In a strategic move to expand its packaged foods portfolio, DS Group has acquired Good Stuff Pvt Ltd that owns chocolate and confectionery brand LuvIt. The move will strengthen the company’s presence in the chocolates and confectionery space. It also comes close on the heels of the company’s partnership with Swiss chocolate brand Laderach for India.
DS Group, which is known for brands such as Catch Spices and Pass Pass mouth freshener, did not disclose the commercials of the deal. The Bengaluru-based Good Stuff Pvt Ltd, founded in 2014, was earlier owned by Goldman Sachs and Mitsui Ventures.
Rajiv Kumar, Vice-Chairman, DS Group, told businessline the group had been looking to enter the chocolates space for some time to tap into the fast-growing category. “India has low per capita consumption for chocolates compared to evolved markets, so there is huge headroom for growth. With this move, we have a complete portfolio with Laderach in the luxury chocolate space and LuvIt positioned in the mass segment. It is one of the few homegrown chocolate brands. It has a turnover of Rs 100 crore and an established presence in the Southern region,” he added.
The over billion dollar DS Group has a presence in the confectionery segment with brands such as Pulse Candy and Chingles. LuvIt will offer a range of rich milky chocolate, crunchy wafers wrapped in chocolate, fruit and chocolate flavoured lollipops, eclairs, sugar panned chocolates and choco snacks.
“We would focus on making Laderach and LuvIt pan-India brands. We hope to make LuvIt a Rs 500-crore brand over the next three-five years. With rising aspirations in the rural regions, we will look at tapping both urban and rural opportunities for the brands,” Kumar added.
The company said it will continue to rely on third-party manufacturing for the LuvIt brand for now. For the luxury chocolate brand Laderach, the company is exploring options to open up offline stores.
The Indian confectionery market is pegged at about Rs 23,000 crore, of which chocolates as a category dominates with almost 60 per cent share at Rs 13,800 crore.
DS Group’s confectionery business revenues stood at about Rs 900 crore in FY23. “We are aiming to grow the confectionery business at 40 per cent year-on-year. We will focus on expanding the distribution reach as well as adding new products,” he added. The company expects to grow its overall business by 10-15 per cent year-on-year.
Responding to a query on inorganic growth opportunities in the spices segment, which has witnessed M&A action lately, Kumar said, “If the right opportunity comes at the right valuation and price, we will be open to it. Consumers are becoming more brand conscious and shifting to the branded segment in spices for hygiene and convenience. So this consumer shift offers a huge organic growth opportunity in this segment. We are also strengthening our presence in the Southern region.”
The packaged foods company has also expanded its presence in the snacks segment under the Catch and Pulse brands. It also sells dairy products largely in the Rajasthan region.
“While there are macroeconomic challenges , India’s consumption story remains strong. Unlike some developed markets, it continues to offer huge opportunities for growth,” Kumar added.
Source : The Hindu Business Line June 06th 2023