Kidbea explores acquisition of renowned cloth diaper brand to expand sustainability portfolio

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September 12, 2023

Kidbea, a prominent brand in sustainable bamboo-based children’s clothing, is advancing significantly toward a more environmentally friendly future. The company has recently revealed its intention to acquire a well-known cloth diaper brand, marking a strategic move that reaffirms Kidbea’s strong dedication to eco-conscious childcare solutions. This acquisition also represents a remarkable expansion of Kidbea’s current range of cloth diaper products.

Kidbea has gained acclaim for its high-quality bamboo-based children’s clothing, known for its exceptional combination of comfort and environmental conscientiousness. As Kidbea prepares to acquire this cloth diaper brand, it is steadfastly working to reinforce its commitment to furnishing parents with a comprehensive array of sustainable parenting options, which now include cloth diapers.

“At Kidbea, our mission has always transcended clothing; it’s about shaping a future where children thrive while we champion the planet,” emphasized Mohammad Hussain, CEO, and Co-Founder Kidbea “This move reaffirms our commitment to offering parents diverse and sustainable choices.”

“Our mission transcends threads and textiles; it’s about threading together a brighter, greener future for every child,” added Aman Kumar Mahto, CPO and Co-Founder kidbea.

The cloth diaper brand slated for acquisition is renowned for its pioneering advancements in cloth diaper technology, providing outstanding absorbency, comfort, and sustainability, making it a trusted choice for environmentally conscious parents. Kidbea’s acquisition will not only broaden the choices accessible to parents but also enable seamless integration with its existing line of bamboo-based products, thereby elevating the overall sustainability and comfort of its product offerings.

Kidbea’s unwavering commitment to leading the way in sustainable parenting options is clearly demonstrated through this acquisition. It signifies a profound dedication to nurturing a healthier, environmentally conscious future for children. As Kidbea embraces the addition of the new cloth diaper brand to its family, it takes an exceptional stride towards establishing a more environmentally friendly and eco-conscious landscape for parenting.

Marico’s COO Sanjay Mishra resigns, leadership changes announced

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September 12, 2023

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On Monday, Marico, a leading player in the FMCG (Fast-Moving Consumer Goods) industry, announced that Sanjay Mishra, currently serving as the Chief Operating Officer for the India business and CEO of the new business division, will be resigning from his role. Mishra’s final day of work with the company will be December 15th.

Vaibhav Bhanchawat, currently serving as the COO for South East Asia and South Africa, is set to assume the role of COO for the India business starting from October 1. In his new capacity, Bhanchawat will oversee the India business’s sales, manufacturing, supply chain, and food division.

In 2020, he assumed the role of Executive Vice President and Business Head for South-East Asia. During his tenure, he played a pivotal role in revitalizing Marico’s South East Asia (SEA) operations through a highly effective Go-To-Market Model. The company, as reported in a stock exchange filing, credited him with spearheading essential transformation initiatives and expanding the product range in the region.

Additionally, Ashish Goupal, currently serving as the COO for Marico Bangladesh, MENA (Middle East and North Africa), and New Country Development, will be appointed as the CEO of the international business division. In this new role, he will be responsible for overseeing all international markets within the company, which encompasses South East Asia and South Africa, among others.

Nykaa anticipates stronger Q2 Performance with fashion sector on the rise

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September 12, 2023

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Nykaa, the beauty and fashion retailer, anticipates a stronger performance in the current quarter compared to the first quarter. This optimism is driven by an improved consumer outlook, particularly in the fashion sector, which exhibited signs of recovery in July, primarily due to robust end-of-season sales.

During a recent discussion at the Jefferies Asia Forum, the leadership team of FSN E-Commerce, the company behind Nykaa, approached the subject of growth stabilization in the September quarter with a blend of caution and optimism. In a report, Jefferies remarked that the management, including Anchit Nayar, the head of beauty and personal care, P Ganesh, the chief financial officer, and Namrata Penta from the mergers and acquisitions team, conveyed an upbeat perspective.

Jefferies expressed the view that an increased proportion of in-house brands and a focus on premiumization would contribute to enhancing the retailer’s gross margin. Furthermore, the losses incurred from the fashion and B2B segments are expected to decrease and transition into profitability within a span of 3-4 years.

