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Mint
17-05-2025
- Business
- Mint
FMCG firms have been hunting for deals. Their appetite is only growing bigger
India's cash-rich makers of staples to shampoos will press ahead with big-ticket acquisitions as they chase high-growth, premium targets to cushion themselves from an overall slowdown in urban consumption. Dabur India Ltd, Marico Ltd and Emami Ltd will continue to scout for mergers and acquisitions (M&As) that help them enter new categories such as premium personal care and wellness, build a digital-first portfolio, and expand reach in the traditional market, according to their earnings calls. 'If there is a new brand or a new category to be addressed, that is where M&A comes in and supplements our efforts of organic business with inorganic business," Mohit Malhotra, chief executive officer at Dabur India, said during the company's post-earnings call on 7 May. Also read: Ice cream brand Hocco eyes sweeter spread with $10 million fundraise and pan-India ambition Large fast-moving consumer goods (FMCG) makers built mass-market portfolios of soaps, salt, biscuits, shampoos and more for a broader reach. But new, urban consumers are increasingly buying skin serums, muesli, supplements, pet food and healthy snacks or beverages. Some new brands, especially online, are even gaining market share from incumbents. This shift is happening when demand for mass-market products has remained under pressure due to heightened inflation. Indian FMCG industry reported an 11% year-on-year value growth in the March quarter, while volumes grew 5.1%, according to data sourced from NielsenIQ. However, rural demand grew four times faster than growth in urban areas, where consumption further decelerated, it said. Rural demand primarily fuelled deals worth $2.1 billion in 2024, according to Jayakrishnan Pillai, partner at Deloitte India. The consulting firm expects 6-8% growth for the sector in 2025-2026 compared with 5-6% in the previous two years, bolstered by improving urban demand, stable rural consumption, reduction in personal income tax and lower inflation. Also read: Young Indians are drinking less but better 'A heightened emphasis on premium products, health and wellness and rural market expansion may serve as primary motivators for strategic acquisitions, while integration of e-commerce and digital advancements could facilitate consolidation within the industry," Pillai said. Deal hunt FMCG companies have continued their post-pandemic acquisition blitz. Last week, Dabur outlined a seven-pronged approach as part of a strategy refresh with plans to invest in core brands, expand in premium categories, update its products and aggressively pursue acquisitions to build a 'future-fit" portfolio. The maker of Vatika oils and Real fruit drinks had last year acquired 51% of hair care company Sesa Care Pvt. Ltd, expanding its presence in the ₹900 crore ayurvedic hair oil market. The company cited 'substantial revenue and cost synergies" for the deal. In 2022, Dabur acquired a 51% stake in spice maker Badshah Masala for ₹587.52 crore. The company's M&A approach will focus on new-age health care, wellness foods and premium personal care brands. 'It [target firm] should be revenue accretive to us, which will substantially add to the revenue of the company because growth in general trade is a little subdued," Malhotra said. 'The second will be to create a future-fit portfolio, which resonates to the new generation." Mumbai-based Marico also targets becoming a 'house of brands' and acquisitions will be vital to its transformation into a digital FMCG company. Marico's recent investments include a majority stake in premium skincare brand Just Herbs in 2021, a majority acquisition of plant-based nutrition company Plix, full acquisition of male grooming brand Beardo, and an investment in food brand True Elements. All these are relatively new brands and categories. 'We firmly believe that we are a 'investor of choice' given our house of brands. We are on our way to our aspiration of becoming one of the most successful digital FMCG companies," Saugata Gupta, managing director and chief executive officer at Marico, said in an interview with Mint Thursday. 'We are open (to acquisitions) provided it is a fit. There are still some portfolio gaps in our digital basket. We think there is enough opportunity in both food and personal care." The consumer and retail sector deal volume in 2024 rose a modest 13% over a year earlier, but 2025 has seen a few large bets, according to data shared by consulting firm Grant Thornton Bharat. 