TCP has agreed to acquire 100% of the issued and paid-up equity share capital of KAF for Rs155.8 crore ($23.4m), according to a filing.
The Tata Group has been actively unifying its food and beverage interests under TCP. The company’s product portfolio includes tea, coffee, water, salt, pulses, spices and RTC offerings. The latest addition gives it a foray into previously unexplored areas.
Tata said the acquisition is consistent with its strategy to ‘participate in multiple consumption occasions’, including the fast-growing on-the-go and on-the-table categories.
Soulfull was launched in 2013 by Bengaluru-based KAF in 2013 and has a strong presence in India’s health and wellness-focused segment.
The company posted sales of Rs 39.38 crores ($5.9m) in 2020 for its range of millet-based cereals, snacks, muesli and plant-based protein drinks – such as Ragi Flakes, Ragi Bites, Millet Muesli and Smoothix – along with ready-to-cook dosa mixes, which are popular among urban convenience-seeking and health-conscious consumers.
The Soulfull brand will allow TCP to bring ‘healthy’ competition in a sector dominated by Western-style breakfast cereals.
India’s breakfast cereals market – valued at Rs 1,400 crore ($2bn) in 2019 – has been dominated by Western-style offerings like corn flakes for many years. Kellogg India remained the leader in breakfast cereals in value terms in 2020.
However, according to Euromonitor, the segment witnessed a major boost in consumption globally during COVID-driven lockdown, opening opportunities for a raft of traditional offerings like upma (a thick porridge from dry-roasted semolina or coarse rice flour), khichdi (a dish made of rice and lentils) and dosa (a type of pancake).
Tata also noted the synergies with its existing business in distribution and logistics. Soulfull jumped onto the direct-to-consumers (D2C) ecommerce bandwagon in April last year and even offers consumers a monthly subscription delivery direct to their doorstep.