children. The second and the main lever for us is how do we grow in future-facing categories. And this is most critical. We have entered a number of categories. And over here, these categories are deodorants, body washes, hand washes, disinfectant sprays, floor cleaners, and now dishwasher liquid.
They have something in common. They are under-penetrated. They are high margin. And we, through our efforts, have taken pole position. It's a combination of innovation and market development. Also, what we have been able to do very well is that we have been able to upgrade consumers. And as all of you know, upgrading consumers is a little cheaper than just share gain. And this gives us, because we are able to create, because it is high margin and high growth, we are able to create an investable surplus, which we are able to invest to grow our brands. We also combine that with a lot of innovation because we believe that if you are first, if you create new occasions, you can grow the category faster. And because you can grow the category faster, you also gain share.
For example, in pocket fragrances, we created a new category, which is an out-of-home category. And it also created a new occasion to consume the category. As you know, the perfume category in India is underserved and under-consumed. So this creates another way of increasing the pie and us taking a major share of it. The disinfectant sprays under Savlon, I think most of you would have used some of it. They became ubiquitous during the pandemic. And this was a very large innovation from us for the pandemic. And likewise, we have a number of these innovations. The gel bars is another. So anybody who's used a gel bar, this is proprietary technology. And consumers keep coming back for more. So in that way, we are able to grow new categories and grow them faster and grow them more efficiently than competition.
The third lever is how do we innovate to upgrade to liquids. The largest category which we operate in is personal wash. And if you look at personal wash, it's a very competitive category. It is very highly penetrated. Soaps are very highly penetrated. So we identified a segment over there which was high margin and was growing very well. Liquids, as you know, some of you would know, have been growing at the rate of 18%-19% CAGR for the last few years, while soaps have hardly grown. So it's high margin and high growth. Over here, when you look at India, the penetration of liquids is very less. And when you look at countries, they are 10x, 11x, 12x of our size in terms of penetration. This penetration is happening. And how can we accelerate the same has been a lot of the marketing efforts.
So the key thing for the marketing team is how do we create this category relevance. I'll show one or two pieces of communication just to demonstrate the fact. It could be to have a deeper insight on why consumers could upgrade. It could be just information also because information sometimes also makes people reconsider their choices. The second is from a brand, Vivel, which talks about upgradation from soap.
One is that you create relevance in the mind of the consumer. The second is that you also have to make it affordable. India still is a country which is emerging. There are a lot of aspirers out there who want to upgrade. How do we get the price of the liquid equivalent to that of soap? This is where a lot of our innovation and our R&D teams have been working. Today, we have products in the market which are delivering cost per wash, which is almost equivalent to that of soap, whether it be in hand wash or in body washes. What we are doing with that is we're taking price out of the equation and attacking category barriers because we know that it is only a matter of time that there's a tipping point.
If you're able to grow these categories through innovation and grow them faster, we stand to gain because we have a higher market share. We've already taken a higher position in these categories of the future. In line with that, if you looked at it two years back, we were at our in the total personal wash category, we were at around 14.7%. Now, 25% of our total sales in personal wash comes from liquids. This is much faster than the category. The point I keep to belabor the point, the margin play in liquids is much more than soap. That gives us a lot of more investable surplus, which we put behind our brands. The fourth thing is winning in the channels of the future. Not only the categories of the future, but also channels in the future.
And this is important because consumers, new age consumers, who are more likely to adopt newer categories are going to be more e-com focused, more modern trade focused. So for us to win there was very critical. And I'm happy to share that as far as personal care is concerned, we are at double digits of our sales coming from e-commerce. For the industry, it's around 2%, 2.5% as per Nielsen. We have done it through various means because at a level, we have great partnerships with the various players out there. We have a great supply chain. And we have also designed the portfolio for e-commerce. This has helped us gain share. This has helped us get new consumers and, more importantly, get penetration of new categories with these new age consumers.
And as we go along, we realize that we need to take this further because there is a change happening in FMCG. And it is happening in the digital front, B2C brands or digital first brands. So we have an inorganic play, which we have investments in Mother Sparsh. And we also have our homegrown brand, Dermafique. The whole idea is that these are places which are going to be disruptive. These are places where the consumer is going to be changing and reconsidering her choice. And there are also capabilities which are different than our traditional brick-and-mortar play. This also gives our talent exposure to the best-in-class techniques because when you try to grow a brand organically, you tend to obviously build certain capabilities.
And also, when you have access to partners who are also in this space, you can get in learnings which can make this growth journey even faster. So whether it's talent, whether it's capability, or building brands, we are on a journey of investment. We are on a journey of disruption. And we feel that this could be a place where, in times to come, we could see disruptive growth and also a lot of value creation happening. Last but not the least, we have always prided ourselves in ITC to grow brands internally. But we have not shied away from looking at value-attractive acquisitions. We have looked at opportunities across. But we have only invested where we feel that we were able to scale up these opportunities. I'll talk to you about two of them. One is Savlon. The second is Nimyle.
Savlon, we have talked about before also in the public domain. It's around 14x from the time we acquired it. It's been a great journey over there. But the second one, which sometimes most people may not be completely aware of Nimyle because it was basically a very small brand in the East. We acquired this brand. And it is already 5x from the point we acquired it three years back. What Nimyle gives us is a great play into home care. And it is one of the; it is the only large-scale brand which is based on naturals. So we have in this brand a way of pivoting and segmenting the category in a manner to our advantage. And whenever we do acquire a brand, the other thing which we do is we put two engines on it. One is our innovation engine. The second is our distribution engine.
And I'll talk to you about both. So if you look at Savlon, Savlon Soap, we have been able to overdistributed 2.3 times since acquisition. When you look at Savlon Hand wash, it is 400 times. It was hardly being distributed. Nimyle also, we have been able to take it 5x. So we have really used our distribution engine well. And I'll talk to you about the innovation engine when I'm taking you through a very small case study on ITC Savlon. So Savlon went up 14x. But I think what is not known is the margin went up by 600 basis points. It went up by 600 basis points because we were able to go to a more profitable mix. One. Second is, for anything which comes in, like with any other brand in ITC, we have a cost program which we run the brand through.
And that squeezes out any kind of fat which might be there, any kind of wastage which might be there, so that we can take all that money and put it back to more productive use, which is to the consumer or to the customer. When we got the franchise, 90%, 95% of the sales came through these two packs. And today, the innovation engine has been able to completely transform this franchise. And that is one of the reasons why our margin has increased. So we have this play. And we are using it on our various acquisitions. And we'll continue to use these engines of both our distribution engine and our innovation engine to grow these inorganic opportunities and scale them so that we can have value-attractive innovations. Coming to Savlon, when we acquired this brand, it was 50 years of heritage. It had some strengths of gentleness.
It was an orange color which the brand kind of owned, and there were some design pieces which it owned. But there was a problem, and the problem was that its strength was that it did not burn. But consumers then questioned its effectiveness, saying that if it does not burn, how is it effective? As all of you know, it is actually a superior formulation. But communication could not solve for it at that point of time. So when we acquired the brand, we thought about it and said, what is that we need to do? And what we did was we converted its weaknesses into its strengths, and we started building on its equity on doctor's most trusted brand. So yes, Savlon is the doctor's most trusted brand, and we used this.
It became a double whammy because we had both the expert performance and trusted by professionals coming in through this line. And because of which, we were able to really scale up the brand. And this was very, very critical, especially in the first two, three years when we had just acquired it. The second thing which we did was we built purpose into the brand. And purpose is something which is very, very important. I think it gives a lot of spirit to the brand. It gives a lot of emotion to the brand. And brands are emotional. And you need consumers to react to it in an emotional manner. So we had very large school programs. I've talked to you about this before, 16,000-odd schools, more than 5.7 million children.
We were teaching them about hygiene, how to wash their hands, how to have hygienic habits, so that if they do that, then they would not fall ill as much. The second thing which we did was in terms of taking the hand wash and making it more and more affordable. So when we started to when we are today, the price per wash of a Savlon hand wash has come down to 10 paisa per wash, which is almost the same as what you would do if you used a soap. So today, the category is in a good place. And we will be able to grow it as we put more and more evocative communication and more and more consumer education. And that's what helped us also grow as a business. The second thing is, for example, the Pichkoo pack was also a great innovation.
One of the problems we had in terms of cost was that whenever you used a hand wash, you had to have a pump. So we gave this challenge to our teams and said, hey, can we have a hand wash which can dispense without a pump? So this is a pack which can be kept on your sink. And it is a squeezy pack. So you can easily dispense the liquid, and it's for only INR 15. So all of these efforts, and there are many more efforts in the pipeline, will help us grow the category and give access to more and more consumers for the brand. The other one I think I want to talk about, I think the chairman mentioned it briefly. But I think it was a purple patch as far as we are concerned in ITC and also the brand.
We in ITC have always seen us as national champions. We have always felt that we are a brand for India, made for Indians, and innovating for India. So when the pandemic struck, one thing we were clear about is that whatever the requirements of society, whatever the requirements of people, we should be able to fulfill it. So it was rapid innovation and innovation at scale. So we launched a number of products, whether it was wave one and wave two, and we scaled them up.
This happened because of a combination of factors, whether it was the R&D teams, which were working throughout the pandemic with labs in India or abroad, getting the products formulated, tested, and out into the market, whether it was the marketing teams getting in, picking up weak signals, picking up latent signals, latent needs, and feeding it back and saying, this is what the consumer actually wants. This is what will reassure her more. This is what technically we will have to say. So the product parameters have to meet that. Whether it was the manufacturing teams who had to manufacture overnight millions and millions of cans or cakes of soap or liters of sanitizer. And some of you would have seen news reports that we overnight converted one of our perfume factories into a sanitizer factory, etc., right at the beginning of the pandemic.
Or whether it was our sales and marketing teams, sales teams, which made sure that the product was available on each shelf. I think it was a fantastic effort and above all, I think it was the team of young managers, middle managers, who were given this challenge and who, I think, came through it with flying colors, so we are very proud of them of what they were able to achieve, and I think we can say with a lot of confidence that the system was stress-tested during this period, and we were able to do well not only for the brand and the company but also for the nation, and this was also helped by the fact that we had started working on a lot of these innovations. This was a platform-based approach.
We have lighthouse projects which are five years hence, three years ahead, 10 years ahead. All we did was we accelerated them and made sure that they were there for consumers when they needed them. There is always a pipeline of products out there with us so that whenever there is a need or an investable surplus, we can use innovation and invest into these brands. We've also received a lot of recognition globally for our efforts. Some of these we are very proud of. I just want to call out a couple. I think we won the first-ever Grand Prix for Creative Effectiveness. I think this is the first win by any company, not only in India, but I think in Asia. We were also part of the Cannes Lions Creativity Report of the decade.
There were 10 case studies for the decade or 10 brands which were picked up. Savlon was one of them. These are all, I think, great markers that our marketing teams are coming of age and are competing with the best in the world and doing very, very good work. Coming back, when, you know, when we started, we said that at point of parity on performance. I think now when we look at our data now, in some of the centers, we have caught up with leading competition. In some of the centers, we have not. But in some of the centers, like in Kolkata, we are on performance. And the second thing is on some centers, like moisturization scores, we are ahead. Now, what does it mean?
It means consumers who were at some point of time questioning whether the brand is as good are saying it's as good, and they're also saying, hey, you're better in some parameters. What that does is in the medium to long term, it gives us another lever because now you are in a very large segment able to say that you can compete and you can differentiate, and as you all know, in our business, the ability to differentiate and differentiate well gives you a lot more than if you were just a me -too product, so we are working on this, and there is communication of this kind which is going out, which is saying not only protection, but also gives you moisturization, so the best of two worlds, so whether there is COVID or no COVID, I think this is a great thing to use for your family.
But the innovation engine chugs along. We will keep pushing boundaries. And we are pushing boundaries with this work which we are doing. It is the Savlon nasal spray. It's the first of its kind. What it does is it is a preventive to COVID. This is a challenge we threw to our scientists and said, hey, is there something we can do? And is there something which, as a company, as a brand, we can do? And we have tested this product with third-party labs. And there's some intermediate testing which has happened. And it's cleared all of that. We have got permission to do clinical trials, which the ethics committees have given. And there's a large-scale clinical testing which is on as we speak. But if we clear all of that, I think it's going to be something which is very useful for society.
