ITC Limited has announced its intention to acquire the spice-making company Sunrise Foods Pvt. Ltd (SFPL). The move is a significant development that will help the company strengthen its position in India’s rapidly evolving fast-moving consumer goods (FMCG) market.
ITC Limited has finalized a share purchase agreement to acquire a hundred percent of the equity share capital of SFPL, a Kolkata-based company primarily engaged in the product distribution of spices under the trademark Sunrise. The acquisition will help ITC expand its regional FMCG business and an already extensive product line involving several products from packaged foods to personal care products.
Sunrise Foods Pvt. Ltd, with a market presence and experience exceedingly more than 100 years, has a strong market position in the rapidly-evolving spices sector of the eastern part of India, with secure rural linkage for procurement of raw materials and extensive agriculture-commodity sourcing expertise with evolved packaging experience. While already making inroads into overseas markets such as Nepal and Bangladesh, Sunrise Foods has been touted to engage in business opportunities in high-growth locations. The company is poised to interact in areas such as Malaysia, Thailand, Singapore, Japan, and other Western countries, including the United Kingdom, France, Germany, and the United States.
The company representatives have stated that the proposed acquisition is in line with the company strategy to scale up its business in the spices market through a more comprehensive distribution network and strong cuisine expertise. The company already markets spices products under its Aashirvaad brand, with the acquisition set to further strengthen its footprint in the vastly evolving spices market scenario in the region. ITC has already been scaling its spices business in demand-rich areas such as Andhra Pradesh and Telangana, with the company already aspiring to become a significant producer and exporter of premium-quality spices.
ITC is looking to leverage the deeper consumer connect and distribution expertise of Sunrise Foods in the pan-Indian markets, combining the brand with its sourcing and supply chain capabilities. The move will also strengthen the agricultural business of ITC Limited in focused markets with new product ranges and supply hubs. The company’s objective is to set up a significant turnover with strong product sales in other departments as it aims to expand revenue generation streams away from the cigarettes business to FMCG products. ITC already houses several popular FMCG brands like Aashirvaad food & kitchen ingredients, Vivel beauty products, B Natural beverages, and juices, Bingo! Chips, and Yippee! Noodles.
The acquisition has been termed as a signal of positive intent for the company in its product portfolio diversification, as more and more consumers are shifting attention towards the branded sector of Indian spices. The rapid growth of the organized spices sector in recent times has been a testament to the possibilities of new business opportunities for the key players operating in the market. The ITC brand association with trust, premium quality, and total safety would encourage consumers to prefer repetitive commodity purchases. The development would also enhance the company’s objective of intensifying the competitiveness of agro-value chains in the domestic sector while completing meaningful contributions to the farmer income revenue. The premeditated transactions were completed during the Covid-19 restrictions, also reflecting the company’s tenacity and flexibility in dealing with the evolving market conditions.