Adani Wilmar, the FMCG arm of the Adani Group, is set to embark on an aggressive expansion plan in the packaged consumer goods market. The company is likely to acquire at least three brands in the spices, packaged edibles, and ready-to-cook segments in a bid to bolster its presence in these fast-growing categories.
The acquisitions will primarily target regional players based in the eastern and southern parts of the country, with the group potentially investing up to $1 billion in these strategic moves. This ambitious capex plan marks Adani Wilmar’s most significant investment to date and comes on the heels of the group’s recent contemplation of selling its stake in the joint venture.
Adani Wilmar, a 50:50 partnership between Adani Enterprises and Singapore-based Wilmar International, is the market leader in the edible oil segment with a near 20% market share. The company has been steadily expanding its food products portfolio, which currently includes staples such as wheat flour, rice, besan, and pulses under its flagship Fortune brand.
The foray into spices and packaged foods aligns with Adani Wilmar’s strategy to capitalize on the growing demand for convenience and ready-to-use products in the Indian market. The Indian spice market alone is estimated to be worth $20 billion and is expected to reach $36 billion by 2026.
“We are very eager to do it. Maybe by the year end, if we can,” said Angshu Mallick, MD & CEO of Adani Wilmar, during a virtual interview with Mint. He further elaborated that the acquisitions would focus on the “kitchen essentials space, ready-to-eat, ready-to-cook, and also spices, condiments, anything in that space.”
The company’s recent financial performance has been encouraging, with a standalone net profit of Rs 323 crore in the June quarter, compared to a loss of Rs 38.44 crore in the corresponding period last year. Revenue also increased from Rs 12,378.83 crore to Rs 13,750.04 crore during the same period.
Adani Wilmar’s expansion plans come at a time when the Adani Group and Wilmar International were reportedly in early talks to sell a minority stake in the joint venture. However, the group’s decision to invest heavily in the FMCG business suggests a renewed commitment to the segment.
The acquisition of regional brands is expected to provide Adani Wilmar with a stronger foothold in the highly fragmented spices and packaged foods market, where well-established national players are few and far between. The company’s vast distribution network, which reaches over 118 million households through 10,700+ distributors, will be a key asset in scaling up the acquired brands.
As Adani Wilmar embarks on this transformative journey, the Indian consumer goods market can expect to see a new player challenging the status quo and offering a wider range of quality products. The success of this expansion plan will not only impact the company’s bottom line but also shape the competitive landscape of the burgeoning packaged consumer goods industry in the country.