And this would be a great contribution from our side in the fight against COVID. So all in all, in summary, we are focusing on future-facing categories as they give us huge headroom for growth. And we will continue to drive growth through penetration and market development. Science-based R&D platforms are powering innovation and speed to market. And our purpose-led brands, backed by impactful communication and deep consumer engagement, will continue to grow. We think we are well-positioned to seize the emerging opportunities to drive scale and profitability. Thank you very much. And I hope that I was able to explain some of the stuff which we are doing internally in the personal care business. Thank you.
Thanks, Sameer. Very interesting presentation. May I now request Mr. B. Sumant to take over for his presentation on how digital is powering ITC Next strategy? Over to Mr. Sumant.
Good afternoon, ladies and gentlemen. It's my pleasure to present to you what we're doing in the digital space. Now, a lot of what I'm presenting has already been covered by my colleagues. But that's just a testimonial of the fact that digital is used across the organization. I'll now walk you through our thought process on digital and how we find this as a key pillar and how we're driving it in the organization. If you look at India today, I think the country is going through a rapid transformation. You look at the smartphone usage. It's hit 170 million. The digital payment gateways are being driven very aggressively by the government. And the adoption rates are phenomenal. And there's a plethora of new startups in the digital space also that have come about.
I think we're looking at a complete shift in the kind of consumers that you have today. The modern consumer is a digital native consumer. And the current generation, they like to make a statement. They are proud of who they are. And they want to focus on themselves and invest in themselves. They're proud of our D2C culture. They believe in following their passions. They want instant gratification. They're also great advocates for change. And they are not afraid to espouse a cause. They're extremely connected. And they're very comfortable using multiple technologies. And are used to having information at the touch of a button. So all this actually makes this a very, very different kind of consumer who has emerged.
For organizations to do well, one has to understand the consumer very well and be able to adapt not just your products, but your entire business model to meet the needs of this consumer. If you look at consumer behavior in the FMCG landscape, we find that the use of smartphones has become par for the course. People like to use it not just for shopping, but also for a lot of content today is consumed on the phone. If you look at IPL, significant numbers of people watch it on the phone and Hotstar. Similarly, people prefer to watch and enjoy experiences in the comfort and safety of their homes thanks to COVID. Connected devices like the watch I'm wearing has become pretty normal, where you have a combination of physical and digital experiences melding into one.
In terms of channels, the e-commerce channel has really galloped in this, especially during COVID. E-commerce used to be a channel which people looked on for huge discounts. But I think it's moved well beyond that. It's now a channel that people go to discover range, variety, and of course, for convenience. The convenience of home delivery really came home during the COVID period and I think is here to stay. So it's now a channel that offers range, convenience, and of course, attractive pricing. Direct-to-consumer models are a complete boon for the FMCG industry. We've always been disintermediated from our consumers by retail. But with the D2C capabilities being developed, it's possible for now brand owners like us to engage with consumers and build that relationship. And that's what will be lasting and can be sustained going forward. Hyper-delivery models have also come in.
You now see the current wave of 15-minute deliveries that Swiggy is offering and Grofers and so on. This is here to stay. What these models are trying to do is replicate the kind of convenience that the local kirana offers, where there is somebody in the shop who can always do home delivery. I think the digital models are trying to replicate what we've always had through kirana, through our neighborhood kirana. This is another trend. Companies need to adapt to be able to cater to these kind of requirements. These have a lot of implications for how you design your supply chain and how you do your fulfillment. I'll talk more about that as I go forward. Analytics, the fact that everything is being done digitally allows you to capture data at every touchpoint in the transaction.
And this allows companies to analyze the data, mine them for information, and use very advanced technologies like AI and ML to come up with insights which are not normally obvious. So analytics is here to stay and is going to be a serious source of competitive advantage. I'll now take you through our journey, the digital journey that ITC is going through. In fact, if you look at ITC, I dare say that it looks like the same company. But if you look under the hood, you'll probably see a completely new organization, which is like digital inside. This is how we started our journey. We were one of the first companies in the country to launch a sales force automation application way back in 2007.
And since then, we've had lots of inputs. In 2016, we set up our dedicated e-commerce team within the trade marketing and distribution setup.
There's a complete dedicated team that focuses only on the e-commerce channel. And that team has been able to help us catapult our growth rates in e-commerce, especially in the recent COVID period when people are shifting to e-commerce. Our growth in e-commerce has been phenomenal, far ahead of most other companies in the industry. We've had a series of launches. But one thing I'd like to call out in this slide is if you look at the last three years, the pace of digital has grown exponential. Today, we have initiatives in every single aspect of our operations, whether it is improving work processes, automating work processes through the digital personas, the chatbots, or the RPAs, or it is OneITC, which actually leverages the entire transportation and logistics buy of the company and gets organization-level synergies.
I think I dare say that today we have one of the most efficient and low-cost transportation networks in the whole country because of our ability to put all of the trade lanes together and negotiate with vendors because we offer through our network of routes, we offer backhaul routes for the vendor to also find efficiencies. And that gives us efficiencies. All of this is possible only because of the OneITC initiative. If you look at some of the others, and I'll cover many of the initiatives in 2020 and 2021 in my subsequent slides, but you will see that there is a whole plethora of initiatives covering operations, procurement, employee enablement, consumer insighting, consumer experiences, the complete gamut. Let me start with insighting. We've set up our Sixth Sense Customer Data Hub several years ago.
One of the key things that we did in that is every single touchpoint that the organization has, whether it's email, whether it is a phone call, or whether it's a social media comment, our digital campaigns, our marketing activities online, visits to our websites, all of that comes into one single repository. Just to give you an idea, we get about 5,000 social media posts a day. We get about 150 calls a day. So we get a massive number of data coming into our Customer Data Hub. And all of these we then analyze. So we have tools that analyze social conversations. For example, if it's a conversation about health, if it's a conversation about nutrition, about spirituality, you name it.
So we actually have tools that will tag all the keywords in a conversation, group it, and create cohorts, which we can then use in improving our targeting of products, services, and communication. Similarly, we have tools for image analytics. So today it's very common for people to post an image and write some text next to it. So you also need to know what is the image conveying. Is it a gooey brownie chocolate cake, or is it a fried snack? So we have things like Google Lens, which we use to analyze the image content. We have other digital image analytics tools for lookalikes. There's a lot of issue today we have with counterfeiting and people passing off products which look similar. So we have tools which can actually detect anything that looks similar to anything that we have.
That is used mostly to figure out if there's any infringement of IPs that are being done. Consumer journeys, every time you're on one of our digital assets, whether it's our websites or our e-store, we look at how the consumer interacts with the content on the site. Everything from first landing on the site till clicking and checking out is something that we learn from. And that helps us improve our value propositions as well as create cohorts. The next part is content. I think the days of content creation or running ads on television are long over. The current digital trend, you have to look at taking your insights, sharpening your focus, and then being able to develop content that meets the requirements of the cohort that you're targeting.
Today on insights, we have a very vast set of first-party data, which we couple with third-party data to further refine the understanding of the cohort. We have about 50 million of first-party data and about 650 million of third-party data. All of this helps us really sharpen the content. And we now have digitized content. For example, if you want to post a banner on Facebook, you actually modularize the content so that the background, the text, the font, the language, the characters in the ad can all be changed depending on the audience you're talking to. We have AI engines that actually, in real time, assemble content, serve it to a cohort, do an A/B testing, see what works, what doesn't work, and then change the content and also change the channel in which you post the ad.
Both for content creation and deployment, we use AI tools, which significantly increase the effectiveness of the content that we use. Just to give you an idea, if you run campaigns, you could run a campaign which is a call to action, where you run a banner, you want somebody to click on it, go to a site, and purchase your product. You want to know the click-through rate. The click-through rates typically for performance campaigns are 1.5%-2%. When we use first-party data, it's as high as 3.5%. Similarly, when you're building brand awareness or communication campaigns, typically have a view-through rate of about 30%. When we use first-party-based cohorts, that jumps to as high as 45%. Data makes a lot of difference in the effectiveness of communication as well as the cost of communication.
If you'll see our ITC eStore, we advertise and we get people on the store. We find that the return on ad spend when we use our first-party data is as high as 25%, higher than when we use normal cohorts available on Facebook and other media. In-house content creation, gone are the days when you have an agency making all of your content. We create content on the fly. So if there are occasions, sometimes you have fluid occasions like a surprise wedding announcement, or you have fixed occasions like Diwali or Valentine's Day or New Year's Eve. So both kind of occasions, you create content. And we today have in-house content creation engines which have generated about 2,500 pieces of content in the last 12 months. And 70% of this content that we create is from first-party data.
Now, when you do all of this, you need to have a good measurement track in place so that you know that your spends are getting optimized. Today, our digital spends have seen a steady increase, and we've seen a 3.2x growth in digital spends over the last four years. The next part, once you have this insight, you need to reimagine consumer experiences and start to create really differentiated consumer experiences, and all of my colleagues talked about it. Hemant talked about it in the context of foods, and so did Sameer in the context of personal care, but this wheel is very important. You have superior insights. Those insights are no good unless you're able to convert them into offers, and for that, you need agile and purposeful innovation. Sameer talked about those examples.
Because we were listening in on conversations and we could catch trends early, we were the first to launch the surface disinfectant spray. That's a category leader. It is a super success. And then, of course, because of our agile manufacturing and platform-based R&D, we could quickly repurpose the fragrance lines to produce a product. We then listened to conversations, and people were saying, "Hey, what about my clothes? What about my sofa? What about my curtains? How do I keep them sanitized?" So we came up with a cloth disinfectant spray, which, by the way, also is a mold killer. If you want to use it on your jackets in winter, which you don't want to wash every day, it works perfectly as a mold killer.
But that came from the inside of, "What do I do with my clothes?" Similarly, people were touching surfaces, and they wanted something to protect themselves. So we came up with wipes. So if you have surfaces that you don't trust, for example, you're taking a public utility, and you want to clean it, so we've got a set of wipes. And that journey kept going on. And just to give you an idea of platform-based innovation, we have in our R&D center groups which look at agriculture, at food, nutrition, hygiene, and skincare, and so on. So there are various technology platforms that are being built at all times. And we have the unique benefit of being able to meld many of these platforms into one. And Nimwash is a classic example. So the agri team knows all about how to remove pesticides from vegetables.
The personal wash team knows everything about washing, and we combined the two knowledge bases together to come up with an all-natural veggie wash. Because one of the things in COVID was, "What do I do with my vegetables? I can't use a sanitizer on it. So how do I clean a vegetable which I eat without peeling, for example, like a tomato or a carrot or so on?" We came up with this veggie wash, which is an all-natural action which not only kills COVID and bacteria, but it also removes pesticide from the vegetables. That's a unique offer. It was possible only because we were, A, listening, and, B, we had the technology platforms.
If you look at the nutrition-based beverages that we launched, now our agribusiness, I mean, our R&D labs have been working on immunity platforms and a whole host of health platforms for a long time, including coming up with all-natural ingredients which are clinically proven. So when the need came in COVID, where people were talking about immunity, "How do I protect myself? How do I improve the body's immunity?" We had these ingredients that we could put together and come up with formulations that actually have clinically proven immunity improvement claims. And that's, again, a great example of partnership. We've also gone outside the organization and partnered with people like Amway, who have their own molecules like the Nutrilite Nutraceuticals, which have 21 vitamins.
So if you see the Nutrilite range of beverages that we've done with Amway, they combine some of Amway's proprietary nutraceuticals with some of our proprietary natural ingredients which boost immunity and so on. And it's a great match that comes together. The protein shake has got our milk protein with Amway's Nutrilite vitamins in it, similarly the other products. So it's something that's really working well. The next part is, you've got these great offers. How do you engage with consumers? And the mode of engagement with consumers is changing rapidly. Here's another example. During COVID, we had this problem of how do we connect with consumers. Consumers themselves engaged, for example, interaction with youth. And the youth were really frustrated, however, being cooped up in their houses.
