Tata Consumer Products Ltd (TCPL) on Tuesday said it has signed a definitive agreement to acquire a 100% stake in Kottaram Agro Foods—the maker of Soulfull brand of breakfast cereals and millet-based snacks.
The company has agreed to acquire 100% of the issued and paid-up equity share capital of Kottaram Agro Foods for consideration of Rs155.8 crore, TCPL said in a filing to the exchange.
The said acquisition is in line with the company’s strategic intent of entering into new adjacent categories in the food space, it said in its filing.
The deal now gives Tata Consumer Products a stronger play in the packaged foods market; it already sells pulses, spices and ready-to-cook mixes under the Tata Sampann brand. It also sells beverages under Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand brands in India and overseas.
The announcement underlines significant investor appetite for packaged food brands that reported brisk business as the lockdown prompted more Indians to eat at home, cook more meals and also accelerated adoption of unbranded to branded foods.
The pandemic has also helped consumer pivot towards healthy foods and snacks.
This acquisition will allow TCPL to expand its product portfolio into the fast-growing ‘on-the-table’ and ‘on-the-go’ categories and to participate in newer consumption occasions, the company said.
The acquisition will open up new market opportunities for the company that has been expanding its distribution in the country and building stronger foods and beverages play.
“This acquisition is a good strategic fit for Tata Consumer Products. It opens to us significant new market opportunities in the fast-growing mini-meals segments and helps us partner a passionate and ambitious team of entrepreneurs who will remain and become a part of Tata Consumer Products team,” said Sunil D’Souza, MD & CEO, Tata Consumer Products.
Tata Consumer Products will scale up the presence of Soulfull given the growing consumer need of healthy and convenient food options.
‘Soulfull’ was launched in 2013—it currently sells a range of millet-based products such as breakfast cereals and snacks such as Ragi Bites, Millet Muesli etc. The brand currently has a strong presence in urban markets of South, West, and North India. The company was founded by Prashant Parameswaran, Rasika Prashant, Dr K K Narayanan and Amith Sebastian. Kottaram Agro Foods posted a turnover of ₹39.38 crore in FY20.
TCPL has also been working on building its reach and distribution in the Indian market. In May 2020, Tata Consumer Products also acquired PepsiCo’s stake in NourishCo Beverages Limited—a 50:50 joint venture between the two companies that housed brands such as Himalaya packaged water and GlucoPlus.