The all-cash deal includes primary infusion of capital and secondary buyouts of equity in the clean label, digital-first brand, the maker of Parachute and Saffola oil said, without disclosing the acquisition amount.
Pune-based HW Wellness had raised Rs 10 crore ($1.36 million) in January last year from Maharashtra State Social Venture Fund (MSSVF), managed by Sidbi Venture Capital, a wholly owned subsidiary of Small Industries Development Bank of India.
“True Elements is another step towards expanding our total addressable market in the healthy foods segment. We believe the ethos of the brand complements the purpose that drives Marico,” said Saugata Gupta, managing director and CEO, Marico Ltd. “This adds another digital-first brand to our portfolio, which not only has a distinct proposition but also exhibits strong fundamentals along with a growing digital and offline presence.”
Indians still prefer traditional or savoury ready-to-eat corn flakes and muesli alternatives in the country’s snacking market, especially breakfast options.
Over the past few years, companies including MTR, ID Fresh, PepsiCo and Marico have driven the market as consumers switch to healthier options such as oats and whole-grain meals.
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Founded in 2015 by Puru Gupta and Sreejith Moolayil, True Elements sells products spanning Western breakfast (oats, muesli, granola, flakes), Indian breakfast (poha, upma, dosa), Snacks (roasted seeds, seed mixes, raw seeds), among others.
It sells through more than 90 online platforms and in over 12,000 retail outlets.
“The company plans to significantly ramp up its offline presence over the next few years,” it said.
As of June 2021, the company’s annualised revenue run rate (ARR) stood at Rs 70 crore.
“True Elements built its first phase of growth behind a portfolio of innovative clean food and building high consumer trust…our next phase will be focused on long-term brand-building and accelerating our entry into newer households,” Gupta, co-founder and CEO of HW Wellness, said.
Direct-to-consumer (D2C) brands are focusing on healthy foods with the possibility of hyper customization, threatening mainstream companies in such niche and premium segments, said analysts.
“New categories that were earlier fragmented such as dried fruits and nuts, are being targeted by D2C companies. The health-oriented food space has seen traction with the rise of D2C brands,” HDFC Securities said in a report recently. “Traditional brands do have an opportunity to tap into this vast space. Companies like Marico and ITC are adopting industry trends by increasing their product baskets. With a growing health-conscious population, the nutrition health space is here to stay,” it added.
According to a report by Avendus Capital, India is expected to see a 2x increase in per capita spending on healthy foods by 2026. The segment will grow to $30 billion in the next five years, it said.
India is the fastest-growing health food market, expanding at 20% Compounded Annual Growth Rate, said Avendus Capital, the investment banking arm of Avendus Group.
In calendar year 2020, health-focused foods and beverages were 11% of the $88 billion packaged foods and beverages market in India. This is expected to move up to a 16% share, or $30 billion by 2026.