So we said, "Hey, why don't we take virtual concerts and take it to the consumers in their houses?" So we actually ran, yeah, we created this ITC Connect program, where we were able to run 45 programs online. All kinds of brands have used this platform to create engagement programs with consumers. So you click on a Facebook ad, you go into Zoom, and you can register and participate in the program. So we've had great success in it. We heard that people were missing pujas in temples. So we ran an online puja campaign, which saw some great traction. And we then did the Lakshmi Puja, which had 32 million views. The Mangaldeep app, we've had 1.15 million downloads. And it's a very, very heavily used app. And even on Instagram, it's got about 92,000 followers.
So many of these programs have really worked, but it's about taking that consumer insight, acting in the moment, and creating platforms of connection. The next part is smart operations. We've got a gamut of AI/ML solutions that drive each of our applications. We've got multiple applications for interacting with the trade. Vajra is used by the salesman. Vistar is used by our rural salesmen who interact with the stockists. Viru is a virtual salesman, again, which we launched during COVID, where you get a WhatsApp message, and the retailers are able to log in and connect and use it, and Unnati is an app which allows the retailer to order anytime and get fulfillment the next day. If you look at our e-commerce growth, in this period, we've been able to; it's now 7% of our total sales, and in categories like personal care, it's as high as 14%.
So this is thanks to the mobilization that we did to build brands, to communicate on each channel, and to grow sales. If you look at smart operations, and I think every one of the presentations talked about this, I think today we use analytics in a big way in every single area of operations. If you look at the planning pieces, there's a lot of work that is being done. We're running Project Zen, which is an end-to-end integrated platform. Now, as the consumer segments splinter and as you start to offer more and more niche products, you need to have a supply chain that can actually put together the offers and deliver it seamlessly, and for that, we're putting together an end-to-end platform that has different fulfillment strategies for high-volume products, low-volume products, niche products, and so on.
And all of those and catering to different kinds of channels, whether it's direct-to-consumer, whether it's e-commerce, modern trade, general trade, convenience. So it's designed to take care of demand from multiple channels and for all kinds of products. Similarly, our factories today are state-of-the-art. All of them use digital technologies extensively. On the fulfillment side, we've got, again, intense use of technology and analytic solutions across the value chain. This is a view of some of our factories. We have automated systems to monitor processes, process parameters, manage utilities. We've got extensive use of AI for optimizing processes, coming up with golden batches. There are IoT devices for predictive maintenance. We also use a lot of vision analytics to ensure quality. There's a fair amount of robotics in our manufacturing process, which helps improve productivity of repetitive processes.
We just put in place an automated manufacturing and logistics facility in our factory in Pudukkottai. This is a completely. So Hemant talked about the ICMLs. This is attached to the Trichy ICML, and it allows us to ship out the entire range of products effortlessly. Similarly, coming to employee experiences, we've got a plethora of initiatives that are in place for workflow improvements, for creating the digital personnel to look at enhancing the removing automating repetitive tasks and for Employee Connect. And I think all of these go in making the workplace smarter, faster, and more effective. In fact, right from day one of COVID, we were able to seamlessly switch to an online mode of working, which is now a hybrid mode of working without a single day lost because all our systems were able to transit to a digital form.
We also use augmented skill building, and I think this example was shared by some of my colleagues. All of these digital initiatives, for them to be sustained and grown, you need a very robust base, and that is what we've got with the DigiNext, which is our apex team that sets direction for digital initiatives. We've got the Young Digital Innovators Lab, who come up with different digital business models. They have ways of rapidly validating the model, and then we take it forward. We put in place extensive plans for scaling of people on Industry 4.0. We have a community of practice. Most of our industrial engineers are on this community, and they're constantly evaluating and adopting new technologies. We have the Digital Analytics COE. It's very well established in the paper business, and they're running multiple projects across the organization.
It's being set up in the FMCG business, and we've got a multitude of projects already identified and action. We've got a digital academy for building digital skills, and we also work with global faculty to try and refine some of these models. To enable all this, we've created our own D2C platform, which is the ITC eStore that allows us to connect directly with consumers. We are also partnering with startups both through direct and indirect investment. This gives us an opportunity to actually interact with the startups, learn from them, understand business models, and adopt many of these in our own systems. We're also creating an internal startup environment. So we've had this massive competition within the company called Reimagine Next, where we had teams coming up in every business with new ideas, and they've all been enabled to go out and pilot those ideas, the shortlisted ones.
We're also creating digital-first brands and connected communities. Let me take you through the ITC eStore. It is one example of the digital-first brands and connected communities we started during the pandemic. Today, it's in all the metro cities as well as Pune, Ahmedabad, Nagpur, Lucknow, and Indore. It really showcases the full range of ITC products. There are three challenges when you run a direct-to-consumer channel. One is, how do you manage the cost of fulfillment? I'm happy to report that we today have that under control, and our cost of fulfillment is extremely competitive. The second challenge is, how do you acquire consumers? We're constantly working on ROAS, and all the first-party data that I talked about actually goes towards reducing the cost of customer acquisition. As we kick in with the lifetime value of consumers through a robust loyalty program, that cost drops even further.
So we're well placed to connect with consumers and expand our eStore. If you look at the new generation of consumers, you go from products to giving the consumer control over what they buy. So you will see increasingly that there are new configurable, personalizable products. The classmateshop.com allows you to choose the notebook cover that you want. It's digitally printed and couriered to you, and this is becoming extremely popular. We have the Dermafique Smart Skin Advisor, where this is an AI-based app. You take a selfie of yourself, and then the skin analyzer analyzes your skin and gives you a recommendation of what products would be most suitable for you. It looks like things like pore size, sebum, hydration levels, and all those parameters. So the future is about not just static products, but allowing the consumer to discover the best product and experience for themselves.
We're then moving on to digital-first brands. These are brands that will be entirely marketed in the digital space. Dermafique has pivoted to a digital-first brand, and we're also working with startups like Mother Sparsh, who have an entirely digital model of creating brands and marketing brands. Finally, to end, I think today, if you look at ITC, the strength of ITC is our ability to leverage our synergies that lie across multiple business divisions. For example, the foods business succeeds based on the strength of our procurement, agri-procurement, the strength of our hotels' businesses to come up with the right formulations, cuisines, understanding of cuisines, matching it to tastes, and the foods businesses' ability to execute, market, and trade marketing, and distribution's ability to reach the product. And all of these are powered at every node.
And I don't have the time to go through every single node, but you will find that there's intense use of technology and AI models in every node to drive the business forward. And I think this will make all the difference in our performance in the market. Thank you.
May I now invite Mr. Nazeeb Arif, who is Executive Vice President and Head of Corporate Communications, to walk us through the next presentation, which is on sustainability and how ITC is raising the bar with regard to ESG? Over to you, Mr. Arif.
Thank you very much, Karthik, and very good afternoon, ladies and gentlemen. It is a privilege to share with you ITC's sustainability journey, a subject that we are immensely passionate about, and as I do so, I'm cognizant of the fact that I stand before you and between you and the question-and-answer session that all of you have been waiting for, so I'm going to be condensing this entire journey of about 20, 25 years in about 20 minutes, and a journey that we believe is the core foundation of what makes ITC and its businesses future-ready, so sustainability in ITC is not a bolt-on, but it is ingrained in the DNA of the organization, a DNA that is inspired by a credo of Nation First, Sab Saath Badhein, where we all collectively work towards creating enduring value that we see in our logo for all our stakeholders.
This is a kind of philosophy that has driven ITC over the years to get the kind of exemplary performance that Chairman had spoken to you in this presentation, carbon positive for 16 years, water positive for 19, all solid waste recycling positive for 14 years. It's very encouraging to see that despite the growing footprint of our businesses, over 41% of our total energy is today from renewable sources. Even more important for a country like India, six million livelihoods have been created by the business models that we have followed. Very recently, Chairman has articulated the Sustainability 2.0 vision, a vision that is going to raise the bar as we meet the new challenges of a post-pandemic world with very bold and ambitious goals for the future as well.
In this journey, we have been fortunate to get several awards, whether it is for our business models or for our governance or for some of the work that we have done with millions of farmers. And as Chairman pointed out in the morning, some very global recognitions for the work that has been done, whether it is the leadership positions in the MSCI, ESG, or the CDP, the Alliance for Water Stewardship. And as the world moves toward net zero, the fact that some of our hotels have been able to become zero carbon certification as well. Now, what has been behind this is a very compelling vision, a sustainability vision, which was shaped by some of the core challenges that we saw over the years.
One of the core challenges that you see today, which has got aggravated, is the big elephant in the room where the world has pressed the code red button on climate. It's the emergency at this moment. It is an issue that while everyone met in Glasgow recently at the COP26, what has come out is the stark reality. The fact that despite all the efforts that we have done, we are still on track with a 2.7-degree kind of an increase from pre-industrial levels when we should be at 1.5 degrees, which is a critical level to sustain life systems in the planet as well. With all the best-case scenario, what we see today is we are moving towards a 1.8 degrees, which is still higher than where we should be.
The point with this is the stark reality that the pace is increasing so much that climate change is coming home to us. It is here and now. The last seven years were the warmest on record. Global sea levels have been increasing, with many, many affected across the world as well. This has got aggravated by what we see in India as well. If urgent action is not taken, we know that climate effects could lead to 75 times increase in frequency of extreme water events. There could be a 50% reduction in wheat yields. And while there could be an impact on GDP as well, we have the twin situation of almost 21 cities expected to run out of groundwater by 2030.
At the same time, by the turn of the century, more than 12 cities, including some of the most important ones in the country, being submerged as well. Aggravating all of this is the global challenges of inequality and livelihoods. This entire boundaries have been pushed even wider because of the pandemic right now with a lot of livelihood challenges. A recent report that has come out, the World Inequality Report, has reconfirmed once again that half of the global population today possess just 2% of total wealth. Now, this is a recipe for social disaster. The social inequalities that happen as a result of this make societies unstable and obviously are not conducive for business.
The other part of this challenge is that as the world moves into a 10 billion population by 2050, we see National Geographic talking about that in the next 40 years. We will have to create more food than we have done in the last 8,000 years. So there is tremendous pressure with less depleting natural resources to be able to give food security to the millions that will inhabit the planet in the years ahead. In India, the situation mirrors these global challenges. We have almost one-third of the global population resident in India and of the poor resident in India, and we have about 12 million of the workforce youth who join the workforce area, putting pressure on the livelihoods that we need to create year on year. Looking at these challenges many years ago, ITC redefined its vision with a paradigm of what we call Responsible Competitiveness.
We are extremely competitive in all our businesses, but in a way that we protect and nourish the environment and also generate livelihoods. And this was a model which inspired us, which spurred us to create unique business models which would synergistically deliver all these three things together: economic capital, environmental capital, as well as social capital. And in doing so, we created a whole framework, which we went and did a deep dive on what were the materiality issues, what were the risks and opportunities. We did stakeholder engagements to be able to come up with a sustainability journey that would be meaningful for all these stakeholders. So let me give you some examples of this in action. As I said, the elephant in the room is climate change.
So we address this through six broad pillars, and I'm going to take you through some of them: nature-based solutions, adaptation, inclusive value chains, green infrastructure, decarbonization, and circularity. The first one, our nature-based solutions, I'd like to give you a case study of our paperboards business. Today, as you're aware, it is the leader in this industry. However, 20 years ago, around that time, it was heavily challenged for many reasons. One was for the lack of fiber, wood pulp in the country as well, and of course, cheaper imports of finished products. At that point of time, we had the option of an easier option of looking at imports of pulp at a lower duty, but we decided to take a less traveled path of actually going into large-scale forestation, which has held us in good stead today.
We did research to grow 125 types of clonal saplings, which could grow in wastelands. India, as you know, has large tracts of wastelands, which are owned by small farmers and tribals as well. We took these saplings, which were as a result of many years of research, and gave them to the tribals to grow in their wastelands. You see at the top, the first round of harvesting which takes place, we use one out of four standing trees. Every year, you have this cropping activity, which leads to livelihoods and also green cover. Today, this activity, after many years of efforts and initiatives that we have been following for years, has led to large-scale forestry. You can see this video where you can see some of the clusters of the forest that we've been able to build over time.
It is said that India's greenhouse gas emissions have been able to be where it is today also because of some of the contribution these large-scale forests have done. We have been able to supply more than 1.5 billion saplings. That is more than actually all the citizens of this country as well, and that gives us immense pride, and it is an area that continues to grow for ITC as well, lending strength to our business. As a result of this, we've been able to green over time 900,000 acres. This has not only made our businesses competitive, and one of the reasons why today it's a leader in that industry, but also supported 165 million person days of livelihood, of employment, and as well as creating a large environmental impact, the reason why we are now carbon positive for more than 16 years.
