Haldiram Snacks Food is in significant demand! PepsiCo has recently joined the race to acquire a stake in Haldiram Snacks Food, following Temasek and Alpha Wave Global, which submitted formal proposals last month. These bidders are engaged in detailed discussions with the Aggarwal family, seeking to purchase a 10-15% stake in India’s premier ethnic snacks and convenience foods manufacturer.
Senior executives from PepsiCo’s New York headquarters have recently initiated preliminary discussions with the Aggarwal family members regarding a potential minority stake acquisition.
According to an ET report, these discussions remain in the early stages and may not necessarily result in a deal. The US parent company will spearhead any potential investment, with the Indian division playing a relatively minor role.
The Aggarwal family is seeking its first external investor. They expect the company to be valued between Rs 85,000 and 90,000 crore.
PepsiCo, which produces Lay’s chips, Kurkure salty snacks, and Doritos nacho chips, faces intense competition in India’s snack sector.
The market has witnessed significant growth in regional and direct-to-consumer snack manufacturers. While the ethnic snacks segment is dominated by major players like Haldiram, Bikanerwala, and Balaji and listed entities such as Bikaji Foods, Gopal Snacks, and Prataap Snacks, it remains highly fragmented with numerous regional competitors. These local manufacturers typically offer products at lower prices, maintain direct distribution networks, and provide higher profit margins to retailers.
RJ Corp-owned Varun Beverages Ltd. (VBL) manages most of PepsiCo’s beverage operations, including Pepsi, Mountain Dew, 7Up, Slice, and Tropicana. “With beverage bottling outsourced to VBL, PepsiCo India’s core focus is snacks, a market where it is no longer as dominant as it used to be,” said an executive.
PepsiCo maintains a 24% market share leadership in Western snacks like chips and nachos. However, it is limited in traditional Indian snacks such as nankeen, bhujiya, and chana chur. The organisation sees potential growth through collaboration with Haldiram, and its snacks and beverage divisions are comparable in size.
Jagrut Kotecha, the company’s current India leader, was selected specifically for his extensive experience in PepsiCo’s snacks division. He aims to strengthen the snacks business nationally.
According to Registrar of Companies (RoC) data accessed via Tofler, PepsiCo India Holdings recorded consolidated revenue of Rs 5,954.16 crore from April to December 2023. During this period, its snacks division, comprising Kurkure, Lays, Doritos and Quaker, generated Rs 4,763.29 crore.
Haldiram Snack Foods’ revenue was Rs 12,800 crore in FY24, substantially exceeding PepsiCo’s figures. The company produces and sells 500 varieties of snacks, namkeen, sweets, ready-to-eat foods, and pre-mixed foods.
PepsiCo’s acquisition history includes Uncle Chipps from Amrit Agro Ltd in 2000, when its snacks division operated as Frito Lay. Uncle Chipps now serves primarily tier 2 and 3 markets as a value brand. The company launched Doritos nachos, its multi-billion brand, in 2016-17 within the western snacks category.
Industry analysts suggest Haldiram would likely prefer to sell ultimately rather than accept a minority investment from PepsiCo. Previous discussions with Mondelez, Kellogg’s, and Tata Consumer ended without agreement. Earlier negotiations with former PepsiCo CEO Indra Nooyi also proved unsuccessful.
