Tata Consumer Products to buy Tata Q owner Tata SmartFoodz for Rs 395cr
Tata Consumer Products Limited (TCPL) has agreed to acquire Tata SmartFoodz Limited (TSFL), a ready-to-eat (RTE) packaged food products business, from Tata Industries Limited for INR 395 crores.
This move is consistent with Tata Consumer Products’ strategic intent to expand into value added categories.
According to the Indian consumer products company, the acquisition is in line with its strategic plan to grow into more value added categories.
Tata SmartFoodz began operations in the year 2019 and in the space of a few months is claimed to have become a top player within the ready-to-eat market in India. Its manufacturing facility is located in Sri City, Andhra Pradesh.
Under the brand name Tata Q, Tata SmartFoodz offers an assortment of ready-to-eat products that are made with MATS technology, which is said to help preserve flavor, texture, and nutrients throughout the supply chain.
The range of products from Tata SmartFoodz is said to cater to people who want tasty, quick, and healthy food items on-the-go. The company’s current offerings include noodles, pasta, biryani, and combo meals.
Balark Banarjea — CEO of Tata SmartFoodz said: “Being part of Tata Consumer Products will enable us to strengthen our market presence and scale up the business. It will allow us to leverage Tata Consumer’s strength in modern trade and e-commerce channels in India and also its global presence to target key International markets for RTE exports.
“It will also help us augment our innovation pipeline and unlock synergies across our business.”
Tata Consumer Products added that the acquisition will allow it to expand its product range and move into the ready-to-eat segment. In India this category is anticipated to expand at a substantial speed due to the effects of demographics that include urbanization as well as nuclear families with high disposable income seeking convenient, nutritional and hygienic food on the go, said Tata Consumer Products.
The Indian consumer products company said that the ready-to-eat segment is already huge and growing solidly in the international markets where it already has operations.
Tata Consumer Products plans to utilize its current local and international distribution capabilities and concentrate on operational excellence to maximize value of the ready-to-eat business. The MATS technology of Tata SmartFoodz is also expected to help Tata Consumer Products create a pipeline of value-added items in other areas of the foods business.
Sunil D’Souza — MD and CEO of Tata Consumer Products said: “Tata SmartFoodz is a good strategic fit for us given the nature of its business and it will also allow us to expand our portfolio into the Ready to Eat segment. RTE is a fast-growing segment in India and a sizeable opportunity in the International markets.
“The acquisition will give us access to a unique technology and the product portfolio synergizes well with our existing distribution infrastructure both in India and internationally. We believe Tata Consumer Products is well positioned to help unlock the market potential of this technology and scale up this business to meet the growing consumer need for wholesome, trusted and convenient food offerings.”
Last month, Tata Consumer Products said that it will transfer its Tata Cha tea café format quick service restaurant (QSR) chain to Qmin-Shops.