This triple bottom line performance is, again, one of the examples of the vision that we had put in place over the last couple of years. Going forward, we've also looked at agroforestry because not only having the trees, but intercropping with other crops as well so the farmers can raise incomes from there. Moving on to another area, nature-based solutions. Biodiversity, as you know, is very important for sustaining lives in this world. And we have done a huge amount of work in this area as well, already about 81,000 acres, which we've been able to conserve. Our Sustainability 2.0 vision that Chairman has put before us looks at 500,000 acres by 2030. Already looking at the kind of benefits that we've been able to do from a baseline, improving green cover by 110%, tree species by 150%.
We are very confident that in all the PPPs that we've been able to do with various state governments, this is another area where we would be able to make some meaningful contribution as well. Moving on to adaptation and resilience, and there are two areas that I would like to focus upon. One is internal, and as you know, because of extensive operations of ITC, whether it is in factories, warehouses, or hotels, the footprint is pretty large, and some of them could pose their vulnerabilities because of climate risk as well. So we've done long-term studies, long-term risk studies with climate experts looking at climate and risk vulnerability, and we've identified issues looking at several variables, whether it is temperature, whether it is precipitation, whether it is sea level increase.
For each one of them, we have developed scenarios by which we can adapt to these issues and also become more resilient. These are issues which we have done internally. We also have, of course, in the short term, business continuity plans which will help us deal with any extreme weather events that happen from time to time and with increasing frequency. In the external stakeholders, second point that I was going to press upon in adaptability, water, as you know, and we are a company deeply engaged in agriculture. India today, 54% of the country is water stressed. Looking at this critical area, we have been working on it for several years in water stewardship, looking at both the supply and demand side.
We used to go to our areas, and you can see in our fields where a number of areas that we used to go into, where farmers used to tell us that the last time we saw crops was during our grandfather's time. And that was one of the reasons was, of course, water. And when India looks at the 1.5 billion livelihoods, looking at 1.5 million people, food security is going to be very, very critical. We looked at participatory watershed planning where we involve water user groups, villages from the community to identify aquifers and do watershed projects in those areas. And this has led to a large number of projects, almost about 23,000 water structures, which today bring soil and moisture conservation to about 1.2 million acres. And these kind of structures that you see run for almost five kilometers long.
Many years back, when I used to say this, people would not believe it. So I will show you a drone shot of this watershed. This is not a river. It is a man-made watershed project along a natural course of a river which had dried up. Now, what you can see is miles and miles of water. This is collected when there is rain. And what this leads to is that for an area which was otherwise barren, 300 villages get water. There is productivity. There is agriculture. Incomes rise up. And in this kind of a project, and you see many of them, you see huge transformation that has taken place across villages, leading to rise in incomes and, of course, prosperity for some of the bottom of the pyramid as well. As we were doing supply side, we also saw the opportunity for demand side.
How do you use water more efficiently? And some of the projects that we did over the last two years have been extremely encouraging. We looked at about seven crops in those areas, more crop per drop, as they say. And the water savings that we've been able to do in about a year is almost equal to the harvesting that we have done from the supply side for 20 years. This shows the kind of potential. This has been a pilot at scale at 300,000-odd acres. And this shows the potential of water use efficiency and what can be done in those areas. Coming to farmers, our deep engagement farmers for a many number of years where e-Choupal was the linchpin of the entire work that we do with rural communities. We work on a two-horizon approach.
The first horizon is securing and enhancing the wealth-generating capabilities for today, strengthening those and making it more sustainable. And horizon two, really looking at building capabilities for the future in terms of wealth-building capacities for the future as well. So in the first aspect, looking at the entire experience of e-Choupal over many, many years, we've been able to do several programs. I'm going to call out three of them. One is Baareh Mahine Hariyali, which we did a pilot at scale with about 200,000 farmers looking at how we could have agriculture all throughout 12 months of the year.
Mahine Hariyali, which looked at the plethora of interventions, whether it is varieties, whether it is various other issues of farm mechanization and zero tillage, has led to doubling income for 35,000 farmers and for the rest balance of farmers who did not adopt all the practices but adopted many of them. We also saw the farmers' income rising by about 30%-75%. The other aspect of this knowledge bringing into, we've brought it to the NITI Aayog programs for 27 Aspirational Districts where we trained 2.5 million farmers even during the pandemic where we could not go onsite. We had to create 6,000 WhatsApp groups using digital technologies that even Sumant talked about a little while earlier to be able to train those farmers, which again resulted in a 60% increase in yields in those areas as well. The third area is climate-smart agriculture to build resilience of farmers.
As you know, agriculture is one of the most vulnerable to climate change. This pilot, again, that we did at scale with 250,000 farmers led to encouraging results, 47% reduction in GHG emissions, at the same time enhancing returns of farmers by 41%-87%. Looking at this, again, Sustainability 2.0 vision that we are doing, we plan to extend Climate Smart Villages to about 3 million acres by 2030 and therefore providing far more security, far more livelihood security to farming community as well, and this security of livelihoods, livelihood security too has also been accentuated by the inclusive value chains that our brands have been able to anchor for many years, the wheat value chain, the potato value chain, the milk value chain, spices, the paperboard, agarbatti, and so on and so forth.
So these are also by driving competitiveness across the whole value chain, looking at the kind of the brands as they are growing, they're also supporting millions of livelihoods across the value chain, and it's going to be an important part of what we do in the future as well. Horizon two, as we talk about doing things for the future, we have worked on education, we have worked on various other areas, and we've seen transformational change. I would take probably hours to tell you about the kind of things that we're seeing. They're so inspiring on the ground to be able to see that kind of change in front of you, increase in the kind of education, reading expertise, and the numeracy skills. We look at training, 100,000 youths trained, make them more employable.
They're being able to get jobs across, even if they are from the villages. They've been able to find jobs across even in other cities as well. Women empowerment, inspiring stories all throughout. I mean, where we work with ultra-poor women, these are women-headed households, and there we have seen their income increasing by eight times, asset value increasing by three times. These are things on the ground when you go to. I still remember a lady where we did agarbatti rolling a long time back, lost her husband that time, five children. As we were talking to them, she lost even her elder daughter to poverty. Two years later of agarbatti rolling, and we saw her building a two-story house. Today, I understand that one of our children, one of our sons is going into engineering.
That is the kind of transformational change that you can see on the ground by anchoring some of those value chains that we have all across. Livestock is again another area which is after farming activity, one of the largest. Again, we've seen huge growth here where farmers have been able to generate more income through additional sources of income because farming also can be very vulnerable to climate change. So these are all how you're providing security for the future as well. Sanitation was a big issue. The country launched this Swachh Bharat Abhiyan. We also created huge amounts of sanitary units across the country, especially in rural areas. And we are very happy that today 96% of all these toilets are used and not only used, but used by all the members of the households, which was not a situation before that.
So huge scale and impact of whatever we've been able to do on the ground because of the scalable and impactful models that we did. And in this, we have been able to do so amplify this with the help of partnerships, 83 partnerships with state governments, with various other bodies as well, and also knowledge from some of the best in the world and best in India and execution from best-in-class NGOs, which has allowed us to bring to the table diverse skills to be able to amplify what we are doing. Another area in climate change, when you talk about green infrastructure, we have invested over many years on green buildings.
Today, we have about 33 platinum-rated buildings, not only some of the most iconic hotel properties that you can see, but across our factories, across commercial venues, across residential complexes where we have been able to create iconic green buildings which India can be proud of, and today, taking the renewable energy side, today we have invested quite heavily. What you're seeing on the screen is again a very recent solar farm that we have done in Tamil Nadu, about 15 megawatts, which is going to power, which is going to shift our grid electricity to renewable energy in manufacturing, in packaging, in hotels, and so on and so forth, so these are all heavily invested in renewable energy, which will hold us in good stead in the years ahead.
In fact, the renewable energy load today is already running electricity in many of our hotels, which is again one of the first in industry in that sense, so in decarbonization, whatever we are doing inside our units to make it more efficient in terms of energy and water, reducing distance to market from the ICMLs that my colleagues spoke to about, but Sustainability 2.0 will also raise the bar here where we are saying that from the current 41%, we'll go to 50% in terms of renewable energy by 2030. We are going to make 100% of all grid electricity from renewable sources. We will reduce our GHG emissions by 50% and also reduce our specific energy by 30%. These are stretch goals, Sustainability 2.0, but we are very confident that with the experience that we have, we will be able to reach there.
Circularity, one of the last pillars of climate change that I wish to talk about, it is again a very large area of concern. Today, the way if we go forward with the current level of waste, it is said that we will need six Chandigarhs to create a landfill. And so therefore, for many years, we've been working on what is on two fronts. One is, of course, the Well-being Out of Waste program where across communities, today 15 million citizens, we help in raising awareness, doing segregation at homes, tying up with municipal bodies to be able to deliver those kind of products to recyclers, and also end-to-end value chains right up to recycling. A very important project there, multi-layered plastics, which is thought to be difficult to recycle.
With LSTC, we've been able to do a pilot plant in Pune, which is now also converting some of these plastics to granules for products of plastics of daily use. The other part is the community waste management programs that we do. There also, we have been able to reduce the waste that goes to landfill from 80% to about 20%. Again, along with that is the Green Temple program, which has gone to about 226 temples. A lot of flowers are given by devotees in these areas. Some of them are being converted into biogas and other compostable kind of products that we can do there.
And the other part is also the way we've been able to generate rural livelihoods by looking at some of those temples and using the fragrance of those temples, rolling them into agarbattis with rural women to be able to also tie up with those kind of temple trusts and contribute to society there as well through our agarbatti value chain. Chairman has spoken about this. Our paperboards are looking at the next trajectory of growth to sustainable packaging. Already several brands are out in the market to replace single-use plastics. And I'm certain that in the years ahead, you're going to see this as a new vector of growth as well. Now, running all this, all this sustainability is a very robust governance framework, which starts from a Board oversight with Board Committee on CSR and Sustainability, which reviews the performance annually.
This is also then reviewed by the Corporate Management Committee, the strategic management function of ITC, which reviews it every month. There is a Sustainability Compliance Review Committee which supports those activities by monitoring, reviewing, inspiring those activities. At every business level also, there are business-level sustainability committees really making a comprehensive network to be able to deliver the journey that we wish to. All these are driven by very extensive policies, written-out board-approved policies, which addresses those ITC's material issues. These are monitored by very well-defined KPIs, which allow us to look at where we are going and how we should do this. All this that I spoke to you about is disclosed in our very transparent reporting that we do. ITC Sustainability Report has been there for the last 18 years, even before sustainability reporting was in vogue.
We've been doing this for many years. The ITC Integrated Report and, of course, various other reporting that we do across platforms, and these are again benchmarked to global kind of standards in terms of TCFD and others, so finally, ladies and gentlemen, a summary of all these Sustainability 2.0 goals, which we believe are going to raise the bar not only for us, but enable us to contribute more effectively to the future. The whole range of issues in meeting climate change, in looking at livelihoods, and all through a very robust governance network, meeting all the parameters of ESG in the best possible manner, so therefore, as Chairman said, a company with a passion for profitable growth, but in a way that it is sustainable, inclusive, a strategy that we believe will lend us immense strength as we meet the challenges of the future.
In this journey, we will always look forward to your continuous support, goodwill, and advice. Thank you very much, ladies and gentlemen.
Thank you, Mr. Arif, for that wonderful presentation on sustainability. We've now finished all the business presentations, and we'll be going into the Q&A session pretty much soon. So welcome back, everyone. Thank you all for being with us right through the day. I do hope the presentations give you a very good inside view of ITC and what lies ahead. We have received over 100 questions. Our team has been busy bucketing these questions received throughout the day. At the outset, let me thank the gathering here for such involved participation. Let me first take a few business-related questions before we take overall questions related to ITC. The first question is, the first set of questions is on the cigarettes business. An expert panel has been constituted by the Health Ministry to recommend a taxation structure for tobacco products.
What's the company's perspective on this, and how should investors think about growth prospects? Has there been a dialogue with the government on reasonable taxation policy? This question has come from several analysts, including Edelweiss, JM Financial, Jefferies, Investec, Centrum Broking, Spark Capital, and YES Securities.
