Scent of change . ITC Mangaldeep’s fragrant new forays

For years, agarbathis (incense sticks) have been obscure, lying in a corner of one’s pooja room, looking the same across brands. They have also long been a staple purchase, which the consumer picked off the shelves hardly giving a second thought about the brand. So then, what can an FMCG giant like ITC do to make it a product of discerning taste?

A lot, as it turns out.

ITC Mangaldeep, the matches and agarbathi division of the FMCG giant, has been in the market for 21 years. It is number two in agarbathis after the Cycle brand and number one in the dhoop segment currently but it is not resting on its vapours — in a manner of speaking.

In recent years, it is changing the rules of the game, focusing on premium fragrances created by global perfumers, leveraging digital analytics to gauge consumer preferences and accelerating R&D in areas such as low smoke incense variants.

Like all things in the FMCG world, the incense sector too is going through a premiumisation wave. To tap into this, ITC Mangaldeep is bringing marquee fragrances into this space, exploring its gifting potential, and also does not rule out forays into aromatherapy, mindfulness and the like.

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From ritual to relaxation

“Today, consumers are looking for a bit more from their incense sticks than just a devotional offering,” says Gaurav Tayal, Chief Executive, Matches and Agarbathi Business Division, ITC Ltd. “They are thinking about how these products can create an overall calming and positive at homes, and if they can offer people at home a sensorial experience,” he adds.

Take for instance, its sub-brand ‘Scent’ that takes the best of fine fragrances devised by global perfumers to create a scented experience for users. Rose, lavender, sandal, jasmine are some of the fragrance profiles of Mangaldeep agarbathis — creations that emerged from consumer’s preference for milder and soothing fragrances with natural touches. Quality is another key priority for the company as it promises a toxin-free atmosphere for the hypoallergic customer with its proprietary low-smoke incense sticks.

The overall incense sticks industry is roughly around ₹11,000 crore in size and is hyper competitive in nature with the proliferation of national, regional and unorganised players. The industry as a whole has grown at a CAGR of around 8 per cent in last three years and estimates Mangaldeep’s growth at roughly 2x the category growth, with its premium portfolio growing at a much faster rate. While the product has largely been the same in form and design for many years now, there are a few niche trends post-Covid, many of which have been used by ITC Mangaldeep to its advantage.

“We are seeing increased rootedness among consumers making worship and mindfulness more common, even among the youth,” says Tayal. Bamboo-less dry dhoop sticks have also emerged as the pick among people, making it one of Mangaldeep’s fast growing products.

With a segment of nuclear households and younger audience moving away from ritualistic forms of devotion, Tayal admits to a “very slight dip” in penetration levels of the product category but adds that it has been made up by newer use cases.

Wafting its way

According to industry reports, Mangaldeep is No 2 in agarbathis and No 1 in Dhoop segment; and one out of four households in India buy a Mangaldeep product in a year

Mangaldeep leverages ITCs strengths in marketing, distribution, brand building, and supply chain management

Mangaldeep also has an app with over 17 lakh downloads. It offers a one-stop solution for the users for all devotional needs around bhajans, mantras, chants and rituals

Mangaldeep is also associated with four marquee temples – Kedarnath, Badrinath, Kashi Vishwanath, Jagannath. The flowers offered in these temples are used to create a range of incense products under the brand Mangaldeep Temple

The brand’s consumer panel called ‘Mangaldeep Sixth Sense’ employs visually challenged people in Kolkata and Chennai to tap into their olfactory abilities to improve product offerings.

For God and mankind

“We have leveraged the Group’s consumer research strength and have been able to catch and cater to emerging trends quickly compared to the industry,” says Tayal. “For instance, we noticed a lot of chatter in the digital world about the need for agarbathis to have perfume-like fragrances and hence launched ‘Scent’, which has high repeat customers,” he adds.

However, the path to reinvention is not without its challenges. Already a sector with thin margins and highly competitive prices, the raw material price fluctuations have been causing turbulence in recent years.

But Tayal seems unfazed. “Yes, it’s an industry where bill values are low and that is why we are trying to build the category. The growth in premium/semi-premium segment is faster and there is a large headroom there to cover,” he says. And Mangaldeep’s focus on the e-commerce and quick commerce channels lends itself to launch fast, learn from customers and then refine their new offerings. “These channels are emerging as the category of the future and we have an edge in it,” says Tayal.

With premium fragrances, regional customisation of incense sticks and dhoops, and with its pulse on consumers’ growing focus on mindfulness, ITC Mangaldeep seems to have something in store for everyone — be it God or mankind. Tayal sums it up: “Consumers are saying ‘Agarbathi is for the God, but the fragrance is for me!”