DTC and staples snapped up, FMCG cos are gunning for snacks now
FMCG sector. Britannia is reportedly in talks to acquire Guwahati-based snacks maker Kishlay Foods.
Last year, ITC acquired healthy snacks brand Yoga Bar and there have been reports of some of the leading FMCG players considering buyouts of some snack companies.
First, it was snapping up of the DTC (direct-to-consumer) startups, then of the spice makers and now of the snack sellers. And FMCG companies are in a bid to outdo each other to make sure they do not miss out on forging inorganic growth.
Increased competitive intensity and limited avenues to grow organically are forcing the leading FMCG companies to look outside their conventional categories. They are using their strong balance sheets to buy growth in non-traditional categories — most of them typically occupied by unorganised players.
The current M&A frenzy in FMCG was triggered by the acquisition of DTC digital brands before and during the Covid-19 pandemic. Between 2021 and 2023, several companies such as Marico, HUL, ITC, Wipro, and Emami picked up stakes in a slew of DTC startups. The pandemic-induced lockdowns pushed the Indian consumer to become an omni-channel shopper making consumer companies reimagine and de-risk their supply chain distribution.
Thereafter, companies turned to national and regional spice and staples makers. For instance, ITC acquired Kolkata-based Sunrise Foods in July 2020. Dabur acquired the spice maker Badshah Masala in October 2022. Wipro acquired two Kerala-based brands — Nirapara in December 2022 and Brahmins in April
