The ready-made masala or ready to cook spice industry is seeing a lot of action with the entry of new players such as Dabur and Wipro Consumer Care and Lighting. The action in a market that is largely dominated by regional players is an indication of the myriad opportunities, including the ability to expand horizontally, large volumes, and better margins, offered by it, according to stakeholders.

Recently, FMCG major, Dabur acquired 51 per cent equity shareholding of Badshah Masala for ₹587.52 crore. Wipro Consumer Care and Lighting announced the acquisition of a Kerala food brand, Nirapara, with aspirations to become a significant player in the snack food, spices, and ready-to-cook markets. However, Wipro did not disclose the deal amount. In 2007, the spices business of Mavalli Tiffin Rooms (MTR) was acquired by Norwegian conglomerate Orkla.

Additionally, companies, including HUL and Reliance Retail, were also reported to be in the discussion of entering the spice segment through the acquisition of MDH and Aachi. However, the companies later denied any such developments.

Preference for regional flavours

Mohit Malhotra, CEO, Dabur India, told businessline that the branded spice market is growing at a double-digit rate because of factors such as a rise in consumption, a shift from unbranded to branded products, and a growing preference for regional flavours across states. “As the market is dominated by regional players, it holds significant potential for growth in the future,” he added.

Similarly, even Wipro Consumer Care believes that since the industry is highly fragmented and 77 per cent of the category is currently unorganised, there is room to switch consumers from unorganised to organised and gain shares. “The attraction in the spice category comes from it being a big category growing at 10 to 12 per cent,” said Anil Chugh, President, Food Business, Wipro Consumer Care and Lighting.

Packaged goods market

Because the Indian palate is masala-oriented and offers a variety of masalas such as dry masala, wet masala, garam masala, and more, there is a huge scope for more players to enter the packaged masala market, according to branding and marketing expert, Harish Bijoor. “The packaged masala market is viewed as having large volumes, being customisable, therefore, there is great excitement in the space.”

“Any major company entering the packaged goods market is aware that in order to go up the value chain and achieve higher profits, they must offer differentiated products. Players like Wipro and Dabur are margin conscious, so the opportunity to increase margins and expand horizontally is appealing to them,” he added.

Dabur evaluates the branded spice market in India as more than ₹25,000 crore and the unbranded market as an additional ₹25,000 crore. While Wipro Consumer Care and Lighting estimates the spice category to be worth ₹72,000 crore in India.

Outlook for the masala industry

The addition of new players to the industry will give a push to the traditionally unorganised industry, said Bijoor.

“Such consolidations will improve the industry as bigger companies bring quality, standardisation, and trust with them. Also, the industry has mostly seen regional players, and it gets difficult for those brands to expand their business to other geographies. So, a great strategy would be for one parent company to own nine different brands and have different plays in different markets,” he noted.

Similarly, Wipro also believes there is a significant market opportunity in this space. “We recognise that spices are core to Indian cooking, and the mix changes from region to region with strong regional preferences. There is a huge opportunity in this space for shifting consumers from an unorganised to organised market by offering authentic, pure, and trusted spice mixes,” Chugh had said when the acquisition was announced.

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