Welcome to this week’s edition of TOPICAL WEDNESDAY! This week, we delve into the changing dynamics of the fast-moving consumer goods (FMCG) sector of India. The Indian FMCG landscape is undergoing a seismic shift driven by shifting consumer preferences and fierce competition. From pricing wars to billion-dollar acquisitions, the sector is redefining how companies compete, innovate, and grow in one of the world’s most dynamic consumer markets.
Let’s explore three recent developments—Haldiram’s historic merger and private equity investment, Coca-Cola and PepsiCo’s response to Reliance’s Campa Cola, and Adani Wilmar’s bold acquisition strategy—that illustrate how the FMCG landscape is changing like never before.
A $10 Billion Milestone: Haldiram’s Transformation and FMCG Evolution
In a landmark deal that captures the changing face of India’s consumer goods landscape, Haldiram’s—a brand synonymous with Indian snacks—has secured a $1 billion investment from a private equity investor. Let’s delve into its rich history and explore the details behind this landmark deal.
The Birth of Haldiram
Haldiram’s began its journey in 1937 when Ganga Bhishen Agarwal, fondly called Haldiram Ji, revolutionized the traditional bhujia which quickly gained popularity in Bikaner and laid the foundation for the brand’s success. In the 1940s, Haldiram Ji expanded to Kolkata, marking its first major leap outside Rajasthan. By the 1980s, Haldiram’s had become a household name in Eastern India. The next wave of growth came when his grandsons split operations to focus on different territories: one established Haldiram Snacks in Delhi, dominating North India, while another expanded into Nagpur to cater to Western and Southern India. Manufacturing plants were strategically set up in Delhi, Nagpur, and Jaipur during the 1970s and 1990s, allowing each unit to operate independently but thrive due to their shared commitment to quality and innovation
Haldiram Unites and Expand
Fast forward to today, Haldiram has taken a historic step toward unification. The Nagpur-based Haldiram Foods Private Limited and Delhi-based Haldiram Snacks Private Limited have merged into a single entity named Haldiram Food and Snacks Private Limited. This merger resolves decades-long brand ownership disputes and combines their strengths into one cohesive operation. The unification is expected to streamline manufacturing and distribution networks, enhance operational efficiency, and bolster Haldiram’s position as a global snack powerhouse.
But that’s not all—the big news doesn’t stop here! In a landmark move, Haldiram’s has sold a 10% stake in its snacks business to Singapore’s state investment firm Temasek for $1 billion (~Rs. 8,600 crore), valuing the iconic Indian brand at an impressive $10 billion.
The path to this deal wasn’t straightforward. Earlier, private equity giants like Blackstone and Bain Capital had shown keen interest in acquiring stakes in Haldiram’s. Blackstone spent seven months negotiating for a minority stake but exited due to disagreements over valuation and management involvement. While Blackstone proposed an $8 billion valuation with strategic input into operations and sought an IPO within three years, Haldiram insisted on its $10 billion valuation and preferred investors with passive roles while targeting an IPO within five years.
Temasek emerged as the frontrunner due to its alignment with Haldiram’s vision. Known for its investments in Manipal Hospitals and Devyani International (operator of KFC and Pizza Hut), Temasek views Haldiram’s as a “prized asset” that complements its portfolio while tapping into India’s booming snacks market. With Haldiram holding nearly 13% of India’s $6.2 billion savory snacks market, this partnership is poised to unlock new growth opportunities.
From bhujia sold for Rs. 10 in mom-and-pop stores to being valued at $10 billion by international investors, Haldiram’s journey reflects the sweeping changes in India’s FMCG landscape. The Temasek investment highlights how traditional family businesses are evolving into global investment opportunities by professionalizing operations—a testament to the dynamic shifts shaping India’s consumer market today.
Cola Wars 2.0: Global Giants Take on Local Disruptor Campa Cola
The Indian FMCG sector has become so competitive that global giants like Coca-Cola and PepsiCo are rethinking their strategies to counter Reliance Consumer’s Campa Cola. This Rs. 10 pricing strategy is unique to India, specifically designed to combat Campa Cola’s disruptive approach, and is not part of Coca-Cola’s global playbook.
Campa Cola’s Resurgence
Campa Cola, a popular brand from the 1970s and 1980s, has made a comeback under Reliance Industries, which acquired it in 2022 for Rs. 22 crores. Reliance has strategically relaunched Campa Cola to challenge global giants like Coca-Cola and PepsiCo. Starting with key markets like Andhra Pradesh and Telangana, the brand is steadily expanding its reach across India and has already secured over10% market share in several states.
