Ratan Tata’s Tata Consumer Products Ltd (TCPL), the maker of Tata Tea and Tata Salt, is set to acquire Capital Foods Pvt Ltd, the owner of Ching’s Secret and Smith & Jones brands, for Rs 5,500 crore. The deal, which is expected to be announced soon, will mark TCPL’s entry into the fast-growing instant noodles and sauces segments, and intensify its competition with Nestle and Kraft Heinz.
Capital Foods is one of the leading players in the packaged foods industry, with a presence in categories such as instant noodles, soups, sauces, masalas, and snacks. The company has a strong distribution network across India, and exports its products to over 40 countries. The company’s annual revenue is estimated to be around Rs 1,000 crore, and its operating profit margin is around 20%.
TCPL is one of the largest consumer products companies in India, with a portfolio of brands such as Tata Tea, Tata Coffee, Tata Salt, Tata Sampann, Tetley, Eight O’Clock, and Himalayan. The company has a presence in over 40 countries, and has a revenue of Rs 11,600 crore in the financial year 2020-21. The company has been on an acquisition spree in the recent years, buying brands such as Soulfull, Kottaram Agro Foods, and NourishCo.
The acquisition of Capital Foods will help TCPL to expand its product portfolio, increase its market share, and strengthen its position in the packaged foods industry. The deal will also enable TCPL to leverage Capital Foods’ expertise in the Chinese and Indian cuisines, and cater to the changing consumer preferences and tastes. The deal will also create synergies and cost savings for both the companies, and enhance their growth prospects.
The deal will also intensify the competition in the packaged foods industry, which is dominated by players such as Nestle and Kraft Heinz. Nestle’s Maggi is the market leader in the instant noodles segment, with a 60% market share, followed by ITC’s Yippee, with a 22% share. Capital Foods’ Ching’s Secret is the third-largest player, with a 12% share. Kraft Heinz’s Complan is the second-largest player in the health drinks segment, after GSK’s Horlicks, which was acquired by Unilever in 2018.
The deal will also reflect Ratan Tata’s vision and strategy for TCPL, which he has been overseeing as the chairman emeritus of Tata Sons, the holding company of the Tata Group. Ratan Tata has been instrumental in shaping TCPL’s growth and transformation, and has been involved in the key decisions and acquisitions of the company. Ratan Tata is also known for his personal investments in several startups and ventures, such as Ola, Snapdeal, Paytm, Zomato, and Urban Ladder.
