NEW DELHI: Diversified conglomerate ITC Ltd has been putting more meat on the bones of his calls for achieving a target of Rs 1 lakh crore in revenue from its FMCG business by 2030. Taking inorganic route to support growth, the company has entered into a share-purchase agreement to acquire spice maker Sunrise Foods Pvt. Ltd.
“The proposed acquisition is aligned with ITC’s strategy to rapidly scale up its FMCG businesses in a profitable manner, leveraging its institutional strengths viz. deep consumer insight, a deep and wide distribution network, agri-commodity sourcing expertise, cuisine knowledge, strong rural linkages and packaging know-how,” the hotels-to-tobacco conglomerate said in a statement.
Analysts say that the move is positive as ‘spices’ is a high growth segment as consumers shift from unbranded to branded products with higher focus on trust and quality. “Spices fits squarely in ITC’s strategy to acquire a leader rather than building a brand from scratch. The Sunrise Foods deal will boost its share in east India,” said Abneesh Roy, senior vice-president, institutional equities, at Edelweiss.
ITC already sells spices under its Aashirvaad brand, popular in markets such as Telangana and Andhra Pradesh. For Sunrise, nearly 85 per cent of the sale comes from Bengal, where it is doing business for 70 years. It had clocked a turnover of Rs 600 crore in the last fiscal and has been growing 18-20 per cent year-on-year. “We are hoping to close the deal within a month,” said Mayank Bhardwaj, CEO and MD of Sunrise.None of the parties were ready to disclose the size of the deal but the market had earlier estimated it at Rs 1,800-2,000 crore.
The Sharma family-promoted company counts brands such as Everest Spices, Catch and MDH Masala as rivals.Apart from spices, the Sanjiv Puri-led firm is also evaluating some of the new food trends that gained momentum during the lockdown including Dalgona coffee, as part of its efforts to ramp up its foods portfolio.