D2C healthy snacks brand, Catalina Crunch, has appointed Doug Behrens as Chief Executive Officer (CEO). Behrens will lead Catalina Crunch into its next phase of growth, concentrating on expanding the brand’s retail presence at a time when the company’s demand is at an all-time high. This significant announcement builds on Catalina Crunch’s recent progress as the company continues to invest in hiring top talent for its executive team.
“I am thrilled to welcome Doug Behrens to the Catalina Crunch team. Hiring him is instrumental to get us to the next level as our needs as a company have changed. We are very excited about the future and look forward to building on the success that has defined the brand to date,” shared Krishna Kaliannan, Catalina Crunch’s Founder.
“I’ve been very impressed with the explosive growth of Catalina Crunch and excited to join the team for the next chapter. The better-for-you food and snacking space is incredibly dynamic and Catalina is well positioned to be a disruptive leader,” shared Doug Behrens.
Drawing upon a wealth of experience in the food and health sector, Doug Behrens boasts a proven track record of propelling growth and fostering innovation. With leadership roles at Johnson & Johnson, Danone, Amplify Snack Brands, and his most recent position as the President and Chief Customer Officer for KIND, Behrens brings a seasoned perspective to Catalina Crunch. His strategic vision harmonizes seamlessly with Catalina Crunch’s dedication to delivering wholesome, delicious, and innovative products to our esteemed customers.
Krishna Kaliannan continues to play an active role in the daily operations of the business as the Founder, while Joel Warady, the current President of Catalina Crunch, will pursue a new opportunity following a remarkable tenure marked by substantial company growth. This transition is viewed as a positive move, underscoring the company’s commitment to ongoing enhancement and enduring expansion.
Following the recent introduction of Catalina Crunch’s latest product, Dark Chocolate Cookie Bars, and its thrilling collaboration with NBA player Jalen Brunson, this significant announcement signifies the brand’s strategic positioning for further growth. Catalina Crunch is poised to extend its product range, venture into new markets, and solidify its status as a pioneer in the health food industry. The brand’s steadfast dedication to quality, transparency, and customer satisfaction remains resolute, with this appointment playing a crucial role in sustaining that success.
Tesco, the largest retailer in Britain, revised its profit forecast for the second time in four months. This adjustment comes as the company disclosed a stronger-than-anticipated increase in underlying UK sales during the key Christmas trading period, driven by heightened demand for fresh food.
Shares in the supermarket group, holding almost 28% of Britain’s grocery market, rose by 1% early on Thursday. This extends the gains over the past year to 23%, following the company’s announcement of “great momentum” heading into 2024.
CEO Ken Murphy expressed a “cautiously optimistic” outlook regarding the well-being of the UK consumer. He pointed out that mortgage rates were beginning to decline, fuel prices were decreasing, and there was robust growth in wage rates.
“So as long as we are in a full employment market I feel like we’re in a period of relative stability,” he said.
Tesco reported sales of more than 1 million fresh whole turkeys, turkey crowns, and joints, along with over 57 million mince pies and 6.6 million bottles of Prosecco.
“(Consumers) were really determined to enjoy Christmas and they came out in force, they were really pleased to see that the rate of inflation continues to fall in food,” said Murphy.
Tesco noted that it had additionally experienced increased demand for its premium product lines and the widespread popularity of its loyalty program.
As a result, it said that it now expects retail adjusted operating profit, its key profit figure, to reach 2.75 billion pounds ($3.5 billion) in the year ending February 2024, up from 2.49 billion pounds last year.
It had earlier projected a range of 2.6-2.7 billion pounds.
Consumer Spending Trends Impact Tesco and UK Retail
Trading updates from UK retailers and industry data indicate that, during Christmas, consumers prioritized spending on food rather than on more discretionary general merchandise. This trend reflects the challenging economic conditions in Britain.
Industry data, published on Tuesday, showed sluggish UK retail sales in December, adding to concerns that the economy has tipped into a mild recession after soaring inflation forced the Bank of England to hike interest rates to a 15-year high of 5.25%.
