CHENNAI: The latest in the string of acquisitions by Reliance Consumer Products is Tamil Nadu’s well-known Udhaiyam brand, in which the FMCG arm of Reliance Industries has picked up a majority stake.
In a statement on Thursday, Reliance Consumer Products Limited (RCPL) said it has acquired a majority stake in Udhaiyams Agro Foods Private Limited. Under the joint venture agreement, RCPL holds a majority stake, while Udhaiyams’ erstwhile owners, S Sudhakar and S Dinakar, hold a minority stake in the company.
Udhaiyam’, has a legacy of more than three decades and a strong market presence in Tamil Nadu. It has established itself in key staple and food product categories, including rice, spices, snacks and idli batter, among others, supported by a wide distribution network. The promoter duo will continue with the company and support the next phase of growth.
Commenting on the deal with Udhaiyam, T Krishnakumar, director, RCPL, said, “Udhaiyam is a brand that needs no introduction.
It has been serving healthy food choices to consumers for decades and is a true reflection of Tamil Nadu’s rich heritage enriched with its scientific temper and superior quality.”
Since September 2021, when RCPL’s earlier avatar Reliance Retail hired former Coke India boss Krishnakumar, the focus has been on strengthening the food and beverage segment. The company has been gobbling up well-established regional brands across diverse segments, ranging from colas and noodles to health-focused brands.
Management consultant Sridhar Narayanan, founder, GAME, opined that these were part of Reliance’s efforts to forge ahead with its backward integration plans inorganically. “The Udhaiyam brand move is part of their consolidation efforts reflecting the seriousness of their business,” he said, adding the supply chain advantage gives Reliance the ability to optimise price for the consumer, while the acquisition strategy of regional brands ensures that there is no need to reinvent.
However, anticipating a lot of action in the regional brands space, a commodity trader believes such deals will only “monopolise” the purchases. Players like Reliance, with focus on profit margins, would end up jacking up the prices for the end consumer, the trader said.
RCPL’s acquisitions include several consumer brands such as Tagz Foods and house brands ranging from soap to cola staples, dishwashing liquid, detergent and floor cleaner, under names like Sil, Lotus Chocolates, Toffeeman, Ravalgaon, Alan’s Bugles, Enzo, and Independence.
Down south, especially Tamil Nadu, it has struck deals involving legacy brands like Velvette (shampoo) while still trying to pocket Kalimark’s Bovonto. It may be worth noting that in September this year, RCPL signed a memorandum of understanding for Rs 40,000 crore with the Centre for setting up integrated food manufacturing facilities across the country.