During the June quarter, the retailer delivered a lackluster performance, largely attributed to sluggish sales within the fashion segment. Jefferies also noted that in the initial quarter, the fashion industry as a whole experienced feeble growth, partly influenced by cautious consumer sentiments and a preference for offline shopping over online channels.

In the first quarter of FY24, the company’s net profit declined by 27.4 percent to INR 3.3 crore, while its revenue, although 24 percent higher at INR 1422 crore, fell short of analyst projections.

Nonetheless, the beauty and personal care (BPC) segment displayed notable strength, as the company emphasized offline sales channels, recognizing the significance of physical presence and experiential factors in this sector. During the June quarter, the company’s BPC segment witnessed a 24 percent increase in gross merchandise value, surpassing industry growth rates. In contrast to the country’s per capita spending on BPC products, which stands at $15, Nykaa’s customers, on average, allocate $80. The company attributes this higher spending to income levels, as there is a direct correlation between income and expenditure on BPC items. With the potential for income levels to rise, this segment holds promising opportunities for future growth.

In the fashion segment as well, Nykaa’s customers have a per capita spending rate of $130, which significantly surpasses the industry average of $54.

While e-commerce penetration in India stands at 19 percent on a broad scale, the share of BPC and fashion within this market is comparatively lower, signifying substantial growth prospects.

Jefferies anticipates that Nykaa will continue to experience hyper-growth in the medium term, driven by an increasing online presence in the beauty and personal care (BPC) and fashion sectors.

As of March 2023, the company boasted 154 stores, a customer base of 2.4 crore, and offered products from more than 6,000 brands.

Popeyes expands its Indian footprint with a new store in TC Palya, Bengaluru

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September 12, 2023

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Popeyes, the American fast-food chain, recently inaugurated its newest establishment in TC Palya, Bengaluru, making it the 12th out of its 19 stores in the city. A company spokesperson made the exciting announcement via social media on Saturday.

“Our 19th Popeyes store opened its doors today at TC Palya, Bangalore!!!” Ivan Brandon Keith D’Souza, Training Head – Popeyes at Jubilant FoodWorks Ltd. wrote on LinkedIn.

The first Popeyes store in the country also made its debut in Bengaluru in January 2022.

In July, Popeyes made its debut in Hyderabad with the opening of a store located at Asian Satyam Mall in Amarpeet.

The CEO, Joshua Kobza, emphasized that India plays a pivotal role in the US-based fried chicken brand’s long-term growth strategy. Under the ownership of Restaurant Brands International Inc, the brand aims to establish 250 Popeyes stores in the country over the next four to five years through its Indian franchise partner, Jubilant FoodWorks Ltd (JFL).

Established by Al Copeland in 1972 in New Orleans, Louisiana, the American fast-food chain Popeyes has expanded its presence worldwide. Currently, there are over 3,700 Popeyes outlets across the globe.

LuLu Group to establish two of India’s largest shopping malls in Ahmedabad and Chennai

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September 12, 2023

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On Monday, Yusuff Ali, the Chairman and Managing Director of LuLu Group International, announced that his company plans to establish two expansive shopping malls in India, specifically in Ahmedabad and Chennai.

Ali said, “We are going to construct one of the largest shopping malls in Ahmedabad and Chennai and we are opening our shopping mall in Hyderabad end of this month. Also we are going to different states for shopping malls and food processing.”

Hyderabad will mark the sixth city, joining the ranks of Kochi, Thiruvananthapuram, Bengaluru, Lucknow, and Coimbatore, where the group has established its shopping mall presence.

Based in Abu Dhabi, UAE, Lulu Group has gained a reputation as an influential pioneer in the retail sector across the Middle East and North Africa region. With a presence spanning more than 250 hypermarkets and supermarkets, the group has earned widespread acclaim among discerning shoppers in the GCC, Egypt, India, Indonesia, and Malaysia.

Speaking on the sidelines of an event where over two dozen Memoranda of Understanding were signed between Indian and Saudi Arabian companies, covering a wide range of sectors including Information Technology, agriculture, pharmaceuticals, petrochemicals, and human resources, among others, he highlighted the deep-rooted historical relationship between India and Saudi Arabia.