For Tesco, during the six weeks leading to January 6, its UK like-for-like sales surged by 6.8%, surpassing analyst expectations of about 5%. In the third quarter until November 25, the sales showed a growth of 7.9%, following an 8.4% increase in the second quarter.
Similar to its smaller counterpart Sainsbury’s, which disclosed robust food sales on Wednesday, Tesco is reaping the rewards of a strategy that involves aligning prices with the discount retailer Aldi on essential items.
Its Clubcard loyalty program, offering discounted prices to members, is contributing to its success due to its widespread popularity.
The funding for these programs is derived from a strategy aimed at reducing 1.1 billion pounds in costs from the business over the two-year period ending in February 2024.
Similar to Sainsbury’s, Tesco has seen advantages from consumers opting to save money by cooking and entertaining at home instead of dining out. Sales of its upscale “Finest” range have surged by 17%.
Murphy anticipated a “minimal impact” on Tesco from disruptions to shipping in the Red Sea, noting non-food products represent just 7% of total sales.
On Thursday, Marks and Spencer, a retailer specializing in clothing and food, announced a stronger-than-anticipated 8.1% increase in sales during the Christmas trading period.
Bakingo, the online bakery platform, has kicked off the year 2024 by unveiling its cutting-edge ‘super kitchen’ located in Gurugram. Covering an impressive 27,000 square feet across three meticulously planned floors, this facility seamlessly combines automation with skilled human expertise. As Bakingo advances in its quest to reshape the culinary scene, the inauguration of this state-of-the-art kitchen marks a noteworthy stride in its journey toward establishing itself as a national bakery brand.
This strategic expansion not only strengthens Bakingo’s ability to cater to a myriad of customer tastes across different occasions but also emphasizes its commitment to delivering unparalleled culinary excellence. The expanded facility positions Bakingo to enhance its services, providing a platform for introducing a diverse range of new varieties and products, thereby enhancing the overall customer experience.
Bakingo sets itself apart through a steadfast commitment to quality, achieved by meticulously selecting premium ingredients and adopting a consumer-centric approach. This dedication is clearly mirrored in its diverse product range and extensive variety. As part of its continuous quest for excellence, Bakingo is devoted to investing in new infrastructure, aiming not only to expand but also to strengthen its nationwide presence, guaranteeing an enhanced experience for all.
Himanshu Chawla, Founder & CEO of Bakingo, said, “This new super kitchen is a testament to the relentless dedication, meticulous planning, and an unwavering commitment to excellence. At Bakingo, our core values—quality, consistency, scalability, and a customer-first approach—have shaped the foundation of this culinary innovation. From the inception of an order to that delightful first bite, our super kitchen is poised to redefine the entire culinary experience. It symbolizes a significant stride in our nationwide expansion journey, embodying our vision for the future of Bakingo. We are eager to continue delighting our customers with delectable and unforgettable treats throughout the year, setting a new standard for excellence in the world of desserts.”
Coca-Cola has opted to refranchise its company-owned bottling operations in three regions in India. The beverage powerhouse announced on Friday that it is refranchising the bottling operations in Rajasthan, Bihar, North-East, and parts of West Bengal from its bottling subsidiary, Hindustan Coca-Cola Beverages Pvt Ltd, to its existing bottlers.
With this move, the North, North-East, and West Bengal territories will henceforth be entirely managed by independent bottlers on behalf of the company. Coca-Cola presently maintains partnerships with 11 bottlers in India. A similar refranchising initiative was previously undertaken by the company in 2019 in the Northern region.
The Rajasthan market will be owned and operated by Kandhari Global Beverages, which includes Enrich Agro Food Products Pvt. Ltd. and Kandhari Beverages Pvt. Ltd. They are currently operating in parts of Delhi, Himachal Pradesh, Haryana, Punjab, Chandigarh, Jammu & Kashmir, and Ladakh.
Meanwhile, SLMG Beverages Pvt. Ltd. will take ownership and operation of the Bihar market. They are currently engaged in operations in Uttarakhand, along with certain areas of Uttar Pradesh, Madhya Pradesh, and Bihar.
