Tata Consumer Products ( TCPL) is in advanced discussions to buy Danone SA’s India nutraceuticals and specialised nutrition portfolio, according to people familiar with the matter, as the company makes a strong push in the fast-growing wellness and nutrition market.
Negotiations going on for the past few months gathered steam lately, said one of the persons. The two sides are also close to an agreement on valuation, it is learnt. An acquisition would give the Tata Tea maker entry into the value-added nutrition segment, where it will join rivals Nestlé and Abbott. TCPL has been building a broader wellness ecosystem, mostly through acquisitions like Soulfull, Capital Foods and Organic India, and expanding into protein-rich foods, organic staples and functional beverages.
The company has been on the prowl for acquisitions for several years to enter segments beyond core staples and tea, said Abneesh Roy, executive director at brokerage Nuvama Institutional Equities.
Proteins Segment a Battleground
“But cracking the nutraceuticals and infant nutrition space won’t be easy. While the Tata name adds trust in sensitive categories like infant nutrition, the segment is highly regulated and has stronger rivals like Nestlé,” he said. “Protein has emerged as one of the hottest battlegrounds across FMCG, with almost every major player entering the segment.”
Danone and TCPL did not respond to queries.
Tata Consumer managing director Sunil D’Souza has consistently said he will not overpay for brands or get drawn into valuation games, telling ET previously that he has a strong “middle-class mindset.” The country consumes protein mainly in the form of powder, and companies have been primarily targeting gym users. The health food industry has boomed in India post-pandemic – even dairy giant Amul entered the protein market two years ago. TCPL has also entered the plant-based meat products industry under the brand Tata Simply Better, with nuggets and burger patties. ITC has launched plant-based protein products like burger patties and nuggets, and more recently, its egg and milk biscuits.
Nestlé India has partnered with restaurant chains Social and Boss Burger to introduce a trial launch of Maggi Professional’s plant-based offerings. In India, the French foods giant draws the majority of its revenue from its nutrition portfolio acquired from Wockhardt for Rs1,576 crore comprising brands such as Farex, Dexolac, and Protinex in baby nutrition and adult protein supplements categories, which have been growing faster than the broader packaged foods market on the rising demand for preventive health and immunity-boosting products. India’s demographic surge is marked by 23 million births a year and almost half a billion people who will turn 65 by 2030, making it the core market for the specialized nutrition category. Danone’s India business, too, has had many pivots. After it parted ways with Britannia over biscuits in 2009, ending a 13-year partnership, it entered nutrition by acquiring Wockhardt’s portfolio in 2012 and separately built a dairy business from 2010. But it could not take on big cooperatives like Amul and Mother Dairy and exited the dairy business in 2018, refocusing its strategy on nutrition.