“A lot of liberalization happened and ease of doing business happened… A lot of restrictions are removed by the Prime Minister and the government. We are very thankful to him,” Ali said.

The MoUs were signed as part of the State visit by Saudi Arabian Prime Minister and Crown Prince Mohammed bin Salman Al Saud, who arrived in Delhi for a three-day visit on Saturday. His visit to Delhi followed his participation in the G20 Summit, and he extended his stay in India for the subsequent state visit.

“So this historical visit has further strengthened the bilateral commercial and the leadership relation,” the Lulu Group chief said.

On India’s G20 presidency, Ali said, “India is a global leader and we should congratulate our prime minister Narendra Modi ji for his hard work and bringing all the leaders here. And India’s tradition, India’s culture also showed to the great leaders of different countries.”

The Lulu Group boasts a workforce of over 65,000 individuals hailing from 42 different nations and achieves a global annual turnover of USD 8 billion.

FMCG sales hit a slump in August as traders exercise caution in inventory management due to poor rainfall

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September 12, 2023

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In August, India witnessed an 8.4% decline in the value of its fast-moving consumer goods (FMCG) sales compared to the previous month. This drop was attributed to the exceptionally low rainfall, which hindered the emerging revival of rural demand. Consequently, local small retailers became cautious and opted to maintain minimal inventory levels in preparation for the upcoming festive season.

In July, there was a 3.1% month-on-month increase in the sales of a wide range of products, from groceries to personal care items. This growth was supported by the recovering rural demand, which had finally entered positive territory after more than a year of pressure, as indicated by the latest data from the retail analytics platform Bizom. However, in August, consumer goods sales experienced a double setback, declining both month-on-month and by a significant 11.2% compared to the previous year.

With the August rain shortfall being at almost a 100-year low, we see kiranas stocking very carefully,” said Akshay D’souza, chief of growth and insights at Bizom. “As we look ahead, it seems that the impact of rains in September will be critical to the sowing season, and this could impact sentiment and consumption of FMCG products, especially in rural areas.”

In August, India experienced its driest month in over a century, receiving a mere 36% of its typical monthly rainfall. The deficiency in rainfall was attributed to the strengthening of the El Nino phenomenon and unfavorable weather conditions in both the Arabian Sea and the Bay of Bengal. Data from the India Meteorological Department revealed that a significant shortfall in rainfall was observed across most of India, except for northeastern India, the Himalayan states, and certain areas of Tamil Nadu. Regions that particularly suffered from low rainfall included Bihar, eastern Uttar Pradesh, Chhattisgarh, Kerala, Gangetic West Bengal, Jharkhand, parts of Karnataka, and Maharashtra.

Rural sales witnessed a substantial decline of 17.2% in August compared to the previous month. This stark contrast comes after a promising 2.3% growth in rural sales during the preceding month. Conversely, urban demand showed a more modest uptick of 1.9% in August, in sharp contrast to the 7% decline experienced in July. The notable drop in edible oil prices significantly influenced urban sales last month, as highlighted by Bizom.

“Even as we expect edible oil prices to hold up during the festival season, the prices are currently down by over a third year-on-year, leading to a drop in sales value. And, as a result, commodity product sales are also down by almost a fourth compared to the previous year,” said D’souza.

The sole exceptions to this pattern are confectionery and packaged foods, with their growth primarily attributed to the popularity of gift packs.

Mondelez India Foods Ltd., the producer of Cadbury, stated that demand is appearing optimistic due to increased consumption during the Raksha Bandhan festival in August.

Parle Products Pvt. also experienced an upturn in sales of impulse categories. Nevertheless, the packaged goods manufacturer has expressed a note of caution regarding the current inflationary trend and the unpredictable nature of the monsoon, both of which will play a significant role in determining the extent of future demand growth.

“The next 15-20 days are crucial, and if we don’t see the monsoon reviving, then it may have a bearing on the feeble rural demand recovery,” said Mayank Shah, senior category head at Parle Products.

Nonetheless, the Indian Meteorological Department (IMD) anticipates a revival of the southwest monsoon in September, marking the final of the four monsoon months.

