Adani Wilmar open to inorganic growth opportunities, to ramp up rural distribution
Packaged food major Adani Wilmar is exploring inorganic growth opportunities in categories that are synergistic to its portfolio. The company, known for brands such as Fortune and Kohinoor, is betting big on the consumer shift towards branded segment to grow its food and FMCG business. It also aims to ramp up direct distribution to 50,000 small towns by the end of this fiscal.
Responding to a query on mergers and acquisitions, Angshu Mallick, Managing Director and Chief Executive Officer, Adani Wilmar, told businessline, “As a company, we are on the lookout for inorganic growth opportunities in categories which complement our food basket. There are some brands, largely regional in nature, whichwant to exit and offer a good proposition. We will need to see if such an opportunity adds value in terms of brand proposition, distribution and supply chain. Nothing is on the table right now, but we are evaluating the market. We have some funds reserved (raised as part of the IPO proceeds) for acquisitions and we will use that if we get a good opportunity.”
The company had acquired basmati rice brand Kohinoor in 2022 as part of its strategy to strengthen presence in branded staples. Mallick said that the company is open to inorganic growth opportunities that will expand the company’s play in adjacent categories, kitchen essentials or exports.
FMCG business
The company said it recorded 12 per cent volume growth in the edible oils business Q1 FY25 year on year. Mallick said the company’s strong performance in the edible oil business was aided by factors such as stability in prices, double-digit growth in mustard oil and sunflower oil segments among others. On outlook for the food and FMCG business, he said, “The consumer shift to branded staples is benefiting us significantly. In FY24, revenues of food and FMCG business stood at ₹5,000 crore and this fiscal we expect it to cross ₹6,500 crore.”
The FMCG industry is betting big on improvement in rural consumption during this fiscal. “In the past few quarters, the rural demand was sluggish. Staples did not get impacted but growth in rural markets had slowed down. With a good monsoon, Budget’s push on rural schemes and expectations of a good harvest, we are positive that post September, the industry will see better rural demand trends,” Mallick said.
Meanwhile, the company is also ramping up its direct distribution in smaller towns and rural regions. “Our rural town coverage stood at over 30,000 smaller towns as of March 2024. Our ambition is to reach 50,000 smaller towns (rural towns) by FY25-end, which will be directly serviced by our distributors,” Mallick added.