PepsiCo Joins the Bidding Race in Haldirams

Pepsico has swung into action as the FMCG giant is in the race to acquire a stake in Haldiram Snacks Food, sources said. Key contenders include Temasek and Alpha Wave Global, who are looking forward to claiming a pie in India’s largest ethnic snacks and convenience foods maker. All the bidders have been offered 10-15% stake in the company.

PepsiCo has initiated talks with members of the Aggarwal family for buying a minority stake in recent weeks. However, the agreement may not transition into fruition, sources said.

Valued between ₹ 85,000-90,000 crore, Haldirams is rooting for investors for the very first time.

Notably, Pepsico has been facing stiff competition from the domestic snacks market.

Overview of regional players

India has seen an increase in regional players and direct-to-consumer snacks makers. Barring heavyweights like Haldiram, Bikanerwala and Balaji, and listed companies Bikaji Foods, Gopal Snacks and Prataap Snacks, the ethnic snacks market is flooded with regional players. In fact, they are the ones who charge less than the national brands and reap out higher retailer margins.

PepsiCo’s beverages business include Pepsi, Mountain Dew and 7Up carbonated drinks, and Slice and Tropicana juice drinks, which is managed by Varun Beverages Ltd (VBL). An executive said, “With beverages bottling outsourced to VBL, PepsiCo India’s core focus is snacks, a market where it is no longer as dominant as it used to be.”

With a 24% market share, PepsiCo leads in western snacks, which includes chips and nachos. It is far behind in ethnic snacks category– namkeen, bhujiya, chana chur, etc.

PepsiCo India Holdings clocked a revenue of ₹5,954.16 crore for the nine-month period between April to December 2023. In the same period, their snacks business (Kurkure, Lays, Doritos and Quaker) accounted for a revenue of ₹4,763.29 crore.On the other hand, Haldiram Snack Foods reported revenue of Rs 12,800 crore in FY24.

An executive said, “With the merger of its north and west operations, Haldiram has market dominance in ethnic snacks.”

It added, “For PepsiCo, even a minority stake with Haldiram will give it huge access to distribution strength pan-India and a foothold in massive bandwidth in ethnic snacks.”