Indian fast-moving consumer goods (FMCG) companies, including Dabur India, Marico, and Emami, are actively seeking mergers and acquisitions (M&As) to expand their presence in new categories, build a digital-first portfolio, and increase their reach in traditional markets. The companies are looking to tap into the growing demand for premium personal care and wellness products, as well as healthy snacks and beverages. Despite a slowdown in urban consumption, the Indian FMCG industry reported an 11% year-on-year value growth in the March quarter, driven by rural demand.
To achieve their goals, these companies are adopting a multi-pronged approach, including investing in core brands, expanding into premium categories, and pursuing strategic acquisitions. Dabur, for instance, has outlined a seven-pronged strategy that includes investing in new-age healthcare, wellness foods, and premium personal care brands. Marico, on the other hand, is focusing on becoming a “house of brands” and is open to acquisitions that fit its digital transformation aspirations.
The consumer and retail sector has seen a modest 13% increase in deal volume in 2024, with strategic acquisitions dominating the M&A landscape. Companies like Tata Consumer Products, Hindustan Unilever, and Emami have made significant acquisitions in the past year, with a focus on premium, online-first brands and regional players.
Industry experts expect the M&A activity to continue, driven by the need for companies to stay relevant in a rapidly changing consumer landscape. Regional brands and direct-to-consumer (D2C) companies are expected to be key targets for acquisition, as they provide immediate scalability and access to local markets.
In terms of specific deals, Dabur acquired a 51% stake in hair care company Sesa Care in 2022, while Marico has invested in premium skincare brand Just Herbs and plant-based nutrition company Plix. Emami, meanwhile, has acquired stakes in male grooming, new-age personal care, and pet care brands.
Overall, the Indian FMCG industry is witnessing a significant shift towards premiumization, digitalization, and regionalization, driven by changing consumer preferences and behaviors. Companies that are able to adapt to these changes through strategic acquisitions and investments are likely to emerge as winners in the long term. With a growing middle class and increasing demand for health and wellness products, the Indian FMCG market is expected to continue to grow, driven by both organic and inorganic expansion.