InvestorQ : What is the purpose of Adani Wilmar buying out the Kohinoor brand?
shrinidhi Rajan made post

What is the purpose of Adani Wilmar buying out the Kohinoor brand?

10 months ago

Adani Wilmar, which recently listed and showed a rapid price appreciation, has now made a big to strengthen its leadership in Basmati Rice as well as to broaden its foray into the lucrative FMCG business. Adani Wilmar announced the acquisition of the highly respected Basmati Rice brand “Kohinoor” from McCormick Switzerland GmbH. The filing with the regulators was made by the company late on Tuesday.

Post the takeover, Adani Wilmar gets exclusive rights over the use of the brand “Kohinoor”, Basmati Rice, which has a very strong franchise in India and also in foreign countries. In addition, Adani Wilmar also gets the “Ready to Cook” and the “Ready to Eat” curries portfolio of Kohinoor as well as its vast and lucrative meals portfolio. All these products sold under the Kohinoor brand, till now, will be sold under the Fortune brand going ahead.

According to a statement by Adani Wilmar, the Kohinoor brand of food products is a trusted brand in India which represents the authentic flavours of India. Past experience has been that people who consume this brand have also shown a high degree of manufacturer loyalty due to its unique flavour. For Adani Wilmar, this acquisition allows them to expand their product portfolio into the higher margin branded staples and food products segment.

In India, bulk of the food and eatables market is still informal and unpacked. On grounds of hygiene and preservation, packaged foods make for more sense and also add more value. As a result, the packaged food category in India is grossly under-penetrated with significant headroom for growth. Adani Wilmar also added that the Kohinoor Brand has a very strong brand recall and would help accelerate leadership position in the Food FMCG category.

Adani Wilmar has just declared its results and the revenues crossed that of Hindustan Unilever effectively making Adani Wilmar the largest FMCG company in India. Adani Wilmar has had a stellar listing after its recent IPO and since listing the stock is up more than 150% making it a star performer in such tough market conditions. With this deal, Adani will be able to augment a strong product basket with premium scalable brands with high margins.

In addition, Kohinoor brand can also drive synergies for Adani Wilmar across geographies and complements the reach of their flagship Fortune brand in the food FMCG domain. The acquisition will take the growth of Adani Wilmar to the next level of sophistication and widen the portfolio. The idea here is to cater to premium customer segments across rice and other value-added food businesses ensuring greater wallet share of the customer.

The Kohinoor brand portfolio comprises of; Kohinoor premium Basmati rice; Charminar brand affordable rice and Trophy brand for HORECA segment. Adani Wilmar was floated as a joint venture between Adani group based out of Gujarat and Wilmar of Singapore. The aim of Adani Wilmar has always been to have a farm to fork approach and dominate the complete food value chain in India.