Edible oil maker and FMCG company Adani Wilmar is planning to make an entry into the $20 billion Indian spice market through the acquisition of regional brands.

The company, which is a market leader in edible oils with a near 20 per cent market share, has been expanding its portfolio of food products and has now set its sights on the spices segment, sources said.

India is the world’s largest spice exporter, and the market size is expected to expand to $36 billion in the next four years.

Acquisition targets

The company is learnt to be looking for strong regional brands that have a leadership position in the markets where they operate. The Indian spice market is extremely fragmented, with well over 60 per cent of it in the hands of unorganised players who have a firm hold in specific regions. There are no true national players, though Everest Food Products and MDH can be found in most supermarkets across the country, while Bengaluru-based MTR Foods, which also makes ready-to-eat foods, is gaining recognition in the north.

The acquisition targets are likely to be based in the south, as the company has a focus on this market for the food and FMCG segments.

Adani Wilmar, which reported a topline of ₹58,185 crore in FY23, sells an array of staples under its Fortune brand. This includes rice, wheat, pulses, sugar, rawa, maida, and poha. It also sells soya chunks, while it sells premium basmati rice under the Kohinoor brand. The foray into spices would be a natural progression for the company as it expands its offerings in the food segment.

Edible oils account for 62 per cent of its portfolio in terms of volumes and 76 per cent in value. Food and FMCG account for 17 per cent in volume and 10 per cent in value, and they are growing fast. In the medium term, edible oil is seen growing at 7-8 per cent and food and FMCG at 30 per cent. Acquisitions are the fastest and easiest way to enter a segment and ramp up sales.

The Adani Group, which is focused on the infrastructure sector in a big way, had put Adani Wilmar on the block as part of its strategy to exit non-core areas and use its resources optimally. However, that plan has been put on the backburner for the present as it has been unable to get the right pricing. The divestment is not totally off the table, and it is exploring options, including bringing in a strategic investor.