Adani Wilmar Plans to Enter into The Ind ...

Adani Wilmar Plans to Enter into The Indian Spice Market Through M&A

Mar 20, 2024

Adani Wilmar, which happens to be one of the wholly-owned subsidiaries of the Adani Group, is planning to expand its business portfolio through M&A in the upcoming months. The acquisition targets are going to be based in the south as the company now plans to make an entry into the spice market, and the southern regions of India are known for their extensive spice reserves. Adani Wilmar has always been focused on the food and FMCG segments. The company is also aiming to set foot in the 20 billion USD Indian spice market by the acquisition of some of the most reliable regional brands in India. This is going to give the business of Adani Wilmar an excellent boost after the Adani Group controversies. It will also take up the position of being one of the most reliable FMCG companies in India.

Adani Group's Entry into The Indian Spice Market

Adani Wilmar is looking forward to acquiring some of the strongest regional brands in the south that already have leadership positions in the markets in which they operate. The Indian spice market is known to be extremely fragmented. Over 60% of the market is in the hands of unknown players. In fact, there are no true national players in this market. However, companies like MDH and Everest Food Products have been able to build excellent reputations for themselves across the country. Bengaluru-based MTR Foods is also gaining extraordinary recognition in the north because of its range of products.

The Adani Wilmar acquisition targets will be based mainly on the south. The company already reported INR 58,185 crore in revenue in FY23. It sells different kinds of staples under the Fortune brand. This includes sugar, wheat, rice, pulses and soya chunks of premium quality. The company also has a wide range of rice varieties under its name, including Basmati rice. Its entry into the spice segment will boost the overall economy of the country. Edible oil currently accounts for 62% of Adani Group's portfolio in terms of volume and 76% in terms of value. FMCG and food accounts for 17% in volume and 10% in value. These segments are also growing very fast.

The edible oil sector is growing at 7 to 8 %, and FMCG and food are growing at 30%. The easiest way by which Adani Wilmar can give its portfolio excellent growth is by taking the help of acquisition. This will not only allow the conglomerate to make its entry into a new segment, but it will also be able to ramp up sales really easily. The conglomerate will also be able to recover from the losses that it suffered during the Adani Group controversies.

Why the Spice Industry?

Adani Wilmar is currently a market leader in edible oil. It has a nearly 20% market share in this market. The company has also been expanding its food products for quite a while now, and it has set its eyes on the spice segment. As you know, India is the largest spice exporter, and the market size of the spice industry is expected to reach 36 billion USD in the coming four years. By making an entry into the market, the Adani Group will be able to tap excellent revenue, which it can use for its other business operations. This will give the Adani Group's overall revenue enhanced stability and will also allow it to prosper to an extraordinary level.

Adani Wilmar has previously been focused on producing oil and other food products. Now, it plans on expanding its horizons by making an entry into the spice market, which also happens to be one of the most crucial markets in the Indian business scenario. This market has an excellent potential for growth and is also expected to give Adani Wilmar extraordinary scope for further expansion. It is expected that in the upcoming months, the company will also release various new and advanced varieties of products in the market.

The Adani Group already has an extraordinary experience in the infrastructure and logistics development sector. This will give the Adani Group an added advantage. It will also be able to streamline its supply chain and offer better services to customers. Leveraging its existing international presence and logistics network, the Adani Group can also increase India's spice exports and tap the international market. Again, this is going to be an extraordinary source of revenue generation for the business group.

Conclusion

Adani Wilmar's entry into the Indian spice market has given the Adani Group business excellent exposure. It has also brought an end to Adani Group controversies. In the upcoming years, we will witness the conglomerate take up more such extraordinary ventures, which will allow our country to experience growth and prosperity on a global scale.

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