The North-East market, along with select areas of West Bengal, will be owned and operated by Moon Beverages Pvt. Ltd. Currently, they are operating in parts of Delhi and Uttar Pradesh.
Juan Pablo Rodriguez, CEO, HCCB India, said, “This business transfer marks a significant decision for Hindustan Coca-Cola Beverages. It ensures the right level of investments can be undertaken in all parts of the business, while bringing both scale and contiguity to the business. We are in the long-term growth prospects of our beverages business in India and believe this move will help accelerate the Coca‑Cola system, enabling us to win in the market and provide greater value to local communities.”
Future Growth: Coca-Cola’s Plans for New Plants in Gujarat, Telangana, and Maharashtra
HCCB presently manages 16 factories across India. In recent announcements, the company has revealed intentions to establish new plants in states like Gujarat, Telangana, and Maharashtra.
Sundeep Bajoria, Vice President, India Operations, Coca Cola India, said, “We are committed to building stronger and more sustainable local businesses in India As we set ourselves for further growth in the Indian market, these transfers will direct investments into innovation, infrastructure, technical capabilities, talent acquisition and business expansion while strengthening existing capabilities to deliver unparalleled beverage experiences to our consumers.”
Shares of FSN E-commerce, the parent entity of the beauty e-commerce platform Nykaa, saw a decline of up to 2.5% following a likely huge block deal.
Nykaa’s shares were being traded at INR 188.75 apiece at 11:30 am on Friday.
According to a CNBC-TV18 report, approximately 2.7 crore shares of FSN E-commerce, equivalent to a 0.9% ownership stake in the company, were traded in a block deal on Friday. The total value of the transaction amounted to INR 516 crore.
Nevertheless, the report was unable to determine the identities of the buyers and sellers participating in the transaction.
On Thursday, reports indicated that Lexdale International was seeking to sell 2.62 crore shares of Nykaa through open market transactions.
Earlier this week, Nykaa, in its quarterly performance update, reported sustained growth across its three business verticals during the third quarter (Q3) of FY24.
During the quarter, the company recognized short-term challenges impacting discretionary consumption. Nevertheless, it foresees the beauty and personal care segment to attain mid-twenties gross merchandise value (GMV) growth in Q3 FY24, while the Fashion vertical is expected to undergo around 40% GMV growth.
Throughout 2023, the beauty and personal care giant encountered challenges arising from increased competition, elevated inflation, and escalating customer acquisition costs. Despite these obstacles, the stock witnessed a partial recovery by the end of the year and has been steadily increasing ever since.
Over the last one year, the company has seen its shares surge by more than 24%, with an additional 11% gain in the first part of 2024.
In the September quarter (Q2) of FY24, Nykaa witnessed a 50% increase in its consolidated net profit, reaching INR 7.8 Cr compared to INR 5.2 Cr in the corresponding quarter of the previous year. This growth can be attributed to advancements across business verticals and effective cost control measures.
France-based butter supplier Loyez Woessen aims to enhance its international presence following the acquisition of new investments.
The company is also expanding into cheese and has revealed a new corporate name – Abondia.
Less than 5% of Abondia’s sales originate from outside of France, where it packages butter for the country’s grocery stores. In 2023, the company achieved sales of €210 million ($230.2 million) but refrained from disclosing its profit details.
Having secured an undisclosed investment from BNP Paribas Développement, the group is now poised to extend its presence in the United States and establish footholds in the Middle East and Asia.
BNP Paribas Développement joins a group of investors that includes majority shareholder Sénevé Capital, agri-food fund Unigrains, and members of the butter maker’s management.
The details of BNP Paribas Développement’s investment remain confidential, including the identity of existing shareholders from whom the bank acquired its stake.
Pascal Jallet, appointed as Abondia’s CEO, has become an investor through the course of the transaction.
“International expansion is a greenfield development project, starting from scratch,” a Unigrains spokesperson said, pointing to overseas accounting for “less than 5%” of the business.
“As a first step, a commercial office has recently been opened in the United States. The focus in this first phase will be on butter, the group’s historic segment.”