Okay. Thank you, Karthik. So this dimension of the Health Ministry making recommendations on taxation is a regular event. It is not that this is the first time it has ever happened. We understand that this is an aspect that is on which recommendations are made on a regular basis, I would say an annual basis. Second, this time, the focus is not merely on cigarettes, which has received the brunt of taxation. It is for all tobacco products. It is a much wider area that it's being looked at. The figures of 75%, et cetera, that are being quoted in some media as a recommendation of WHO, this is a continuing kind of position. It's not something unique or just suddenly happened.
And in the process of looking at taxation, the Finance Ministry does receive recommendations from various stakeholders on many facets, including this particular category, including the fact that the Tobacco Institute of India also makes its presentation. So all the inputs are given, and it's for the then the ministry takes a final view on what has to be done. And as we have shared some data in our presentations that during periods where taxation went up at a steep rate of 15%, revenue collections grew only under 5%. And in periods where there was stability, the legal industry was able to claw back, and revenues grew at 10%. We've also spoken about the extent of seizures that are happening of illicit products. In fact, there is hardly any day where media does not cover it.
I think there has been also a Parliament question where the data was shared on the extent of seizures that shows how cognizant the enforcement and policymakers are of this menace that is coming and the impact it has not only on the revenues, but also on farmers, which are a large stakeholder in the economy. One would hope and expect that all these data points will be considered when an appropriate decision be taken, looking at all the facets. Given this data points and information available, I think we should expect these to be taken on board for a reasonable view on that perspective.
And if you may also, just to mention, take a note that while taxation has been a serious concern, it's been a bigger concern in the period between 2011 to about 2015, 2016, and then also during the GST transition, which, as per the reports that are available, was intended to be a revenue-neutral transition. First, it turned out to be a transition where there was a lower rate of taxation. And then in the second change, when the attempt was to make it revenue-neutral, it actually became higher. So that was not an intended as per the statements that are available. And then after that, we've had in February 2020. So it's been a little more, I would say, the recent experience has been that it's a little more paced out.
I hope that this is on account of the awareness of the challenge and issues that surround this industry. There have been other factors that have impacted this industry during this period, which is more to do with the disruptions on account of the pandemic. Given the circumstances and the data available, the information available, I hope all that is taken into account and a more reasonable perspective emerges out of all the deliberations and decision-making.
I move on to the next question. There are two questions. I'll probably cover one after another. One relates to illicit cigarettes, which you briefly touched upon. The second question first is, do you see GST Compensation Cess being extended beyond 2022? What would be the likely taxation structure for cigarettes after the Cess is discontinued?
Okay. So as far as the compensation cess is concerned, it is meant to be till the middle of 2022. Anything beyond that does require a constitutional amendment. What we understand is that I'm sorry, let me correct myself. It is supposed to be there till 2022 to compensate states. And any requirement to compensate states beyond 2022 requires a constitutional amendment. However, there can be a modification to the act to extend the levy of the compensation tax to pay for or to take care of the interest and loans that have been taken on account of the revenue shortfalls that have happened during the pandemic period. So to deal with that, I believe the levy will stay for some more years. And there is no information available to suggest that there'll be any further attempt to compensate losses or compensate states beyond 2022.
In fact, the issue of lower revenues is being addressed by looking at the overall rate structures and the rates across categories where there is a group that is working and looking at that area.
Thank you, sir. The next question relates to illegal cigarettes on illicit cigarettes. These have grown sharply in the last decade, which was also covered in the presentations that the businesses made earlier. How are the trends now? Also, can you please give any specific color on the company's engagement with policymakers on this issue?
See, during the recent past, which is really the period from March 2020 to now, I think the period has been marked with disruptions to the economy and disruptions, particularly to items like cigarettes. And they are well on, as my colleague Sandeep shared, the recovery has been quite robust this year as compared to the prior year. So that's been, I would say, the dominant issue in the last couple of years. Prior to that, I did share data that in periods, and that was a period when we experienced some stability, that revenues actually grew by about 10%. And that is largely volume-led because there was not much of because taxes did not go up. It did not change prices materially. So largely volume-led growth during that period. So that's the correlation. That's the correlation. This is a very recent data.
The reason I also explained earlier was that cigarettes is just 8% of the tobacco consumption. There is some interplay between illicit and legal cigarettes and also other forms of consumption. In periods of stability, we do find that the legal cigarette industry is able to claw back, particularly from illicit, and that's what we experienced in the past. With stability, we do expect the volumes to firm up. With the economy also stabilizing, the high-frequency indicators doing well, well above some of the indices are well above the pre-COVID levels. I think this augurs well for the economy as a whole and for this category also in particular.
The next question relates to structural decline. Basically, the question says, we gather that cigarette volumes are back to pre-COVID levels now. But do you think there could have been structural decline during the pandemic, whether due to work from home or from other reasons? If so, to what extent? And how do you see growth in volumes going forward? Has there been any mixed impact? How should the investors think about conversion from other tobacco forms to cigarettes?
Okay. First of all, we have no data to suggest that there is any structural change. Rather, I would say the robust recovery that we are seeing does seem to suggest that it is kind of normalizing. It is really normal to what it was prior to COVID. Yes, during the disruption, there is some impact because there is some correlation between mobility, correlation between going out to, and because this is also a category that is perhaps the most often transacted category because it's not something that you stock up for a week or a month or something. It's a daily stock up, sometimes even more than once during the day. So mobility, et cetera, tends to impact, tends to kind of create some disruptions or create some lower velocity of sales during some period of time. But structurally, there is no evidence with us to suggest that.
In fact, we are only seeing that it's getting back to where we were. It's getting back to where we were. And as far as interplay with other categories is concerned, volumes going forward, I think I've largely covered the whole philosophy in my earlier answer.
Okay. Thank you, sir. The next question relates to we did not see any price increases after the last increase in February or March 2020 after the taxation change. How should investors think about pricing as a lever? Will pricing lever be used only when taxes increase? What is the company's view of the management on this?
Okay. So I think in the just going back to your earlier question, I think there was an element on the mix which I may not have addressed. But as part of this question, I will address it. As we explained during the day, I think the imperatives for us is, one, to maximize the potential of the cigarette category within the basket of tobacco consumption. And number two is to fortify market standing and also to counter illegal. These are the kind of objectives and priorities we work with. And to enhance value capture and to deal with these objectives, there are levers of innovation, brand portfolio, accessibility, execution at the last mile. These are the levers that we use. And more specifically, as far as value capture is concerned, the levers are pricing, mix, volumes. These are essentially the levers.
We deploy a combination of these levers, a combination of these levers. Now, when there is tax stability, we do find that the industry is able to claw back, claw back from illicit industry, able to claw back from other forms of tobacco consumption. I believe during that period of time, of course, this is not a cookie-cutter answer. It has to be contextual at that point of time. As a broader principle, mix and volume are better weapons at that point of time. When there is tax increase, you need to pass the tax increase onto the, I mean, you have to pass it on into the price. That's where the pricing lever becomes more important. You work on pricing, you work on mix, volume becomes a weaker lever at that point of time. You have to play with these levers.
And I might also add that during this period, what we are finding is that there was a question on mix. I think the mix is getting richer. It is getting richer. Of course, stability is helping. In addition to that, I think the sharper execution of innovation, and there have been some very interesting innovations in the recent past that are helping this. So I mean, the premiumization is certainly mix is getting richer, backed by innovation and backed by better accessibility to this innovation. So the last-mile execution of the assortment also has significantly moved up. That is helping us to improve the mix.
Thank you, sir. The next question is on electronic nicotine delivery systems. Is the ban on e-cigarettes, e-vaping, and heat-not-burn products, et cetera, likely to be lifted? How does the company view this segment, and how would it respond if and when the ban is lifted?
It's difficult to do kind of crystal ball gazing on what is going to happen. However, let me make the following points. Number one, recently, as part of the COP meeting or an outcome of the COP meeting, I think the position that WHO has taken is that evidence is not adequate on its harm reduction, and there are certain risks associated with the other categories as well. Number two, India is not the only country to have banned it. There are many countries that have banned it. Number three, in India, when the ban was done, one of the concerns was that these could act as a gateway product, and such similar data had come out from other parts of the world as well.
Having said that, and we do recognize that it is impossible for us to predict what would happen in the future, it's always possible that a change could happen. And it is also possible that the change could be the other way around globally. So we do not know. As an organization, you have to be prepared to be able to play in whatever is legally allowed. We were into this category before the ban came in. And we also had developed some advanced systems before the ban did come in. And our endeavor is to be in touch continuously, be engaged in this, I mean, be aware of what is happening, and also build our capabilities so that if and when, or if and ever this has ever opened up, we should also be able to, we should also be equipped to play in this category.
Sir, with your permission, I'll now move to the FMCG segment. The first question is on the immense cost pressures in the FMCG industry. What is the company doing to mitigate the impact on margins?
So Supratim, would you like to take this?
Yes, I think it has been touched upon in the previous presentations that we are seeing unprecedented inflation in commodity prices, whether it's edible oils, whether it's kraft paper, whether it's crude palm oil and soap noodles. I think all of the large commodities have seen huge inflation. But I think the good news is that we have been able to mitigate the impact of cost inflation very effectively so far. It's been a challenge all right, but I think we've done a pretty healthy job of retaining our margins or sustaining them at about 9% EBITDA for the FMCG segment for the first half.
This has been possible because we've kind of looked at every element of the P&L, whether it's promotions, trade promotions, whether it is getting to the market in a more sharper way and looking at more effective ways to communicate and therefore get the best bang for the buck in the circumstances, whether it is leveraging some of these structural interventions that we put through in the previous years, whether it's shortening distance to market, whether it's really acting in a very agile manner in the marketplace. These have all helped us to kind of mitigate the challenges. Of course, we've also been active on the pricing side, but we've been judicious there in the scheme of things because we don't want to also destroy demand. And where we have market-leading positions, we've also actually initiated some of the pricing changes.
So like I said, I think it's been a holistic way to look at it. And the good news is that we've been able to kind of maintain margins at 9%. Of course, the challenge is not over. I think the year is still six months down the line. We have to see how we end the year. But this has to be seen more as an aberration. It's not something that is hitting ITC only. It is true for all industry players. And I think you've seen that in all the numbers. So our endeavor is going to be leveraging all possible fronts to mitigate the challenge. Like I said, all these measures are still being put through. We've taken some more price corrections. And I think we will be able to kind of do the best going forward as well.
Chairman's presentation in the morning also talked about extreme cost focus, so some of them are obviously structural. They're there with us, and there are some that we've done tactically to deal with the problem, so I think as a combination of all these factors, we should be able to kind of mitigate the challenges that we have in front of us.
Thank you, sir. Moving on to the next question.
There are some categories in your FMCG businesses which are still low on scale even after three to five years in your portfolio. How do you evaluate your portfolio choices? And when would you take a call on retaining or discarding these categories? A supplementary question. Why are we into so many categories? How are we thinking about scaling up newer categories? This question has come from several analysts, including IIFL Securities, Ratnabali, Carnelian Asset Advisors, Investec, and so on.
So as I said in the morning, the aspiration was to build an FMCG business of scale and to do it quite rapidly. That is the aspiration with which we started. And to do so, we said we will leverage institutional strengths. Now, in this context, I explained in the morning our portfolio perspective. Number one, we're saying we have certain power brands in our portfolio like Aashirvaad, Sunfeast, Bingo, YiPPee!, Classmate, Savlon, and so on and so forth. So we will scale and fortify these brands. We will invest behind these brands, much sharper innovation in these brands. Second, we are going to use the strength of these brands to address adjacencies.
For example, Aashirvaad, which is a strong center-of-plate brand, is straddling certain additional areas which are more value-added adjacencies, be it vermicelli, be it organic pulses and atta, be it gluten-free atta, be it Sugar Release Control Atta, be it salt and spices, or for that matter, ready-to-eat meals, et cetera. So it is straddling certain adjacencies. And similarly, Savlon has also straddling some more vectors of innovation, as my colleague Sameer also explained in the morning. So there are the power brands which are being scaled up. Number two, we are using the power brands to get into adjacencies. These adjacencies are not necessarily pan-India. It could be with regional focus also, depending on where we see the market opportunity. And the third piece is about building categories of the future.
