Some of the country’s top fast-moving consumer goods (FMCG) companies are beefing up their presence in the Rs 25,000-crore branded spices and condiments market. The effort comes in the backdrop of the rapid shift from unorganised to organised in categories such as spices and masala and the need for convenient cooking aids.
“Lifestyles are changing fast and households today are looking for trusted names in spices. While regional brands have a strong local footprint, larger companies can take them national. For bigger players, this category is an important segment, since Indian food is incomplete without spices,” Dhanraj Bhagat, partner at Grant Thornton India, said.
In the last one year, companies such as Dabur, Wipro
The branded side, on the other hand, is growing at a 25% compounded annual growth rate (CAGR), according to estimates by Avendus Capital, and is expected to cross Rs 50,000 crore over the next few years. This will be led by rapid urbanisation, higher disposable incomes and limited time available for cooking at home.
Branded spices and condiments are increasingly coming to the rescue of time-starved people and larger companies are coming out with different variants for different cuisines to cater to this need, sector experts said.
“Categories such as masala and spices present an exciting growth opportunity for FMCG companies because of the sheer population dynamics and essential nature of the ingredients,” G Chokkalingam, founder and MD of Mumbai-based firm Equinomics Research, said.
Last week, there was news of Wipro Consumer Care and Tata Consumer looking to acquire a 51% stake in Chennai-based Aachi Masala for Rs 1,000 crore. For both companies, the acquisition will be important, given that the two players have been growing their presence in the south. At a larger level, if the deal fructifies for any of the above companies, it will be a key acquisition in the category, after Dabur snapped up Badshah Masala for Rs 587 crore in January this year.
Bengaluru-based Wipro Consumer Care, on the other hand, acquired two Kerala-based brands – Nirapara and Brahmins – both into packaged spices – in December 2022 and April 2023 each for an undisclosed amount. While Tata Consumer has indicated that it wishes to expand into the southern spices market as part of its larger endeavour to grow its business there.
“We are expanding our presence in south India across tea, coffee, salt and spices with the launch of south-specific products to cater to regional consumers,” Tata Consumer said in its FY23 annual report about its future growth plans.
In spices, the company has used its Tata Sampann brand to launch a range of spices for the southern market in the last few months.