Loyez Woessen’s Operational Focus:
Abondia has two butter production sites in France, located in Hauts de France and Loire Atlantique. The company employs 120 staff.
The company’s plans for cheese include production in France, with an eye on supplying the country’s major retailers.
In 2017, Xavier Burette, the president of Abondia, invested in Loyez Woessen alongside Sénevé Capital. Unigrains joined as an investor four years later.
Burette said, “The reorganization of our capital will bring added value to our growth projects. We are delighted to continue this adventure with Sénevé Capital and Unigrains and to welcome BNP Paribas Développement as a shareholder. This operation reflects our ambition for the development of our company in the coming years.”
Hindustan Unilever, the largest consumer goods company in the country, stated that its distributors now have the opportunity to earn an additional 70 basis points in margins, providing significantly increased returns on investments under its new margin structure, downplaying the friction between the company and dealers.
“They can potentially make 70 bps more with healthier RoI than what they were making in the erstwhile model that we had. It is the right thing to do to future-fit and protect the businesses in our small stores and distribution,” said Kedar Lele, executive director, customer development for HUL.
He said that in the past year, the company had met with all its distributors at least three times before introducing the new model three months ago, emphasizing the absence of any friction between them.
“We tested and learned after they participated and gave us feedback and over a period of time, we created a framework, which we have rolled out after seeing the success of it.”
‘Pay for Performance’ Principle by Hindustan Unilever
Under the ‘pay for performance’ principle, the criteria for additional variable incentive prioritize the quality of service to the stores. This encompasses servicing larger networks of stores, ensuring the availability of various new category packs, and providing next-day delivery.
The company has announced a reduction of up to 60 basis points in the fixed margin to promote fair competition between distributors specializing in wholesale and those choosing the higher-cost retail service with a broader range of availability. To offset this decrease in the fixed margin, the variable margin has been raised by up to 130 basis points.
In October, HUL rolled out the structure in 110 major cities, encompassing almost 400 distributors.
As a result, the All India Consumer Products Distributors Federation (AICPDF) raised concerns, stating that it will advocate for the restoration of margins and even issued a warning about a potential boycott of their products. In response, HUL emphasized that their terms of trade with distributors are bilateral, and they will address concerns when approached.
“Our relationship with our distributors is one on one and I shall not discuss the policies of this relationship with anyone else but themselves. We are not asking people to sell more. We are asking people to service better. We do joint business plans and it is going absolutely as planned and as predicted,” said Lele, adding that their distributor attrition rate is in mid-single digits, nearly half compared to the industry average.
Tata Consumer Products Ltd (TCPL) is set to announce two major transactions – the acquisitions of Capital Foods Pvt Ltd, renowned for its production of condiments, food products, and ingredients under the Ching’s Secret and Smith & Jones brands, as well as Organic India, a Fabindia-backed manufacturer of organic teas and health products. This marks the ending of months of negotiations, according to sources familiar with the matter.
The acquisitions will enable the company to access products with a broader taste profile, penetrate new markets, and diversify its portfolio with organic items catering to consumers seeking healthier alternatives.
The official announcement is anticipated early next week.
TCPL is set to acquire 75% of Capital Foods from current investors, including Invus Group, a European family office and investment arm, holding a 40% stake, and the US private equity group General Atlantic, which owns 35%, valuing the company at INR 5100 crore. This places the stake value at INR 3,825 crore. While Ajay Gupta, the founder chairman of Capital Foods and a former advertising executive turned food entrepreneur, will retain his 25% stake for the time being, the Tatas plan to buy him out in the future, enabling him to unlock additional value.
TCPL will acquire a controlling stake in Organic India at a valuation of INR 1800 crore from Fab India. Fabindia, supported by Premji Invest and Lighthouse Capital, currently holds over 40% ownership in Organic India, based in Lucknow.
