Kellogg's Goes Beyond Breakfast, Seeks A Significant Stake In Snacks Maker Haldiram’s
Published Date | 2019 February 15
Kellogg's is eyeing a 51% stake in the Delhi and Nagpur arms of Haldiram's, valuing around USD 3 billion, which will fuel the bakery marketIndia: World’s second-largest snack foods company, Kellogg's seeks a big bite of India’s leading snack maker Haldiram’s. The deal may see the New York Stock Exchange-listed Kellogg’s pick up a significant stake in the company, valuing Haldiram’s at around $3 billion (Rs 20,000 crores). Haldiram’s operates out of three hubs of Delhi, Nagpur, and Kolkata after the Agarwal family split the business geographically among themselves in the 1990s. The ongoing talks involve two of the three branches of the company — Delhi-based Haldiram Ethnic Foods and its affiliates, and Nagpur based Haldiram’s Food International and affiliates that cater to the western and southern markets. Deutsche Bank is advising Haldiram's on this proposed transaction, American breakfast cereal giant Kellogg is believed to be pressing for a 51% stake in the two divisions while the Agarwal family is not keen to cede control and prefers a 25% dilution. The eastern faction of the family that manages Haldiram Bhujiawala from Kolkata is not part of the transaction. It is also the smallest of the three. The Delhi and Nagpur divisions, together, are expected to end FY19 with sales of Rs 4,500-5,000 crore and profit of Rs 450-550 crore. According to BlueWeave Consulting, Bakery Industry is one of the largest segment of the food processing industry. The availability of innovative bakery products containing multi-grains and whole wheat with low trans-fat and calorie content has further facilitated their consumption. India is the second largest producer of cookies in the world after the USA. Additionally, despite tepid demand growth, India disposable income levels have raised, and consumers have increasingly turned to high-priced, premium baked goods, including organic and gluten-free options. Increasing obesity rates and the aging population have put the usage of healthy ingredients in India on a national front. Moreover, the consumers are more conscious than ever before and the movement toward healthy eating habits is one of the greatest influencers of the Bakery Products industry. According to recent published report by BlueWeave Consulting on “India Bakery Products Market, By Product Type (Biscuits, Cakes & Pastries, Bread & Rolls, Rusks and others), By Biscuits Type (Cookies, Cream Biscuits, Milk Biscuits, Glucose Biscuits, Marie biscuits, Salt Crackers Biscuits, Non-Salt Crackers Biscuits and others), By Distribution Channel(Retail Stores, Specialty Retailers and Online Distributors), By Region(North, South, East and West), Size and Forecast, 2014-2025,” India Bakery Products market is expected to grow with a significant growth rate during the forecast period 2018-2025 owing to their pleasant taste and health-benefits as they are made from a variety of grains like maize, wheat, and oats. India is the second largest producer of biscuits (cookies) in the world after the USA. Bakery industry is one of the oldest businesses in India, which is modernizing and is constantly changing in terms of product range and services due to the high nutrient value and affordability bakery products will drive the bakery market over the forecasted period. According to the upcoming report by BlueWeave Consulting on “Global Biscuits Market By Product Type (Sweet Biscuits, Savory, Crackers, Filled/Coated, and Wafers), By Ingredients (Wheat, Oats, and Millets), By Flavor Type (Plain, Chocolate, Sour Cream, Cheese, and Spiced, and Fruits and Nuts),By Sales Channel (Supermarket/Hypermarket, Convenience Store & Others), by Region ((North America, Europe, Asia Pacific, Middle East & Africa and Latin America)), Size and Forecast, 2014-2025,” Global Biscuits Product market is projected to grow with a significant growth rate during the forecast period 2018-2025 due to the innovative packaging, new flavors, shapes, technological advancement. Biscuits are one of the most important snacks used in an average household. The major factors driving the growth of the biscuits market are the increasing preference for convenience and snacking, rising demand for healthy snacks and the augment in the per capita food consumption in emerging countries.