Within the categories of futures, there are stuff like Nimyle, like ITC Master Chef, or B Natural, which we are building at a pan-India scale. There are other pieces, like maybe Sunbean Coffee. We are testing these. We are piloting this in certain beachheads or dairy, for that matter. We are piloting them, testing them in certain beachheads, establishing the right to win, establishing the business model that will give us, that will be value-accretive when we were to scale up. So once we have fine-tuned this model, we have done the experiment, we are through with designing our business model, and we are ready to roll out. At that point, we'll take a call when to roll out and when to scale it up. Because we have also said that at a point of time, we want to do only a scaling up of a certain number of categories.
We don't want to scale up everything at the same time, but we will keep on experimenting. We'll keep on learning. We will develop capacity. We will understand category nuances for newer areas, build the expertise, and because we do it in certain focused geographies and not everywhere, there is a focused attention on it, and there are separate teams that will deal with it to ensure that the focus from other categories is not taken away. That's the philosophy we have. Because we do want to build a much larger FMCG business so that it becomes a substantive economic engine, commensurate to the size and scale of what ITC is today, so that's the reason we are building many categories together, and we have certain institutional capabilities that will help us build it, so that's the way we look at it.
Thank you, sir. I'll go on to the next question. Several analysts have asked about ITC's FMCG businesses' margins. While they are improving, they are still well below other FMCG players in the industry. What could be the reasons, and how should investors think about the trajectory over the next three to five years? By when do we think EBITDA will reach higher levels, early teens, mid-teens? Any guidance that the management can give? This question has come from several analysts, including analysts from Credit Suisse, Investec, Carnelian, and ASK Investments.
So Supratim, would you like to take this?
Partly, the chairman already explained the reasons why the margins are slightly lower than the FMCG peer set. We've been obviously building this FMCG engine for growth for ITC. We are relatively new starters. We have a clutch of brands. Some are mature, some are emerging, and some are nascent. So I think when you look at it together, you see a 9% EBITDA margin. So some of the more mature brands, and I think Hemant's presentation showcased some of the power brands that we have in foods, they are of a much better kind of a margin profile in the double digits. And I think the kind of movement that we've had in the last three or four years has been really appreciable. We made solid progress on the bottom line from a margin perspective.
And like I mentioned before, we have a set of structural interventions that are coming to life. As we are getting more scale, we are able to deploy some of those in the marketplace more effectively. And that's why you're seeing that the margins are actually still kind of getting sustained despite such inflationary pressures. So we cannot give guidance as to where the margins are going to be headed. But we can only say that we are confident of maintaining the trajectory. Of course, this year has been a bit of a challenge, like we mentioned in the morning as well. But I think the structural drivers of margin expansion are very much in place. And as the brands gain scale, we should see the trajectory kind of sustained, getting better. So that's one.
So I think overall, to say when exactly it's going to be 13%, 14%, 15%, we don't give that kind of a guidance. But you'll have to take heart from the kind of movement that we've delivered in the recent past. And that should give you some kind of an indication. Our aspiration or our commitment, like the chairman mentioned in the morning, was to grow the top line in the top quartile of industry. So really peg it at that kind of a level. And with sustained margin expansion, we should see our absolute EBITDA also growing substantially in the next two to three years.
Thank you, sir. Move on to the next question.
Certain categories like biscuits and hygiene products were helped last year because of increased at-home consumption and pandemic-related tailwinds. How does the company think about increase in market share and then growth in these categories?
That's a good question. And I would say that it's not just mainly about biscuits and hygiene products. Even other categories like noodles, categories like ready-to-cook, ready-to-eat, some of them experienced heightened consumption, a surge in demand. So certainly, more people got exposed to the categories. And more people got exposed to our brands. So this does help in two ways. It can lead to a heightened awareness around the benefits of certain categories. And that can sustain. And second, it leads to a larger number of consumers having experienced and tried our products. So for example, while the spike that we saw in the hygiene products has moderated, but it's still settled at a much higher level than what it was pre-COVID. So category as a whole has expanded. And that offers opportunity.
Our endeavor, and in many categories we have seen, our endeavor is to grow ahead of the category growth rates. Our market standing improves. That's the focus with which innovation and new products and distribution is scaled up.
Thank you, sir. Moving on to the next question. How is ITC gearing up against possible disruption to its key institutional strength of distribution with the possibility of digital disruption by certain eB2B players? There is a genuine concern as to what would happen to traditional distributors. What is the company's perspective on this?
You see, we have to be available in all channels from which consumers buy or trade buys. So therefore, we are available and we will be available in all the channels. Now, each channel has its own uniqueness. Each channel has its own nuances. So one has to understand that and create a service pack that is relevant to that particular channel in terms of servicing, in terms of assortments, and so on and so forth, and all these interventions have to be taken to ensure that we sustain a better position in these channels. As far as general trade is concerned, and this is the backbone of distribution today, it's a very large segment, and it's serviced largely by company distributors, so this channel is here to stay. It is dominant. It will continue to be dominant.
And as our partners, we work with all of them in helping them enhance their capacities, in training their field force, in helping them organize themselves better through better ways of managing inventory. For example, we have a lean inventory model with all large distributors. We're also helping them digitize with various apps and systems that we have developed over a period of time. And we will continue to work with them to help them build capabilities and help them strengthen their value proposition to the retailers. We've also got on the app, we've also got solutions for retailers to be able to get access to credit on the same app that they order. So a variety of actions are being taken to strengthen the value proposition of the general trade. They are the backbone, the long-standing partners.
We'll continue to work with them in mutual interest, help them build their business while we have clear strategies and a clear position. We will play in all the other channels also.
Thank you, sir. The next question is from Edelweiss, an analyst from Edelweiss and HSBC Securities. This relates to e-com salience, which has grown in the last two years. How is the company positioned in this fast-growing channel? And what are your plans to win in this channel? As D2C is a digital focus, what could it look like in the next five years?
Yes, we have grown quite well in e-commerce. And we are going to continue to invest behind e-commerce. At an aggregate level, we are at 70%. In some businesses like personal care, it's already in double digits. We have dedicated teams to deal with e-commerce. We're equipping our e-commerce teams as also a larger community within ITC on cutting-edge skills to win in the e-commerce channels. We have brought in the global best to provide training to our employees. And as I said earlier, each channel has its own nuances and own unique strategies and interventions to win in this channel around assortments, around the way you market and communicate in the channel, around the manner in which you service these channels. And all these elements are taken on board.
And we have a joint business plan developed along with these channel partners to ensure that we stay ahead of the curve. So we will invest ahead of the curve in this channel for sure. As far as digital-first and D2C is concerned, I think I would say we have made some progress. And during the pandemic, actually, the progress has got accelerated because digital adoption happened at a very rapid pace during the pandemic. So some of our brands have actually pivoted to become digital-first brands. We also launched a D2C platform, which is the ITC eStore. We made some investment in another company. And outside of FMCG in agribusiness, we are also building a platform which is called the ITC MAARS. So this will be an area that will certainly see increased investment.
And I think a greater proportion, certainly, of our sales should come with these digitally enabled channels over a period of time. I'm not going to forecast any number because this also depends on how this channel evolves and at what rate digital adoption takes place. In this space, I think what is important is to have the capability, have the commitment to invest, and be agile, and take stock frequently and recalibrate investment because it's a space that is fast evolving. And that's the approach that we will take. And our endeavor is that we must win in this channel. Our shares in this channel must be ahead of what we are experiencing in other channels.
Thank you, sir. The next question relates to the staples part of the portfolio. Aashirvaad, the portfolio has scaled up very well. Could you please talk about its margin journey? Also, what are you thinking about in terms of the foray into other staples such as pulses, rice, soya, oats, et cetera, given the success with atta?
OK. The first part of the question, we will take it later, and maybe Supratim can speak about it, really, for maybe some perspective on margins of some of our bigger categories, not mainly foods. We also have Classmate, and we have Mangaldeep, and things like that. As far as the other areas that Aashirvaad will get into, it's a strong center-of-plate brand. It's a very powerful brand. It has a very high SAM and TAM. But we are going to use Aashirvaad to get only into value-added adjacencies. So adjacencies that are value-accretive is what we will get into. And examples of this have been shared during the day. Vermicelli, Hemant talked about poha. Then there is a range of other ready-to-eat stuff. There is value-added atta. In fact, there is ready-to-eat chapatis also, which is being piloted in Kerala because that market is evolving in that direction.
So we want to stay ahead of the curve. So it will be value-added adjacencies, which we will get into. And with scale, mixed enrichment, and the scale leverage, operational synergies will also give us additional margins. Now, specifically on the journey on maybe some of our bigger brands and Aashirvaad, maybe Supratim, you can come in there.
I'll be mindful of not calling out any specific numbers because those are not available in the public domain. So I'll restrict myself to the overall numbers. But just talking about the four or five big categories, like I mentioned before, they've had a very good trajectory in the last three or four years. And that's one of the reasons why you've seen that the overall EBITDA margins have actually improved quite substantially over the last three or four years, like I said, about 640 basis points from FY17. This has been powered by the four brands that we talked about in the morning and also some of the other categories like Classmate, notebooks, et cetera, even the Mangaldeep agarbatti business.
Some of these are in the double-digit margin profile, which is continuously kind of helping us increase the profit pool of the FMCG business and also helping us on the profitability side per se. So I think some of the journeys that are there in the recent past have really got to do with the premiumization of the portfolio, the go-to-market strategies that are involved in all of these categories, and the constant kind of takeout of costs in the supply chain that has helped us in this journey. So if you look at atta per se, I think you have to look at it slightly differently. The name of the game there is to really convert and really seize the opportunity more than chasing a profitability metric as a percentage.
What we're trying to do there in the category, like it was mentioned in the morning presentations, is also to look at the realization per kg, so atta obviously is at a relatively lower NSR per kg. The game within the staples category is really to move up and address value-added adjacencies. And the example of Vermicelli has been already talked about. The endeavor really is to move up the value ladder and really get the NSR per kg up using the Aashirvaad franchise. So the atta , how the staples game is slightly different. We're not really just chasing profitability as a number. We're trying to really maximize the opportunity of a profit pool by leveraging the very strong brand that we've created in Aashirvaad.
Thank you, sir. I'll move on to the next question. Basically, another couple of questions in FMCG before we get into the other businesses.
Obviously, I'm not taking the questions relating to structuring at this stage that I'll bucket and take it at a later time together. Can you elaborate on working capital management measures, given that some of the presentations covered ICML strategy quite well? Can you please elaborate on working capital management measures in the FMCG business?
Supratim, would you like to take it?
It was on working capital?
Working capital.
Yeah. So working capital, I think if you look at our overall, firstly, we don't have debtors. That's a great kind of business model that we have. It's largely a cash and carry kind of model, largely speaking. But for modern trade and some institutional sales and e-commerce, large part of our business does not have exposure to any debtors. What we do have exposure to from a working capital perspective is inventory. We have a lot of inventory on the books because of the atta business. We buy a lot of wheat during the year, and we consume it through the year. Of course, the dynamics of a particular year may be different. But typically speaking, we do buy more wheat at the beginning of the year or the first half of the year, and we consume it through the year.
Overall, from our intensity perspective, inventory is the big one. If you look at our Classmate's business, the stationery business, the debtor's component is high because it is a credit business. The wholesale dealer has to be rotating his money. There is a certain amount of credit that has to be given. Having said that, I think we are looking at a lot of initiatives out here, starting from smart buying to taking the right kind of hedges at the right time, using a lot of technology, a lot of digital to help us guide in that journey. I think these are the interventions we are looking at.
We are also looking at kind of, especially in the stationery business, early collection through incentives so that debtors don't get kind of extended, especially in the uncertain conditions of the market that we saw in the last 18 to 20 months. So we've been quite sharp and agile in the marketplace, a lot of focus on collections in that business. And I must say that even while sales were subdued because of what happened last year in that business, we were able to collect the highest ever kind of numbers in FY21. So I think there's a lot of focus on working capital management. But the big one, like I said before, is the wheat inventory that we have on our books that is for the atta business.