'Strategic acquisitions dominated the M&A landscape within the consumer segment, with Tata Consumer Products leading the way with its high-profile acquisitions of Capital Foods and Organic India—the two deals collectively accounted for nearly 21% of the M&A deal value, setting the tone for the year," according to a January report by the firm. Regional, D2C focus Earlier this year, India's largest FMCG company Hindustan Unilever Ltd acquired a 90.5% stake in personal care brand Minimalist for ₹2,955 crore, upping its ante in the digital-first personal care space. HUL's M&A strategy has been a mix of investments in established as well as new-age brands. HUL acquired Indulekha hair oil for ₹330 crore in 2015 and Horlicks from GlaxoSmithKline for ₹3,045 crore in 2020. More recently, the company's focus has shifted towards premium, online-first brands like Minimalist and wellness and supplements brand Oziva. The acquisitions are one of the tools HUL uses to grow businesses, Rohit Jawa, chief executive officer at HUL, said during the company's post-earnings call with the media last month. For instance, the company has good brands and capabilities in foods, but if an opportunity offers a complementary fit with a good commercial case, the company will definitely look at it, said Jawa. HUL is constantly scanning for such opportunities. The key strategy is to continue investing in and growing their market maker (categories identified by HUL as ripe for premiumization) and future core (future trendsetters) segments to drive overall business growth, he said. Pillai of Deloitte India said growth in M&As is anticipated from both regional brands and direct-to-consumer (D2C) companies. 'Regional brands provide immediate scalability and access to local markets, while established D2C companies, particularly those with robust digital and e-commerce capabilities or those operating in rapidly expanding health and wellness sectors, represent appealing targets for acquisition." Also read: India's FMCG industry clocks 11% growth in March quarter on higher edible oil prices Kolkata-based Emami Ltd, known for brands like Zandu balm and Boroplus, said it has cash available and is open to investing in traditional and direct-to-consumer or D2C businesses. Emami's recent acquisitions include stakes in male grooming, new-age personal care, packaged drinks, and pet care brands. Greater competition in the market is prompting companies to step up innovation, according to Harsha V. Agarwal, vice chairman and managing director at Emami. 'We are looking for more acquisition opportunities. We are open for smaller acquisitions as well as large ones," he said in an interview with Mint last month. 'The opportunity has to be good. Investment is not a constraint for us because we are a debt-free company with a very good PAT (profit after tax) and Ebitda (operating income)."
Mint
07-05-2025
- Business
- Mint
Dabur refreshes strategy, aims for double-digit growth by FY28
New Delhi: Dabur India is revamping its growth strategy to drive double-digit annual growth in both revenue and profit by FY28, as more upstarts vying for consumer spends and categories like quick commerce reshaping retail. On Wednesday, the maker of Vatika oils and Real fruit drinks outlined a seven-pronged approach that includes investing heavily in core brands, expanding in premium categories, updating and modernizing its product categories, shedding underperforming products, and aggressively pursuing acquisitions to build a 'future-fit' portfolio. 'As we look ahead to the next phase of our growth journey, we have undertaken a comprehensive refresh of our Vision strategy. Our ambition is to achieve sustainable double-digit CAGR by FY28 in both topline and bottomline. This renewed strategy builds on our core strengths while pivoting towards future-ready levers of value creation,' Mohit Malhotra, Dabur India's chief executive officer, said during the company's post earnings call. Malhotra said the renewed strategy would focus on scaling its top-performing brands—Dabur Red, Real, Chyawanprash, Honey, Hajmola, Amla, Odonil, and Vatika—while also launching contemporary, premium products in segments like healthcare, oral care, and hair care. "We will continue to add scale to these brands through disproportionate investments thereby increasing penetration and driving market share gains,' Malhotra said. 'Second, premiumization and contemporization across categories. Few examples of these are serums, conditioners, masks in hair care; benefit led toothpastes in oral care; Activ range in beverages; gummies, powders, effervescent in healthcare. Third, bold bets across health and wellness spaces. We will focus on ramping up Hajmola franchise, health juices and Shilajit to name a few,' he said. On Wednesday, the company reported a 3.6% jump in consolidated FY25 revenues to ₹ 12,563 crore, up from ₹ 12,404 crore a year earlier. Consolidated revenue from operations grew 0.55% to ₹ 2,830.14 crore for the three months ended 31 March 2025. Profit for the fourth quarter dropped 8.3% to ₹ 312.73 crore. Beyond core brands, Dabur plans to double down on emerging health and wellness categories such as gut health, stress relief, and lifestyle management. It also intends to rationalize its portfolio, exiting underperforming segments like teas, adult diapers, and Dabur Vita to free up resources for bigger bets. 