On September 21, reports indicated that TCPL was leading the race to acquire Capital Foods, a company that has carved out a distinctive niche since 1995 by introducing a range of products with authentic ‘desi’ flavors. These offerings encompass Ching’s Secret instant noodles, soups, condiments, curry pastes, and frozen entrees, as well as the Smith & Jones line featuring ginger-garlic paste, specialized sauces, and baked beans. Goldman Sachs initiated a formal sale process in late 2022, attracting interest from major players such as Nestle, the world’s largest food company, The Kraft Heinz Co, Norwegian food giant Orkla, and the owners of MTR Foods, among others. Kotak Mahindra has been providing advisory services to the Tatas.
On August 4, there were reports indicating that both Tatas and ITC were considering the acquisition of a substantial stake in Organic India, a producer known for its diverse range of premium organic teas and food supplements.
Tata Consumer Products to Compete in the Branded Instant Noodles Market:
With the Tatas’ acquisition, TCPL will now directly compete with Nestle’s Maggi, the leader in the INR 5,000 crore branded instant noodles market, commanding a 60% share. The Maggi franchise falls under Nestle’s prepared dishes and cooking aids business. Competitors in this category include Top Ramen, Wai Wai, and Patanjali.
Organic and wellness products have experienced robust double-digit growth, particularly in the post-Covid-19 period, and are projected to achieve a valuation of INR 75,000 crore by 2025, as outlined in the ‘Indian Organic Sector Vision 2025’ report by the commerce ministry.
The market is anticipated to witness annual growth of 16-18% until 2026-27. Tatas, known for their acquisitive approach, acquired Soulfull in 2021, a company specializing in breakfast cereals and millet-based snacks. Demonstrating impressive financial performance, the company achieved a 50% increase in revenue through brand extensions and the introduction of new products at minimal additional costs.
However, Capital Foods and Organic India will mark the first substantial acquisitions in several years for Tata Consumer, which has been dedicated to refining and expanding its in-house portfolio of brands. According to well-placed officials familiar with the matter, the Capital Foods portfolio will particularly benefit from Tata Consumer’s extensive distribution network and robust marketing capabilities. This strategic move will provide Tata Consumer access to an enlarged global Indian diaspora through brands that encompass a pan-Indian cuisine, distinguishing them from other more regionally focused brands. Additionally, officials noted that these acquisitions will bring brands offering improved business margins in the food sector for the Tata company.
Tatas refrained from providing a comment. GA and Invus were unavailable for comment. Emails sent to Ajay Gupta and the FabIndia spokesperson yielded no response as of press time.
As per analysts closely monitoring TCPL, the company has embarked on a multi-year transformation, evolving from a tea-and-salt-focused entity into a more extensive food and beverage franchise. This transformation occurred following the Tata Group’s rationalization and consolidation of its portfolio, including an anticipated merger with Tata Coffee by the end of FY24. In May 2020, TCPL acquired PepsiCo’s 50% stake in NourishCo Beverages Ltd, a joint venture featuring brands like Himalaya packaged water and GlucoPlus. However, its highly publicized INR 7000 crore takeover attempt of Bisleri, India’s largest bottled water brand, did not materialize after nearly two years of negotiations.
Diversification Opportunity: Tata Consumer Products and Organic India
The acquisition of Organic India provides Tata Consumer with an opportunity to diversify into additional product categories.
“This will be high margin infusions with supplements , organic foods and is probably the only “ real & kosher “ organic products in india. The brand in turn gets huge distribution opportunitie both within India & globally,” said an official in the know.
On December 29th, Tata Consumer Products became the sixth Tata Group company to achieve a market capitalization surpassing INR 1 lakh crore, joining the ranks of listed firms with this milestone. As of Thursday, it concluded with a market value of INR 1.04 lakh crore. The stock has witnessed a 26.52% appreciation in the last three months.
“Tata Consumer offers a long growth runway as it transforms into a larger consumer packaged goods (CPG) company with aspirations beyond F&B. Significant scope for market share gains in the core tea and salt segments, besides scale-up of the India growth businesses, would support the growth trajectory. Strong FCF, improving return ratios, attractive long-term potential for Starbucks and the opportunity to leverage Tata Group assets (e.g., BigBasket) are other potential positive drivers,” said Latika Chopra of JP Morgan.