And the enabler game there is to really sharpen the buy, the timing, and also to ensure that we have the right buying strategy from a timing and a geography perspective. And that's where our agribusiness comes into the picture. And what we are doing now increasingly is to use a lot of digital tools, like I said. We have something called Project Astra, which is now running for the second season. We are hoping to get better and better using that tool as we get more and more data into that algorithm-based system. And we will obviously leverage that to the hilt as we go forward. So I think we have a 360-degree intervention from a working capital management perspective. But like I said, the big element of debtors, which many other companies may be having, we don't really have too much of that.
It focuses on inventory management and also using a lot of digital and technology to sharpen our buying processes.
Thank you, sir. I'll move on to the next question, the last question at FMCG before we move on to the other businesses. Some investors have asked about benefits under the PLI scheme now that the approval has been granted. What is the investment amount committed? Which areas and what is the sizing of the incentive amount that the company is likely to obtain?
Supratim, will you take that?
I think in the morning presentation, Hemant did mention about ITC being chosen or has been selected as part of the PLI Scheme. And we've got the three buckets: the ready-to-eat, the fruits and vegetables, and marine. Marine is, of course, very small. But the first two are relatively big. Again, the numbers are not out in the public domain, so I'll refrain from giving out the exact numbers. But ITC would be one of the largest kind of players committing to incremental investments on the PLI Scheme. And the scheme is quite well understood. There is a threshold top-line growth that is required. And you get a particular level of incentive, which is capped to the particular category's overall investment or the budget that the government has. So we should be able to recoup the total investments in the medium term through the incentive route.
But what it really does is to kind of give a real push to investments in food processing and also to brand building, which is really very close to our heart. As you saw in the morning, we have incubated a lot of Indian brands. And this really gives us a window and a support from the government. And it's very welcome from the government to support companies like ITC, who really are the largest incubators of Indian brands in the country. So like you've seen, our exports have doubled in the last two or three years. And we really want to use this as a good support for us to scale up in target markets in the identified categories. So Hemant talked about certain markets. We are looking at many more.
I think this is a big support that we will get through the brand building expenditure reimbursements that we will get from the government, quite apart from the first three buckets that I talked about. It's quite an encouraging scheme. We are very thankful to the government to do this in quick time. We will do our best to leverage the scheme to grow the business and scale up Indian brands in export markets.
Thank you, sir. One last question on FMCG. In the new strategic landscape, is the previous target of one trillion in terms of revenue by 2030, is it still valid?
When the target of INR 100,000 crores was spoken about some years back, that was, I think, more to articulate an aspiration and vision of the enterprise. And when it was articulated, it was probably a target which was envisaged at maybe 17, 18 years later. So it was more in the realm of an aspiration and to galvanize the enterprise to create a business at scale and also so that this whole aspect about scale comes into the thought process. That's the background to this. And we are still committed to building a much larger FMCG business than we have today. And we've articulated today our approach. And we have very clearly said that the categories that we will enter into, even in staples, although in staples itself, we probably enjoy unmatched advantage and efficiencies because of scale.
But we would like to get into more value-added segments, leveraging the power of the brand there because we are very committed to growing at the top quartile of the industry. And at the same time, we want to sustain the trajectory of margin improvement that we've had in the last few years. Yeah, we know that this year is an aberration for reasons that we have already articulated. But we would like to continue this trajectory and be in the top quartile of the growth. That's how we are seeing the future of FMCG industry. And yes, there is clearly a lot of headroom to grow in all the areas that we are into. And given that per capita consumptions, given that penetration levels are low, I think there is immense opportunity to achieve this kind of aspiration.
Thank you, sir. I'll move on to the hotels business. What is the status of recovery in the hotels business? Second question, finish off the hotels portion. With waves of pandemic in varying degrees across different geographies, do you think there could be structural long-term impact on business travel? If so, how is this likely to affect the industry and ITC's own hotels business?
In line with the much faster recovery that we have experienced post the second wave, even the hotel industry is posting a much smarter recovery. I think the increased vaccination is providing further confidence to people to travel. We saw in Q2 itself, we were at least at the cash level, we did not lose any money. We were cash positive. With the progress that we have seen in the industry, we now find that leisure destinations are doing well. Leisure travel is doing extremely well. Yes, bulk of our business is also business travel. Business travel is maybe about 40% or 50% of what it was pre-COVID. ARRs at about 70% of what it used to be pre-COVID. Occupancy levels are more or less. We've achieved the pre-COVID levels. All in all, there is progress.
I think, as I said, first quarter, we were cash break even. I think the trend this quarter is even better. So we should look at a better. All indications are that it will be even better in this quarter. With the vaccinations progressing, with the case count being low, I think progressively the industry will continue to pick up. It should be on a much firmer wicket next year, though it may take a little longer to completely normalize. Now, as far as the structural changes are concerned in the industry, I think I want to call out a few things. One, the common trend we saw in FMCG of people preferring trusted brands, I think, comes here also. So hotels that can assure safety, hotels that can assure hygiene, or brands that can assure them will certainly be preferred.
In ITC hotels, we have the WeAssure program. It is the only program that is certified by DNV. Number two, work from home and meetings through virtual means is a reality of life. It is going to stay. But which way will it work? Is it going to work? Is it going to work in terms of reducing travel? Or is it going to work in a way that I take less frequency of travels, I spend more days in a particular location, do all my work, do some of my work online, and then go back instead of making frequent trips to that location because I can work from any location? So these are things that we will see in future.
But anecdotally, I have seen people that have come to have traveled to cities for a longer period of time and try to wrap up a range of activities while they continue to do office work from the virtual meetings. So this is something that will evolve over a period of time. The other factor to keep in mind is that the outbound tourism in India is far greater than inbound tourism. And I think during this pandemic, a lot of us have experienced what India has to offer. And I do hope that this will have a rub-off effect. And actually, some of the outbound tourism will actually, over a period of time, get converted to inbound tourism. So I'm quite optimistic that going forward, the industry will continue to progress and will do well.
Thank you, sir. I now move on to some questions on the Infotech business. This question has come from several analysts. The company has been highlighting the performance of this business in its quarterly investor presentations. What is the company's view on this business potential of this segment, of this business? Is the company evaluating any M&A in this business?
Yeah, we see tremendous potential in this segment. It's a very large segment. It's an area where India has strengths. And I think more specifically, at a time of disruption, at a time when digital technologies are directly being leveraged to create business outcomes, I think at that point of time, domain becomes important. Interplay between domain and technology becomes important. And the fact that Infotech is into some verticals where ITC also has domain strengths, that gives us some strength from a domain perspective. So I think the opportunity is immense. And that's why we are providing impetus to this business. That's why we have brought in the right talent to power this business.
Yes, in this space also, in this industry also, we are absolutely open to M&A, to look at M&A in areas that will be aligned to our strategic roadmap that will help us build the sectors that we want to build because we certainly want to be a company that is very sharply focused on certain domains and technologies. So what aligns with that is what interests us. And we are actively seeking out opportunities there. Should they come, we will certainly try and take it forward.
Thank you, sir. Is the company considering listing the Infotech business separately?
ITC Infotech is a 100% owned subsidiary. Listing is certainly a possibility. These are issues that we examine from time to time. When it's believed that it would be a good idea to do so, and when it is felt also that it is, what would I say, commensurate or material enough, and when we feel it is worthwhile doing it in the interest of all stakeholders, I think at that point of time, certainly the board will consider that. These are certainly we are very open and flexible to these areas. These are areas that we debate. Look at the context and look at the timing. There is a context and timing to everything. We have to approach it with an open mind and do what is right at the right time. That's the approach that we will take.
Thank you, sir. I now move on to certain questions relating to structuring and use of cash. First up, what are the demerger plans of the FMCG business to unlock value?
Okay. So as far as the FMCG business is concerned, the strategy right from the beginning has been to leverage institutional strengths. That's how this business has grown. That's how this business has evolved. And there are channel synergies. There are operational synergies. There are product development synergies. And of course, there are commercial synergies, as in the cost synergies also at play here. So there are many benefits that are available. It is not to say that FMCG businesses cannot be built without this. They can be. But we believe that we should bring something unique to the table. And that's why we brought in the institutional synergies. And you will also note that although the margin is lower, but the fact is the cost of building this business has been reported to be far more efficient than the other routes that would have been available.
We built this business at a more efficient basis because we were able to leverage institutional strengths, so this is how we have built it, and this is where we are. From this point, we are certainly open to seeing what is right to create value for shareholders, and these are things that we evaluate from time to time, but when we evaluate it, we certainly look at the maturity of the business, the business context, and fundamentally look at what is required for sustained value creation because that's a fundamental pillar. Sustained value creation is a fundamental pillar that must be ensured by any enterprise, so we look at those facets also and then take a decision, but these are things that we examine from time to time, and nothing is cast in stone. How we organize ourselves flows from business strategy.
If you go back in history, the paper business, the hotel business was a separate business. It was brought in for a purpose. In the year FY20, we took a view as the hotels business was mature. This business strategy also was a focus on the asset-right strategy . So we thought it's the right time to look at alternate structure. And it was very clearly articulated in the annual report. We have reiterated that we remain committed and open to it. But it will have to be done once the industry recovery dynamics are kind of established. It does not make sense to do it when the industry is not fully stabilized. So I'm just giving you these examples to say that nothing is cast in stone.
We will continue to look at it and do what is right for the business to create sustained value, which is what we are committed to, and also to look at all these opportunities for unlock in the context of business maturity and business context and do what is right for sustained value creation. We are completely committed to it. And in the past, while this is not the question, but I might also just add that there have been questions or feedbacks on various facets, ultimately with the objective of value creation. And I did receive feedback earlier on on profitability. And that's an area that we at that time also said that we are going to focus it and focus upon that. And also, with scale in some of our older businesses, the trajectory is going to change. And that is seen.
Of course, the discourse has now moved to another question relating to FMCG. Similarly, there was a question on asset productivity as far as hotels are concerned. This question, again, in the year 2017 itself, we announced the movement towards an asset-right strategy And work started in right earnest. And we are seeing the momentum build up now. There were also some pointers as far as capital allocation is concerned. And that's what also led us forward to bring in a new dividend, to bring in a very clear and very sharp dividend distribution policies. These are certain steps that we have taken based on certain feedbacks that we have received. And we continue to examine and discuss all the suggestions and questions that we get. And we will do whatever is right for the long-term sustained value creation.
We will not do anything that is only merely for the short term. That's the only condition I would like to put as a parameter to whatever we do.
Question relates to structuring of the hotels business. And this has come from several analysts from J.P. Morgan, Morgan Stanley, Moon Capital, o3 Capital, JST Investments, etc. The company had indicated that it is working on alternate structures for its hotels business. While the pandemic has impacted the hospitality business around the world, what are the avenues that the company is evaluating? And where are we now with regard to these steps?
We are committed to whatever we have stated in FY20. And we've also reiterated this last year, saying that as the industry recovers, we will take it forward. I'm mindful of the fact that whatever route we take has to be formally approved. And then only we can bring it out. So I would not get into the details of that. But I can only reiterate that we are committed to it. It's not something that has been shelved or going to be postponed for the long term. It's certainly on the cards. As the industry recovers, we will do what we have said in our annual report.
Thank you, sir. What are the CapEx plans of the company in the next three to five years? Which segments and what kind of allocation can we look forward to?
Supratim, would you like to take this?
So see, on CapEx, I think it's good to look at a three-year perspective and not just an annual number because CapEx, by definition, is long-term. And cash flows tend to be lumpy. Firstly, I think if you look at FY21, it came off a year, which was quite disrupted. And we spent only about INR 1,600 crores. So that needs to be seen as a kind of an exception, as a particularly low number. But I think a good way to think about this is about a run rate of about INR 3,000 crores per annum. So that takes us to roughly about INR 10,000 crores. And like I said, it's not going to be linear. But looking at a three-year perspective, an average run rate of INR 3,000 crores, that could be a good way to look at it.
To set this in perspective, like all of you know, our total depreciation for the company is about INR 1,600 crores. So this is about 80% more than the depreciation number on a per annum basis, which takes us to about INR 3,000 crores run rate per annum. As far as where this money is going to be deployed, quite obviously, the large user of this CapEx is going to be FMCG. Our estimate is that about 35%-40% of this number would be allocated towards FMCG, largely in creating new capacity. We already have the ICMLs. But as demand grows, we would have to put in more lines. And that's a good problem to have in a manner of speaking. As we see demand, we put in more lines in a modular manner. A lot of the infrastructure, the utilities, the base foundations are already there.