'We will get out of these categories and focus on big bold new products which we have identified and core portfolio where we will invest,' Malhotra said. Earlier this year, the company noted it had shortened its strategic review cycle from four years to three, citing sector volatility and uncertain macroeconomic conditions. Dabur enlisted McKinsey & Co. to help refine strategies for the next three years, according to Malhotra. Dabur's product portfolio spans foods, beverages, oral care, hair care, home care, and health items. Additionally, Dabur plans to overhaul its go-to-market strategy for more effective expansion across urban and rural India, focusing on emerging channels like e-commerce, quick commerce, and modern trade. 'We will also focus on consolidation of stockists for better return on investments, reducing cost to serve in the urban general trade channel and enhanced use of digital tools to boost extraction,' he added. Dabur is also targeting aggressive mergers and acquisitions to build a future-fit portfolio, particularly in new-age healthcare, wellness foods, and premium personal care. In January 2023, the company acquired a 51% stake in Badshah Masala for ₹ 587.52 crore. Finally, Dabur will continue refining its operating model to optimize costs, drive efficiency, and enhance agility and digitization across its value chain. On consumer demand, Malhotra said he expects gradual improvements in the coming quarters. 'Going forward, we are expecting a gradual sequential improvement in consumer demand. Quarter one, then quarter two and three will sequentially keep getting better. Rural is already growing much ahead of urban; urban green shoots will come in gradually,' he said.
Economic Times
07-05-2025
- Business
- Economic Times
Dabur to rationalise underperforming products, double down on e-comm & quick-commerce
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Packaged goods maker Dabur India is looking at 'rationalisation of underperforming products and SKUs in order to release capital for bigger bets… A few examples of these are Vedic tea, adult and baby diapers and Vita,' Dabur's chief executive Mohit Malhotra said in a post-earnings investor call on company reported 8% year-on-year decline in net profit at Rs 320 crore for the January-March 2025 quarter, which it said was impacted by a continued challenging demand environment with high food inflation and surge in cost of living limiting urban spending. The maker of Vatika shampoo and Real juice added in an investor call that it would rationalise slow-moving products and double down on quick commerce , as well as consolidate stockists and reduce costs in urban general said the company will drive its go-to-market 'for effective expansion across urban and rural India', double down on e-commerce , quick commerce and modern trade. 'We will also focus on consolidation of stockists for better ROI, reducing cost to serve in the urban GT channel and enhanced use of digital tools to boost extraction.'Malhotra added in the investor call that the company will continue to premiumise its portfolio across categories such as serums, conditioners and masks in its hair care portfolio, benefit-led toothpastes and gummies, powders, effervescents within said Dabur has seven nearly Rs 500-crore brands which contribute over 70% to its portfolio, including Dabur Red , Real, Chyawanprash and Vatika. "We will continue to add scale to these brands through disproportionate investments, increasing penetration and driving market share gains,' he that the company will take 'bold bets across health and wellness spaces', he said Dabur will ramp up its Hajmola franchise and health juices, and target emerging need gaps such as gut health, heart health, stress and lifestyle management through existing and new added that the company 'will aggressively pursue M&A opportunities for creating a future fit portfolio particularly focused on new age healthcare, wellness foods and premium personal care.'The home-grown Dabur reported a net profit of Rs 320 crore in the quarter, down from Rs 350 crore in the corresponding year-ago quarter. Revenue from operations increased marginally by 0.55% year-on-year to Rs 2,830 crore. Its revenue for the full year stood at Rs 12,563 crore, compared to Rs 12,404 crore in the previous company's shares closed near-flat at Rs 480.85 on the said in a statement that he expects consumer demand in India 'to recover progressively in the coming quarters, both in urban and rural markets.' Rural markets contribute to nearly half of Dabur's annual company said foods grew over 14% in the quarter, while its skin and salon business grew by 8%.
