Patanjali Foods Eyes Rs 1,000 Crore In Sales From Spices Business
Other than spices, the company will also scale up the biscuits and edible oil businesses.
Patanjali Foods Ltd. expects its spices business to generate sales worth Rs 1,000 crore in the years to come, as it looks to expand the category to unlock its next phase of growth.
Other than spices, the company will also scale up the biscuits and edible oil businesses, Patanjali Foods' Non-Executive Director Baba Ramdev said during the investor day on Tuesday. All this is part of Patanjali's broader plan to achieve an annual turnover of Rs 50,000 crore by 2028.
India’s branded spices market is set to double and touch Rs 50,000 crore by 2025. Branded spices will make up half of the spices sold in the country, according to a 2021 paper by investment bank Avendus Capital. Patanjali Foods, which entered into the space this year, will compete with the likes of Dabur India Ltd., ITC Ltd's Aashirvad, Tata Consumer Products Ltd.'s Sampann and Emami Ltd.'s Mantra.
The biscuits and confectionery business reported 27.8% growth in the first half of the current fiscal, according to the investor presentation.
The company said it has increased its direct retail coverage to 1 million outlets. It has also launched 7-grain, ragi and digestive biscuits as part of its premiumisation drive. And it expects premiumisation, new launches and "facelift of company in urban markets" to drive growth. Patanjali is expected to roll out handmade cookies and choco-chip cookies next year.
The company, which wants to reposition itself as a pure-play FMCG company, has seen the contribution from foods business increase to 28.5% of revenue in the first half of FY24, up from 18.4% a year ago.
Overall, its sales from the food and FMCG vertical stood at Rs 4,440 crore. The five-year goal for the food business, the company's Chief Executive Officer Sanjeev Asthana told BQ Prime earlier, was to cross revenue of Rs 22,000 crore.
The company's dependence on edible oil has come down to 72% from 80% in the previous fiscal, the presentation showed. Over the long run, the company expects 20% of its revenue to come from its old commodity business (edible oil) and 80% will be from food and FMCG, it said.
In its presentation, the company has listed six areas of focus:
Increasing share in food and FMCG business.
Responding to evolving market with swift product launch.
Reorientation of marketing and branding activities.
Omnichannel expansion in distribution.
Premiumisation drive across businesses.
Continued growth in oil palm business.
The top 10-20 brands will continue to grow for Patanjali Foods and will become even bigger over the next few years, Ramdev said. It is expanding in the untapped southern markets and is increasing reach through channels like modern trade, e-commerce and quick commerce.
In the foods business, it has launched premium products including a dry fruits range, millet-based cereals and health cookies to adapt to the preferences of contemporary consumers. Patanjali Foods has also launched 22 products and 35 stock-keeping units in the nutraceuticals segment under the Nutrela brand, according to the investor presentation.
During the investor day, Ramdev also refused to comment on merger, demerger or acquisitions the company plans to make in Patanjali Foods.
Shares of Patanjali Foods rose 5% on Tuesday to close at Rs 1,509.5 apiece on the BSE, as compared with a 0.63% gain in the benchmark Sensex.