Tata Consumer Products sets course for growth with five key product categories in focus

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September 12, 2023

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Tata Consumer Products (TCPL), a packaged goods company, has refined its focus by identifying five key categories for its forthcoming product releases. These categories encompass its existing core offerings, such as tea, coffee, and salt.

Within the pantry segment, the company will explore opportunities in pulses, spices, staples, dry fruits, and ready-to-cook products.

In the liquids segment, the company intends to launch fresh products within the water and ready-to-drink sectors.

The mini-meals category will witness TCPL’s expansion of its product range into the breakfast cereal, ready-to-eat, and snack markets, in addition to its protein platform encompassing plant-based meat and plant protein powders.

Ajit Krishnakumar, chief operating officer, TCPL, explained the rationale behind this strategic approach. He said, “This framework enables us to develop a targeted understanding of our consumers, enhance our internal capabilities, innovate within established parameters, expand our total addressable market, and tap into new consumption occasions.”

He further added, “We have taken a strategic approach to identifying key platforms we want to play in. After evaluating several factors, including market opportunity, category growth, profitability, our capabilities, including distribution and research and development, and our overall competitive edge, we’ve narrowed the universe down to five key platforms.”

Currently, TCPL garners 5 percent of its sales from innovation, and Krishnakumar stated that the company reached this goal ahead of schedule thanks to its proactive approach in product launches.

When contemplating acquisitions, the company takes a distinct viewpoint that encompasses financial feasibility. Additionally, the company evaluates whether the acquisition can synergize with its current operations and if it can derive value by incorporating it into its distribution network. Moreover, the company assesses if the acquisition aligns with its production and delivery systems.

Krishnakumar said that the primary focus for acquisitions will be the Indian market, explaining, “Our primary interest is India because we get the maximum value given our established brands, strength, reputation, and distribution, among other strengths.”

He also recognized the importance of the international market within the company’s overall portfolio but stressed that its growth rate would not match that of the Indian market.

Last week, Tata Group’s consumer division garnered attention for indicating its interest in acquiring a controlling stake in Haldiram’s Snacks, a prominent participant in the ethnic packaged foods sector. Nonetheless, in a stock exchange disclosure, the company clarified that it is presently not in active acquisition negotiations and further stated that it consistently assesses diverse strategic avenues for growth and expansion.

Bain Capital chose not to provide a comment, while Haldiram’s denied any intention of putting the company up for sale.

Last year, Tata Consumer Products was engaged in discussions to acquire a majority stake in Bisleri, a prominent player in the packaged drinking water industry. Nevertheless, the deal ultimately fell through, with sources pointing to high valuations as a contributing factor.

Grocery delivery service Instacart aims to secure $616M in public offering

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September 12, 2023

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Instacart, the grocery delivery service, aims to secure up to $616 million in funding through its initial public offering, as revealed in a regulatory filing on Monday. This funding will be raised in collaboration with selling stockholders.

The San Francisco-headquartered firm, along with its selling shareholders, is making available 22 million shares at a price range of $26 to $28 each.

Just as SoftBank’s chip designer Arm and marketing automation company Klaviyo plan to go public, Instacart is anticipated to join the wave of prominent entities listing their shares in September, gauging investor interest in fresh offerings.

The initial public offering (IPO) market has experienced a significant lull over the past couple of years, primarily due to factors such as Russia’s invasion of Ukraine and the surge in interest rates.

KKR to invest INR 2,069 Crores in Reliance Retail Ventures, valuing company at INR 8.36 Lakh Crores

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September 12, 2023

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On Monday, September 11, Reliance Industries Ltd (RIL) announced that KKR, a global investment major, will be acquiring a 0.25% ownership stake in its subsidiary, Reliance Retail Ventures Ltd (RRVL), focused on retail and digital commerce. This transaction amounts to INR 2,069.5 Crores, and it values the retail giant at an impressive INR 8.36 Lakh Crores.

RIL has stated that KKR intends to expand its investment in RRVL through an affiliated entity, ultimately raising its overall ownership in the company to 1.42%.

“We highly value our deepening partnership with KKR, and their latest investment in RRVL after their previous investment further reinforces their strong belief in RRVL’s vision and capabilities. We look forward to continued engagement with KKR and to benefit from their global platform, industry knowledge and operational expertise, in our journey towards driving transformation of the Indian retail sector,” RRVL director Isha Ambani said.