Web Release
05-05-2025
- Lifestyle
- Web Release
From Braids to Buns: How to Style & Protect Your Hair Like a Pro
By Editor_wr On May 5, 2025 Summer Hair? Vatika has got you covered with must-have summer hair heroes! As we officially enter summer season, it's time to pull out the breezy sundresses, bold sunnies, and yes, those effortlessly chic hairdos that are cool, confident, and classy. Whether you're vibing with a slicked-back bun, playful braids, or a heat-defying ponytail, one thing's for sure, your hair needs to be on point. But let's be real: nailing that picture-perfect braid or the ultimate high bun takes more than just skill, it requires great hair. Welcome Vatika, your ultimate summer hair saviour. Packed with natural, hair-loving ingredients, Vatika products are designed to tame the frizz, boost up the shine, and keep your strands healthy and hydrated, even in the blazing Middle Eastern heat. Think glossy, Insta-worthy hair that holds every style like a dream. Here's your summer hair care squad: Vatika Enriched Hair Oil Prepping your hair for the ideal look starts before wash day. Massage in these lightweight yet nourishing oils made using ingredients such as olive, almond, black cumin, cactus, to boost moisture and bring back natural shine without leaving your hair greasy. Perfect for giving your locks that pre-style glow-up. Vatika Hammam Zaith Deep Conditioning Treatment Think of it as a spa day for your strands. This weekly deep treatment floods your hair with intense hydration, prepping it for heat, humidity, and any hairstyle you want to slay. Because healthy hair is the best foundation for any look. Vatika Shampoo & Conditioner Hot days call for clean, fresh, and breathable scalps, minus the dryness. Infused with nature's best like aloe vera, coconut, and argan oil, these power-packed duos cleanse and condition while keeping your hair silky, strong, and ready for every summer snap. So whether you're poolside, at brunch, or going out dancing, make sure your hair is summer-ready with Vatika. Available now at supermarkets across the UAE. From Braids to Buns: How to Style & Protect Your Hair Like a Pro Comments are closed.
Web Release
10-04-2025
- Health
- Web Release
Spring Hair Refresh - Top Seasonal Hair Care Tips from Vatika
By Editor_wr On Apr 10, 2025 As we transition from the cool winter months to the warmer days of spring, your hair requires special attention to stay healthy and vibrant. The shift in temperature and humidity can affect your hair's texture, moisture levels, and overall health. Here's your ultimate guide to keeping your locks fabulous throughout the seasonal switch with Vatika Products : Moisturize for Hydration with Vatika Enriched Hair Oils – The warmer weather and increased humidity can dry out your hair, especially after a cold winter. Hydrate your hair with Vatika's range of Hair Oil, designed to replenish moisture and add a natural shine without weighing your hair down. Shampoo & Condition Regularly- As your scalp adjusts to the warmer climate, it's important to keep it clean and healthy. Swap to hydrating shampoos and conditioners with aloe vera, argan oil or coconut Deep Conditioning Treatments – To keep hair nourished and soft during the seasonal change, try a deep conditioning treatment once a week. Vatika Hammam Zaith is perfect for restoring moisture and repairing any damage from winter, leaving it with a glossy, effortless shine. Vatika products are available at supermarkets across the UAE. Spring Hair Refresh - Top Seasonal Hair Care Tips from Vatika Comments are closed.
