Agro Tech Foods to diversify portfolio to cater to post-pandemic demand

New Delhi: Processed foods company Agro Tech Foods, which makes a diversified portfolio of ready-to-cook and ready-to-eat spreads, corn-based products, edible oils and breakfast cereals, is identifying profitable growth drivers across diversified packaged foods categories as it looks to reduce dependence on its core edible oils business, the company said in its quarterly analyst meet.
“The company’s transformation journey is at an inflexion point, with gross margins from foods now exceeding gross margins from oils. Agro Tech Foods is looking to diversify its portfolio to cater to post-pandemic demand,” it said.

Led by increase in in-home consumption amid the pandemic which has forced people to stay indoors, Agro Tech Foods’ ready-to-cook business grew 55 per cent by volume and 50 per cent by value in the first six months of the present financial year.

The maker of Sundrop edible oils and Act II popcorn intends to expand distribution and gain scale in new products launched in recent months including breakfast cereals, corn-based products and spreads, while exploring opportunities with competitive advantage, it said.

A report by Edelweiss Securities said while growth was largely driven by surge in in-home consumption, high commodity prices impacted margins.

The company said in its analyst meet that it intends to outperform competitors in core categories with steady month-on-month volume growth as it expands distribution. The foods portfolio is driving margins for the business, and the company has increased ad spends behind its Act-II portfolio, it said.

It added its ready-to-cook portfolio will continue to invest in brands and expand distribution to leverage unmet consumer needs. Other plans include foraying in the pasta and noodles category, building on the nascent dips category, and evaluating an entry in the corn flakes and oats categories. The company has tweaked its go-to-market strategy for low unit packs of Rs 5, directly shipping from plants to distributors.