With this capital injection, KKR’s cumulative investment in RRVL will reach INR 7,619.5 Crores. Back in 2020, KKR had invested INR 5,550 Crores to secure a 1.17% stake in the company. During that period, RIL’s retail division was appraised at a pre-money equity valuation of INR 4.21 Lakh Crores.

Commenting on the fundraise, KKR co-chief executive officer (CEO) Joe Bae said, “Throughout our investment period in Reliance Retail, we have been impressed by the company’s vision and extensive work to empower retailers across India through digitalization, as well as by its resilience and performance in spite of the pandemic and other disruptions.”

Under its corporate umbrella, RRVL encompasses brands like AJIO, JioMart, Netmeds, Milkbasket, and Trends. Additionally, the company holds a minority interest in the challenged quick commerce startup, Dunzo. RRVL asserts an extensive omnichannel network comprising over 18,500 stores and digital commerce platforms that span various segments.

The capital infusion comes days after Qatar Investment Authority revealed its commitment to invest INR 8,278 Crores in RRVL, setting the pre-money equity value of the company at INR 8.3 Lakh Crores.

This development coincides with RRVL’s ongoing expansion efforts, characterized by new product launches and the inclusion of an increasing number of micro, small, and medium enterprises (MSMEs).

Whether it’s the relaunch of Shein in the Indian market or venturing into the beauty and personal care (BPC) sector with Tira, RRVL has diversified across various segments. In doing so, it has presented a significant challenge to the ecommerce domain, which has typically been dominated by startups.

Just last week, RRVL made headlines by revealing its acquisition of a majority 51% stake in the kids-wear and maternity-wear brand, Ed-a-Mamma, founded by actor Alia Bhatt.

In the first quarter of the fiscal year 2023-24, RRVL recorded a net profit of INR 2,448 Crores and generated INR 62,159 Crores in operating revenue. Notably, digital and new commerce segments contributed 18% of the total revenue for the quarter.

Drought in Europe drives olive oil prices up by 60 percent, Indian consumers feel the impact

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September 12, 2023

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Get ready to exercise caution when using extra virgin olive oil on your salads, pizzas, and pastas, as its cost has skyrocketed from INR 850 to INR 1,100 per liter, and there’s a chance it could reach INR 1,500 soon. Projections indicate that pomace olive oil, presently priced between INR 400 and INR 500, might surge to INR 800 per liter.

Europe has witnessed two back-to-back years of drought, resulting in unprecedented price hikes. Importers have noted that prices have surged across all categories, with increases of at least 50 to 60 percent.

“I spoke to my Italian suppliers recently, and they said that there is unlikely to be any respite till the end of the year,” said an importer.

Indian consumers, who rely on imported oil, are already experiencing the repercussions.

“I have noticed a significant reduction in discounting on olive oil both in supermarkets and online,” said Prerna Bhamra, a resident of Vasant Kunj in Delhi.

India relies heavily on imported olive oil, with the vast majority (at least 90 percent) originating from Spain and Italy, and the nation is confronting numerous challenges as a result.

“Not only have the prices at source doubled over the past year, but the Euro has also appreciated by 12 percent to 13 percent, and we are still paying a 40 percent to 45 percent import duty on this higher price,” said Rahul Upadhyay, president of Indian Olive Association.

In the year 2022, India brought in a total of 13,433 metric tonnes of both extra virgin and pomace olive oil. Due to the substantial increase in domestic prices, the industry association has formally asked the government to lower import duties. MRK Foods, a company engaged in importing and supplying olive oil to more than 600 upscale restaurants and five-star hotels, has observed a rising demand for pomace oil.

“We have reduced imports of extra virgin olive oil by 30 percent and almost doubled imports of pomace,” said Dhiraj Dama, managing director of the company.

While numerous upscale Italian restaurants continue to utilize their existing inventory, smaller eateries have opted for substitute options. Certain customers have already detected alterations in the flavor.

“I have been visiting a small Italian cafe for a long time and I recently noticed a change in taste,” said Kavita Gupta, a resident of Kalyani Nagar in Pune.

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