Dabur India Ltd, Marico Ltd and emami lTD will continue to search for mergers and acquisitions (M&AS) to help them enter new categories such as advanced personal care and health care, build digital-first portfolios, and expand coverage in traditional markets based on their revenue calls.
“If there is a new brand or category to be addressed, it is to acquire and complement our efforts to the organic business with an inorganic business,” Mohit Malhotra, CEO of Dabur India, said on the company’s annual revenue call on May 7.
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Large fast-moving consumer goods (FMCG) manufacturers have built mass-market portfolios including soaps, salts, cookies, shampoos and more to provide a wider reach. However, new urban consumers are increasingly buying skin serums, milk vegetarians, supplements, pet foods, and healthy snacks or drinks. Some new brands, especially online brands, have even gained market share from existing businesses. This shift is happening when demand for mass-market products has been under pressure due to increased inflation.
According to Nielseniq, the Indian FMCG industry reported a year-on-year increase of 11% in the March quarter, while the volume rose by 5.1%. However, in urban areas where consumption has slowed further, rural demand is growing four times faster than urban areas.
Deloitte India partner Jayakrishnan Pillai said rural demand mainly facilitated $2.1 billion in deals in 2024. The consulting firm expects the industry to grow at 6-8% in 2025-2026, compared with 5-6% in the past two years, due to support from improved urban demand, stable rural consumption, reduced personal income tax and reduced inflation.
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“More emphasis on premium products, health and wellness, and expansion of rural markets may be the main motivation for strategic acquisitions, and the integration of e-commerce and digital advancements can facilitate integration in the industry,” Pillai said.
Trading Hunting
FMCG continues to engage in a large-scale acquisition blitz. Last week, Dabur outlined a seven-dominate approach as part of a strategic refresh and planned to invest in core brands, expand on premium categories, update its products and actively engage in acquisitions to build a portfolio of “future fits.”
Last year, the manufacturer of Vatika oil and real fruit drinks has received 51% of hair care company Sesa Care Pvt. Limited, expanded its ₹9 billion Ayurvedic oil market. The company cites the deal’s “large revenue and cost synergy.” In 2022, Dabur acquires 51% stake in spice maker Badshah Masala ₹58752 million.
The company’s M&A approach will focus on new era healthcare, healthy food and high-quality personal care brands.
“it [target firm] “The second one will be a little softer because the growth of general trade is a little softer,” Malhotra said.
Mumbai-based Marico is also targeting becoming a “brand home”, and the acquisition is crucial to transforming it into a digital fast-moving consumer company.
Marico’s recent investments include owning a majority stake in premium skincare brands in 2021, most of which have acquired plant-based nutrition company Plix, a full acquisition of male beauty brand Beardo, and an investment in real elements of food brands. All of these are relatively new brands and categories.
“We strongly believe that given our brand house, we are the ‘the first-choice investor’. We are aspiring to be one of the most successful digital rapid committee companies. Mint Thursday. “We will open (acquisition) if it’s right. There are still some portfolio gaps in our digital basket. We think there are enough opportunities for food and personal care.”
Consumer and retail transaction volumes in 2024 grew 13% in 2024, according to data shared by consulting firm Grant Thornton Bharat.
According to the company’s January report.
Region, D2C focus
Earlier this year, India’s largest FMCG company, Hindustan Unilever Ltd, has a 90.5% stake in the personal care brand Minimalist ₹$29.55 billion, raising the ante in the digitally-first personal care sector.
HUL’s M&A strategy is to invest in the portfolio of established brands and new era brands. Hul got Indulekha hair oil ₹Rs 3.3 billion in 2015 and Horlicks of GlaxoSmithKline ₹In 2020, $304.5 billion. Recently, the company’s focus has shifted to premium, online-first brands such as minimalism and health and supplement brand Oziva.
HUL CEO Rohit Jawa said in a tribute call with the media last month that the acquisition is one of HUL’s tools to grow its business.
For example, the company has a good brand and ability in food, but if the opportunity provides a complementary fit with a good business case, the company will definitely consider it. HUL has been scanning for such opportunities. He said the key strategy is to continue investing in and developing its market makers (category identified by HUL as premium) and Future Core (Future Trend Temptation) segments to drive overall business growth.
Deloitte India’s Pillai said the growth of the merger is expected by regional brand and direct-to-consumer (D2C) companies. “Regional brands can immediately provide scalability and access to local markets, and established D2C companies, especially those with strong digital and e-commerce capabilities or those engaged in rapidly expanding the health and wellness sector, represent attractive acquisition targets.”
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Kolkata-based Emami Ltd, known for brands like Zandu Balm and Boroplus, said it has cash available and is designed to invest in traditional and direct-to-consumer or D2C businesses. Emami’s recent acquisitions include stakes in men’s beauty, new era personal care, packaged beverages and pet care brands.
Harsha V. Agarwal, vice chairman and managing director of Emami, said competition in the market is driving the company to strengthen innovation.
“We are looking for more acquisition opportunities. We are willing to accept smaller acquisitions and large acquisitions,” he said in an interview. Mint last month. “The opportunity has to be good. Investment is not a limit for us because we are a debt-free company with good PAT (after-tax profit) and EBITDA (operating income).
