FMCG manufacturers continue to bet on mergers and acquisitions (M&A) to diversify their product categories and digital presence.
Companies use acquisitions to address portfolio gaps in their products and enter new categories. In January, Tata Consumer Products Limited (TCPL) announced the acquisition of Capital Foods and Organic India. Similarly, Marico recently acquired a 58% stake in direct-to-consumer (D2C) Satiya Nutraceuticals Pvt Ltd, whose wholly owned subsidiary Juizo Advisory Pvt Ltd owns 'The Plant Fix-Plix' brand.
“We have come a long way, but we are not there yet. Capital Foods is complementary from a culinary perspective, covering three cuisines: Sampann’s Indian Cuisine, Smith & Jones' Western Cuisine, and Capital Foods' Oriental Cuisine. This puts us in the category of chutneys, dips, sauces and noodles, which we didn't have in our portfolio. This addresses some of the gaps in our portfolio. The company has filled up, but I think there are still options. In the short term, we definitely intend to integrate our businesses to create value, but we remain open to organic and inorganic options to continue to grow. This is not the end of the M&A journey, and there are still options if it makes sense from a strategic and financial perspective. A strategic perspective means identifying gaps in your overall roadmap sooner than you can do it yourself. ,” Sunil D'Souza, CEO and MD of Tata Consumer Products, said in an earnings call.
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Along with the acquisition, the FMCG company is also launching a pharmaceutical distribution network. “We have Gofit and Soulful products that can be sold in pharmacies, but we didn't have the scale to build an independent distribution system. Our current goal is to close and consolidate. Within 3-4 months of closure. Work has begun on how to build a pharmaceutical channel. We had access to the information, but not all of it. Now that the signature is complete, we have access to almost all of the information. We expect that within the next three to four months we will have a very clear picture of how we will enter the pharma channel,” D'Souza said. business line After the acquisition.
digital growth —
With the D2C acquisition, the FMCG manufacturer has recorded a surge in digital revenue and plans to further grow its digital brand.
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“We believe our digital acquisitions have been very successful. We may not be the best in the world at creating digital brands, but Marico is in the top four for profitably scaling brands. We're really trying to start the process of synergies, synergies within the digital brands and bringing some of the digital brands into General Trade. We will do it if the opportunity arises. We have always believed that M&A is no substitute for organic growth. Our focus remains on achieving organic growth, and M&A is a multiplier. It is not a button to get around the inability to grow organically,” said Saugata Gupta, Managing Director and Chief Executive Officer, Marico Ltd.