Strategic Pricing to Counter Campa
Coca-Cola and PepsiCo have launched no-sugar and light variants priced at Rs. 10—a direct response to Campa Cola’s disruptive pricing strategy. While this pricing is not highly profitable for Coca-Cola and PepsiCo, it serves as a strategic move to defend market share without compromising the premium positioning of their flagship products.
Focus on Healthier Choices
The demand for low-sugar and no-sugar drinks has surged in India, doubling sales last year to Rs. 700–750 crore. Urban consumers are driving this trend as they increasingly opt for healthier beverage options. To cater to this shift, Coca-Cola and Pepsi have expanded its portfolio with no sugar 200 ml bottles priced at Rs. 10. These launches target health-conscious consumers while aligning with the growing preference for smaller packs that fit modern lifestyles.
Regional Strategy and Market Dynamics
Both Coca-Cola and PepsiCo are focusing on key markets like Andhra Pradesh and Telangana, which account for nearly 20% of aerated drink sales in India—regions where Campa Cola first gained traction. Beyond pricing wars, they are leveraging bundling offers and occasion-based promotions to sustain profitability as Campa Cola continues its national rollout through offline stores and quick-commerce platforms.
The Bigger Picture
Coca-Cola and PepsiCo’s aggressive push into no-sugar drinks underscores broader industry trends toward health-conscious products and smaller pack sizes. However, the real story lies in how these global giants are being forced to compete head-on with a local disruptor in one of the world’s most dynamic consumer markets. This clash between established multinationals and an emerging player like Campa Cola signals the shifting power dynamics in India’s FMCG sector—where no brand, global or domestic, is immune to disruption in this highly competitive landscape
Adani Wilmar’s Billion-Dollar Bet
Adani Wilmar is embarking on an ambitious expansion spree, setting aside a massive $1 billion acquisition fund to bolster its footprint in India’s fast-growing packaged consumer goods (FMCG) market. The company, known for its flagship Fortune brand, plans to acquire at least three well-established brands specializing in spices, ready-to-cook foods, and packaged edibles. This marks its most aggressive capital expenditure plan to date and reflects its commitment to becoming a dominant player in the FMCG space.
Aiming for FMCG Leadership
Adani Wilmar has set a bold target of deriving 25-30% of its total revenue from consumer-facing sectors like food and FMCG over the next few years. To achieve this, the company is focusing on southern and eastern India for acquisitions, where regional brands have strong consumer loyalty but lack the resources to scale nationally. By integrating these brands into its portfolio, Adani Wilmar aims to unlock their growth potential and expand its market reach.
Strategic Growth Through Acquisitions
This isn’t Adani Wilmar’s first venture into strategic acquisitions. In 2022, it acquired the Kohinoor brand, gaining exclusive rights to premium basmati rice and ready-to-eat curries. This move not only enhanced its product portfolio but also positioned it as a leader in premium food categories. With the new acquisitions, Adani Wilmar seeks to replicate this success by tapping into high-demand categories like spices and ready-to-cook meals.
What Lies Ahead?
Adani Wilmar’s billion-dollar shopping spree signals a transformative phase for the company. By acquiring regional powerhouses in key food categories and scaling them nationally, it is poised to redefine India’s FMCG landscape. With a clear vision and robust investment strategy, Adani Wilmar is not just strengthening its market presence—it’s setting the stage for exponential growth in one of the world’s most dynamic consumer markets.
Closing thoughts
The Indian FMCG sector is a battlefield of strategy and adaptability. As global giants face local challengers and family brands embrace billion-dollar deals, India’s FMCG sector is turning into a high-stakes arena. With so many changes happening across the sector every day, only the time will tell who will establish and maintain dominance.
If you liked this newsletter, don’t forget to share it. Also, feel free to share your thoughts on X, where you can find us as @bastionresearch.
Disclaimer: This newsletter is for educational purposes only and is not intended to provide any kind of investment advice. Please conduct your own research and consult your financial advisor before making any investment decisions based on the information shared in this newsletter.
😂Meme of the Week🤣
Follow us
If you are a diligent investor, you would not want to miss checking out our research platform, where we share insightful research on companies regularly. Gain access to our sample research by clicking on the button below.
