In a move that will strengthen its position in the packaged food business, Adani Wilmar Ltd on Tuesday said it has acquired basmati rice brand Kohinoor’s India portfolio from McCormick Switzerland GMBH for an undisclosed amount. The company said in line with its focus on growing its presence in the branded staples segment, it is also to open to more acquisitions in the packaged food space.
The acquisition will give Adani Wilmar exclusive rights over the “Kohinoor ‘‘ basmati rice along with “ready-to-cook curries” and meals portfolio under the brand umbrella in India.
Angshu Mallick, Chief Executive Officer and Managing Director of Adani Wilmar told BusinessLine, “Our food business (non-edible oils portfolio) has grown at 34 per cent ( in FY 21-22) as compared with the previous year and to continue with this type growth we need to look at inorganic growth strategies. We also want to garner a sustained double digit growth in the rice segment. Hence, we felt brand Kohinoor fits well in this strategy. It is a versatile brand and we will have the option to extend this brand also to the non-basmati premium rice segment and we think it can be a big player in this segment. It will also help us tap into the rice-based ready-to-eat and ready-to-cook segments.”
He added that on an annualised basis Kohinoor will bring a value of of ₹250 crore in terms of topline.
1 lakh outlets
“We believe there is huge potential to expand the branded rice category and strengthen our market share further in the segment. We will leverage on our distribution strengths to ramp up the distribution of Kohinoor and also push it into the rural markets. The brand was being sold across only 30,000 outlets but we have a much wider distribution coverage of more than 1,00,000 outlets. The acquisition will add to our volumes in terms of both topline and bottomline. The brand is also doing very well in e-commerce and modern trade outlets,” he added.
Kohinoor was one of the early entrants in the branded basmati rice in the 1990s in the country. It ranks among the top players in branded basmati segment.
Asked if the company will look at further acquisitions in categories such as edible oils, Mallick said, “ We are already quite strong in the edible oils space and have capacities to grow the portfolio organically. While we are not closed to any inorganic growth opportunities but right now, we are not seeing any such opportunity in the edible oil space. In line with our strategy to grow the foods business, we will be glad to look at acquisition opportunities in categories such as rice, pulses or wheat flour.” The company said it is open to look at brands, assets or companies in the food space for acquisitions.
Rural market potential
For Adani Wilmar, nearly 35 per cent of the edible oils business and about 40 per cent of the branded staples business comes from the rural markets.
Talking about the rural growth outlook, Mallick said, “ We see huge opportunities in the rural market and we will have a separate go-to-market strategy for them to be able to expand to more and more rural outlets and appoint more rural distributors. We see the these markets doing well in the April-June quarter. As this is the post-harvest season when rural households have relatively better income in hand. Factors such as the wedding season during this period will also drive spends in these markets.”