Prataap Snacks banks on sweet snacks to boost bottom line

By Gill Hyslop contact

- Last updated on GMT

Prataap traditionally manufacturers savory snacks, including puffs, chips and popcorn, but has moved into the sweet snack sector. Pic: Prataap
Prataap traditionally manufacturers savory snacks, including puffs, chips and popcorn, but has moved into the sweet snack sector. Pic: Prataap

Related tags: Prataap Snacks, Yellow Diamond, India

Yellow Diamond brand owner Prataap Snacks is counting on an expanded sweet snacks portfolio and the recent acquisition of Gujarat-based Avadh Snacks to boost its earnings.

Prataap is working on widening its portfolio of sweet snacks, with the recent launch of cupcakes and the rollout of Tiffin Cakes and Layer Cakes expected in the second half of FY20. The company forecasts the increased contribution from this category will help its bottom line.

“Sweet snacks portfolio contributed 2% of turnover in FY19, which the management intends to enhance to 10% through new product launches and distribution expansion,”​ it said.

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The company said its investment in Avadh last October​ has also already resulted in tangible benefits to its bottom line.

Prataat acquired 80% equity stake in Avadh to enable it to break into the highly lucrative Gujarat market, India’s second largest snacks market with the highest per capita consumption.

“The acquisition helps us deepen our presence in the key Gujarat market. None of the national players have been able to make a mark in this market yet. But, Avadh will aid us in distribution synergies across Gujarat and neighbouring markets,”​ said a company’s spokesperson.

Avadh is currently the fastest growing snacks player in Gujarat with a 6% market share, clocking in a 25.1% CAGR over the past three years.

Prataap is planning to increase capacity in Avadh’s Rajkot facility by 50% by the end of this month.

This comes on top of a sustained expansion in Prataap’s capacities to cater to a larger market. The company has nearly trebled its manufacturing base over past two years and now has 14 facilities.

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