Ghodawat Consumer Ltd., the consumer goods arm of Sanjay Ghodawat Group that retails home and personal care products, staples, and snacks, has acquired packaged foods brand, To Be Honest, to strengthen its premium packaged goods portfolio.
To Be Honest offers a range of vegetable and fruit snacks, including okra, ripe jackfruit, beetroot, mixed sweet potato, chickpeas and tomato chips. It was founded by IIT and IIM alumni Mayank Gupta, Ritika Agrawal and Anuj Ghanghoria in 2017.
Last year in November, Ghodawat Consumer acquired Mumbai-based non-alcoholic beverages brand Coolberg.
The move hints at a rising trend of enterprises scouting for direct-to-consumer brands to tap into niche and emerging consumer brands.
“We want to be enablers for companies that have built a good product and created some sort of a niche within their space either as category innovators or have clocked $1 million to $2 million revenue in that ecosystem. We can help them to make it a $10 million to $20 million revenue company,” said Shrenik Ghodawat, managing director of Kohlapur-based Ghodawat Consumer.
Valuations for D2C brands have rationalised over the last 12 months as private equity funds and venture capital firms are going easy on funding companies, he added.
Over the next 12 months, the firm seeks to back more home and personal care brands.
To be sure, its products are largely low-value sold in over half-a-million outlets. It sells the Star brand of packaged atta, edible oil, flavoured milk, ghee, rice, pulses, namkeens, salt, jaggery, sugar, snacks and water. It also retails the Ayurstar brand of personal care products such as hair oil, shower gel and handwash. Its beverages portfolio consists of brands such as Fizzinga and Frustar. It also sells floor and toilet cleaners, dishwash gel, air fresheners, and washing powder.
“Adding more categories is something that we are looking at,” Ghodawat said. “We have started exploring acquisition opportunities in the home and personal care space, especially across brands that have made a particular niche or created some sort of revenue base for themselves GCL will use its existing presence in offline general trade to help the acquired brands grow.”
Meanwhile, the company is also stepping up investments in its packaged consumer goods business which includes agro-commodities, savoury snacks and cattle feed products as it plans to grow its revenues five fold over the next five years. The company’s consumer goods business stood at Rs1,400 crore in FY22.
“We are expanding our footprint of manufacturing. We are now setting up a greenfield project for edible oil refinery and extraction in Dharwad in Karnataka. We’ve already acquired a wheat flour unit in MP (Madhya Pradesh). We are expanding our rice milling business in south of Karnataka. We are also exploring acquiring a rice milling unit in Andhra Pradesh or Telangana. We are slowly expanding our footprint around these places to be closer to the market,” Ghodawat said.
In FY22 as well as year to date, the company has invested ₹300 crore. “We are earmarking another ₹200 crores for FY24, this includes investments or acquisitions in both D2C brands as well as manufacturing,” he said.