Lexdale International is reportedly seeking to divest 2.62 crore shares of the beauty e-commerce giant Nykaa through open market transactions.
Sources informed CNBC-Awaaz that the transaction is expected to be valued at a total of INR 490 crore. Brokerage firms Morgan Stanley and JP Morgan are set to oversee the deal.
Earlier this week, Nykaa, in its quarterly performance update, stated that it experienced steady growth across its three business verticals during the third quarter (Q3) of the financial year 2023-24 (FY24).
The Falguni Nayar-led company reported that although discretionary consumption encountered short-term pressures in the quarter, it projected the beauty and personal care (BPC) arm’s gross merchandise value (GMV) growth in Q3 FY24 to be in the mid-twenties. Additionally, the fashion vertical’s GMV was anticipated to grow by around 40%.
Nykaa’s Potential Inclusion in MSCI Smallcap Index:
Nuvama Alternative & Quantitative Research suggests that Nykaa might join the MSCI Smallcap index if the stock experiences a surge ranging from 8-20%.
Amidst escalating competition, elevated inflation, and a growing customer acquisition cost, the beauty and personal care (BPC) giant faced challenges throughout 2023. However, by the year’s end, the stock showed signs of recovery and has maintained an upward trajectory since then. Over the past 12 months, the company’s shares have surged by over 24%, with an additional 11% gain in the first part of 2024.
It should be emphasized that the company did not observe any significant block deals in the year 2023.
The increase in stock price follows a year marked by high-level departures, market fluctuations, and intensified competition from both established players and newcomers like Reliance-backed Tira, Tata CLIQ, and others.
Shares of Nykaa closed at INR 193.70 on the BSE, registering a 1.73% increase on Thursday (December 11).
FMCG distributors demanding restoration of old margin structures from the leading maker HUL on Thursday said they would boycott its products in Maharashtra, starting with Taj Mahal Tea.
The distributors further said that if the company does not pay attention to their demand, then they will boycott the Kissan brand and leading detergent brand Rin along with Taj Mahal tea brand going ahead.
HUL’s Margin Adjustment
HUL, the owner of brands like Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, has decreased the fixed margin by 60 basis points while raising the variable margins for its distributors by 100 to 130 basis points.
The distributors are demanding a minimum basic margin of 5 percent. They endorse incentive parameters but insist that these should not encroach upon the distributor’s margin.
The All India Consumer Products Distributors Federation (AICPDF), a collective body representing distributors, has raised concerns about the updated margin structure.
AICPDF on Thursday shared a statement from the Maharashtra Consumer Products Distributors Federation (MSCPDF), in which they have started non-cooperation against HUL from January 11, by boycotting its products starting with Taj Mahal Tea.
MSCPDF plans to keep the Taj Mahal Tea brand as “Inactive” till January 25, which “should be kept in Frozen so that it does not get booked and billed.” However, if “the company does not pay attention to our legitimate demand, then Kissan brand along with Taj Mahal tea will be Inactive / Frozen from January 25 to February 10,” MSCPDF said.
MSCPDF further said if no solution is found even after this, then products under HUL’s leading detergent brand “Rin along with Taj Mahal and Kissan brands will be Inactive from February 10 to February 25.” An E-mail sent to HUL remained unanswered by the time of filing of the story.
The federation further said from March 1, a nationwide movement will be organized in all the states along with a dharna with 1,000 distributors in front of HUL’s Mumbai-based head office.
“This movement will start from Maharashtra and spread to different parts of the country week after week,” AICPDF statement said, adding by February, more than 1,500 to 2,000 distributors from other parts of India are expected to participate.
Typically, FMCG companies offer two types of incentives: fixed margins and variable margins. The majority of these companies provide fixed margins ranging from 450 to 600 basis points, in addition to variable margins determined by factors like performance.
AICPDF claims to represent over 4 lakh distributors and the stockist pan India.
Two years before also AICPDF was in loggerheads with HUL over margin parity between business-to-business platforms and cash-and-carry players. It had called for a boycott of HUL products, which was later called off on January 4, 2022.
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