You use an apostrophe to show that you mean it is and you are replacing the missing letter with the apostrophe.

It's a funny bird, the pelican

Its – with no apostrophe – is just like his, hers, theirs, ours. It stands quite happily on its own without an apostrophe.

Its beak can hold more than its belly can

Memory jogger: if it is 'it is', it is 'it's'.

It can take in its beak

Enough food for a week

And I'm blowed if I know how the hell it can!