Food services and contract catering company Compass India Food Services, wholly-owned subsidiary of the $40 billion British Compass Group Plc, has acquired a 70% stake in Delhi-based food and beverages catering company ICS Foods Pvt Ltd.
This is the second acquisition of Compass in India, which provides end-to-end food services, onsite food preparation services and catering to Procter & Gamble, Nestle, Coca-Cola, Google, Microsoft, Netflix and multiple other companies in India.
Vikas Chawla, managing director of Compass Group India, confirmed the acquisition to ET. “Post-Covid, return to work is a big story… the resurgence has been very significant and we see people back at least for three days in offices, which is helping our businesses,” he said.
He, however, declined to mention the size of the deal.
Chawla said the acquisition was one of many for the group in the coming months. “We are looking at a 30% CAGR in the food services business sector with the ICS acquisition… also, we are actively in discussion with other potential companies with synergies and looking at 25% growth through acquisitions,” he said.
According to the ICS website, the company supplies food services to Maruti, Dabur, Samsung and Honda within their corporate premises, through on-site commercial kitchens.
In 2021, Compass Group had acquired food-tech startup SmartQ , which provides digitisation in the cafeteria segment with centralised billing and automated billing.
Compass Group is world leader in contract food and support services with presence in 45 countries and 500,000 employees globally, according to information on its website.
The domestic food services and catering market in India is estimated at Rs 70,000 crore, of which a third is unorganised, signalling the room for growth for organised players. Sodexo, the India arm of French food services and facilities management company and domestic company K Hospitality are the other significant players in this space.
According to a National Restaurant Association of India (NRAI) report released on July 10, India’s food services sector would expand at an 8.1% compound annual growth rate between 2024 and 2028. The organised sector at 13.2% is expected to exceed this growth rate, the report noted.
“Food services is the third largest industry in India, valued at Rs 5.69 lakh crore as of FY24, contributing 1.9% to India’s GDP and is estimated to grow to Rs 7.76 lakh crore by FY28,” the report said.