We don't have to really spend a lot of money on those anymore. I think 35%-40%, again, would be a good way to think about the allocation to FMCG. The next bigger user of cash would be the paperboards business. By nature, it is capacity-led growth that comes in. And therefore, we need to augment our capacity as we kind of reach 100% utilization, which is, again, a good problem to have. Paperboards is going to be perhaps 25%-30% around that kind of mark using cash of that INR 10,000 crores in the next three years. We talked about hotels pivoting to an asset-right strategy. The hotels that are being kind of built right now, we are almost getting to the final stages. The cash flows, the residual cash flows would happen in FY2022 and mid of 2023 maybe.
So if I look at a three-year perspective, again, hotels should be around 10%. And thereafter, we should see even lesser allocations to the hotels business because of the large kind of impetus that we are giving to the asset-right, the management contract route of growth from here on. We will also have CapEx in agriculture, the agribusiness, and a lot of work that is happening around digital and sustainability would be the other horizontal users of cash as we go forward. So that's pretty much the way we're thinking about capital expenditure at this point of time.
Thank you, sir. The company has a lot of cash in the balance sheet. How is it thinking about payment days, especially in the FMCG space? In the FMCG business, is there potential entry into new categories? Could you talk about some portfolio gaps that you may plan to bridge inorganically?
Supratim, would you like to take this?
Yeah, sure. So M&A, of course, has been called out as one integral part of our growth strategy. It certainly adds one pillar, one additional vector of growth. And we also talked about exports. I think other than organic, we are really looking at M&A and exports to be the two newer vectors of growth for the company. Largely, the action is going to be around, I would say, FMCG. And I think the Sunrise acquisition, the Savlon acquisition, the Nimyle acquisitions have given us a lot of confidence that we can perhaps strategize well on the key targets and the spaces that we want to look at. So certainly, it's an area of great interest of M&A. But it has to be value accretive. That's the main, I would say, filter in a manner of speaking.
We want to be not just buying top line and bottom line, but also creating value on the investment that we put out. So I think when we look at assets, we have a lot of pipeline. We have a lot of deal flow, as you can well imagine. But we have to be choosy about it because we want to create value over the long term. So the key question is, what are the strengths we bring to the table? And what capabilities do we acquire through the M&A route? Some of these filters and some of these thoughts are very, very important for us to select the target. And of course, then it's a question of how do we bring ITC synergies to play?
I think, like in the morning presentation you saw in Foods, in Sunrise, we found a very, very good asset where we could bring a lot of ITC synergies to the table. We also got something really valuable from the asset that we acquired. Really, it's a win-win from an M&A perspective. I think that's a very good playbook that is there for us. We are quite hungry. We have the appetite. But we need to create value on the asset. Therefore, valuations also are important. It's not that we just want to acquire at any value. Valuations are important.
And we would be mindful of that as we go in because some of the transactions that have happened in the Indian space with eight times, nine times kind of sales multiples, those we find very difficult to kind of fit in our playbook, even if the asset is reasonably good. So that is a filter that we need to always kind of work through. But we are very, very keen to add to growth and profitability and value creation through the M&A route. The spaces we are looking at, like I mentioned, is largely FMCG. It could be regional brands like Sunrise. It could be completely new areas, which are adjacencies, like Savlon did in the case of personal care and Sameer's presentation highlighted what it opened up for us as a company through the latent equity of the brand that we acquired.
So I think, like I said, we have a pretty clear, I would say, idea as to what we are looking for and where we are looking for some of these opportunities. And you will see more of this in times to come.
So if I may just add to it also is that in a similar vein, outside of ITC Limited, our wholly owned subsidiary ITC Infotech is also viewing M&A in the same manner as Supratim described for FMCG. So that's another area where we are actively pursuing this vector.
Yes, sir. The next question is again got to do with cash in the balance sheet. Will you consider special dividends and/or buyback of shares as a way of returning cash to the shareholders?
So Supratim, or maybe you can answer. You can take this.
Chairman can supplement. So I think, firstly, let's look at the overall picture of capital allocation. I think Chairman explained the two large, I would say, changes that have been brought around in the last few years. One is, of course, the asset-right strategy i n hotels, which used to be a larger user of cash in the past. And the second one is to actually looking at our needs and our capital expenditure plans and our growth plans, what should be the payout ratio. And we've actually gone ahead and kind of baked that in the distribution policy itself. So we've called out that it's 80%-85% over the medium term as far as the annual profits are concerned. So we have executed upon that. So now the question is on surplus cash.
So if you look at the payout ratios and the kind of cash generation we have, we are not really adding to the cash surplus that we have on our balance sheet anymore. In fact, if you look at March 2021 over March 2020, the surplus was down by 25% because we paid out more than based on the new ratio. So actually, we've depleted the surplus. Now the question is, as far as special dividends are concerned, that's been a route that we had followed in the past. But I think there was a lot of feedback from investors, which we fed back to our board and senior management. And the call was taken that more than special dividends, the value of that return of cash in the form of ordinary dividends is of a higher order. And we listened to the investors. We listened to shareholders.
I must say the board acted quite promptly to take that on board. We have preferred to pay out the, I would say, the higher amounts of dividend totally in the form of ordinary dividends. In fact, last year in FY21, although our profits had suffered because of the pandemic, we did not really step down on the dividend per share. In fact, we took it up as an ordinary dividend per share. Maybe in some other time, I'm guessing this could have come through as a special dividend. I think the value of ordinary dividend is better, is higher because it gives you the predictability. It gives you the certainty and visibility to long-term shareholders. We really value long-term shareholders. The feedback was well received by us. We've acted upon it.
Now the question about what are the other forms, including buybacks, is always there. Like Chairman mentioned to the response to the previous question, we are open to all these different methods. But so far, I think, especially in the last 18-20 months, our focus has been to get our earnings growth momentum up and to also maintain the threshold DPS, the dividend per share. I think we have thought about the DPS maintenance to be a very important, I would say, objective in these times because a lot of shareholders have come into the stock. And they really value the dividend per share that they earn. So we didn't want to kind of let up on that. And we've actually maintained the increasing trajectory of DPS. So I think that's what we have done so far.
But as far as the other routes are concerned, they're all on our table. It's something that we can constantly look at. And like Chairman said, nothing is really cast in stone. And we shall look at all the options possible and choose the best option that is in the interest of long-term value creation. So I just put it that way that these things are looked at on an ongoing basis. And the board will take the right decision at the appropriate time.
Thank you, sir. The company has recently acquired a D2C brand, Mother Sparsh. What is the specific strategy? Any synergies for existing ITC FMCG businesses?
We had a discussion around digital during the day. And there was a specific presentation on it where we have. And we've also articulated our position very clearly that given the manner in which digital is evolving and digital is being adopted by society, we see ourselves as a future-tech enterprise, which is really a future-ready digital enterprise. And that's the shape of things to come in the future. Digital will be a very important component. And D2C is a model that is gaining traction. And the inspiration comes from a lot of the tech entrepreneurs, some of the unicorns, and where successful brands have been created, successful platforms have been created. We also believe that platforms will be a very important tool for brand owners in the future. So these are things that we will invest behind both organically and inorganically.
And that is why we have made the investment in Mother Sparsh. As far as synergies are concerned, yes, there are going to be synergies of learnings. There are synergies in we will be looking at synergies as far as innovation is concerned, synergies as far as creating some offline salience of products is concerned. So all these synergies are on the table. And we will discuss and review those as we go along and as the business of Mother Sparsh evolves. The idea of investing is also to work with the founders and help them scale up and make a great business. So all of these options are available. We have a large R&D center. We have a wide distribution network. We have a lot of talent in the organization. We have skills in digital also. So we will see where two-way experience sharing can also happen.
So all these are possibilities and fits very well with our overall strategy and vision to be a future-tech enterprise. And hopefully, we will see more of this, not only organic, but more of the inorganic piece going forward in this space as well.
Yeah. We've already ticked past 5:00 P.M. But with your permission, I'll still accommodate a couple of questions, sir.
Yeah, sure, please.
How is the company engaging with the startup ecosystem? is the next question.
Okay. First of all, we do invest through certain private equity or VC funds. That gives us visibility to a range of tech-enabled brands or startups in the country and what business models and what progress these companies are making. That provides us information, provides an opportunity to interact. Besides that, we also participate in various events where we can get updated. We also go to places where such startups are being incubated or have some centers where they are kind of being mentored. We have a comprehensive network to first get visibility to what is happening, understand what each startup is trying to do. We shortlist some startups. In certain cases, we have started, though not many, to make direct investments.
But there are many more cases where we are directly working with startups in helping them scale up their model as also testing out some proof of concepts and also identifying areas which can be scaled up for mutual benefit. There are a huge number of startups we are working with. So that's the way we address the issue of startups. We have a dedicated cell that is constantly in touch and integrates, identifies the startups, and links them with the respective business. So there is kind of undiluted focus on this space. We also have a fund set aside for us to invest, whether through private equity or directly in the startups for this purpose. So it's an area that is receiving a fair bit of or a lot of attention, I would say, within the company.
Thank you, sir. The last question, this relates to shareholding. Foreign institutional holding in ITC has been coming down due to ESG concerns. On the other hand, you have been highlighting that ITC's ESG credentials are top grade. Can you please briefly talk about any specific engagement that ITC is having with foreign institutional investors on ESG and what their concerns really are?
Well, this is an ongoing engagement with investors where we share our ESG credentials. We also share our roadmap and our vision. As my colleague Nazeeb articulated during the day, this is an ongoing activity. And it has been very clearly acknowledged that ITC's credentials in this space are exemplary. There are, of course, various views that investors have taken on ESG. Some have chosen to take a route of exclusion. Some have chosen, or some are, in fact, moving towards what is now understood as a holistic integration, which is more about how you are transforming, how you are conducting your business. So this is an area that is evolving. From only exclusion, we are finding a move towards the other part. But this is an evolving space. And we have to watch it.
And there are clearly funds that have taken a view that we do not wish to invest in a set of sectors. And there are funds that are now moving towards the idea of holistic integration. So there is a churn happening. But we continue to remain engaged, continue to share our credentials, and continue to invest to strengthen our credentials, whether it is from creating environmental capital, social capital, or also from providing exemplary governance standards. And you had visibility to all of this during the day.
Thank you so much, sir. We've already been here for about six hours. I'm sure there are plenty of other questions that we've not been able to accommodate in the Q&A session. But we must draw a line somewhere. I wholeheartedly thank the panel for comprehensively answering the questions that have been asked by analysts. I also hasten to add, I thank all the analysts for putting in the questions today through the chat box right through the day. Thank you so much. May I now request you for your closing remarks, if any, sir?
All right. Thank you. Thank you, Karthik. And first of all, may I thank all of you for joining us today and being here for this rather long session. And I'm quite encouraged by the range of questions that are asked. And I thank you for the interest that you have in the affairs of the company. And as I close, I'll just reiterate that we are completely committed to creating long-term value for shareholders and for all our stakeholders. This is what our primary role is. And the fundamental of that starts with competitively superior performance, which we have delivered and which we continue to focus on. In the last few years up to the pandemic, our EPS went up by 47%. We've also seen the trajectory in FMCG during that period. And we are also now seeing the recovery. So performance is receiving the right kind of attention.
We have also shared with you what ITC Next encompasses. ITC Next is the focus. It is to make the organization contemporary, make sure the organization is nimble and consumer-centric, bring in the contemporary skills and technologies that are required for organizations to win in the future. It's about identifying newer vectors of growth in each of our businesses. It's about addressing or tweaking our strategies.
or bringing in new elements in our strategy to address some challenges or headwinds that our businesses have faced in the future. And all this is certainly a work in progress, and all this, a lot of it has already been, you know, it's not that it's just suddenly happened. This has been, these are things that we have been working on in the last two, three years, and we are starting to see the results of that. And the results that we have achieved so far certainly give us immense confidence. So we look to the future with immense confidence, and we believe that the kind of performance that we aspire for, we should be able to deliver on the back of our institutional capabilities and the robustness of our strategies.
With this, I once again thank you very much for being here today, and thank you very much for your support. If there's anything else you wish to know, I think the investor relations team is always available. Thank you.