Dabur Launches Ready To Drink Mocktails Under Real

Kraft Heinz Co. has cut down the number of bidders for a portfolio of Indian businesses it’s selling that includes the children’s milk drink Complan, people with knowledge of the matter said.

India’s biggest conglomerate,Tata Group and Dabur India Ltd., the $11.3 billion consumer-goods company, are among suitors selected for the second round of bidding, according to the people. The sale has also drawn interest from an arm of Cadila Healthcare Ltd. and other potential buyers, the people said, asking not to be identified because the information is private.

Kraft Heinz has been seeking about $1 billion for the assets, the people said. Besides Complan, the selling Indian business products include the Glucon D instant energy drink, Nycil talcum powder and Sampriti clarified butter, the people said.

Kraft Heinz extended gains in New York trading Friday, rising 5.9 percent to $62.90 at 9:54 a.m. after earlier touching $63.04. That’s the biggest intraday jump since May.

Tata Group is considering doing any potential deal through listed unit Tata Global Beverages Ltd., according to one of the people. Spokesmen for Tata Group, Dabur and Tata Global Beverages declined to comment. Representatives for Kraft Heinz and Cadila didn’t immediately respond to requests for comment.

Any transaction would add to the $11.9 billion of acquisitions targeting the Indian consumer industry this year, data compiled by Bloomberg show. Kraft Heinz is bringing Complan to market as U.K. pharmaceutical firm GlaxoSmithKline Plc weighs selling its stake in its Indian consumer health subsidiary, which owns malted milk brand Horlicks.

One of the persons in the know of the matter said, "The price sought by Kraft Heinz translates into more than 20 times earnings before interest, taxes, depreciation and amortization. Some potential bidders have balked at the valuation, due to what they see as lower growth prospects for certain products amid changing consumer tastes in India, the people said.

There’s no confirmation of suitors to proceed with binding offers, and Kraft Heinz could decide to keep the business, according to the people.

The country’s leading FMCG firm, Dabur India has planned to infuse Rs 250-300 crore in capacity expansion this fiscal year along with the acquisitions plans in the domestic market, senior officials said.

"We are going in for brownfield expansion to increase capacity this year. We will have approximately Rs 250-300 crore capex (capital expenditure) for the current year going forward in FY19," Dabur India chief financial officer Lalit Malik said at an investor concall following announcement of the company's March-quarter results recently.

The company has just done a couple of acquisitions in South Africa, and is looking at doing something "substantial" in India going forward, the company's chief executive officer, Sunil Duggal, explained to analysts.

"...we are still looking at some targets but nothing is really coming out of it. Our intent in terms of M&A remains completely intact. We still have over Rs 2,000 crore of cash in the pocket and it will be built up during this year as well. So I think we do have the ability and the resources to do acquisitions even of a large size," he said.

The FMCG major had last month acquired two South Africa-based firms D&A Cosmetics Proprietary and Atlanta Body & Health Products Proprietary through its subsidiary.

Dabur had also announced last year that it will acquire the two personal care products companies for a total cash consideration of 50 million rands (about Rs 25 crore).

Duggal also informed that the company is focusing on international business, as it offers higher margins.

He said, "We would not expand in the domestic business, expansion will come from international, so the blended margins may look better," adding the company should be able to protect domestic margins, but he does not see any great possibility of increasing the same.

Dabur India reported a 19.04 per cent increase in consolidated net profit at Rs 397.18 crore in the March quarter, against Rs 333.65 crore in the same year-ago period.

Total income grew 6.38 per cent to Rs 2,106.15 crore, compared with Rs 1,979.72 crore.

Ethnic drink brand Paper Boat seems to be slowing down after sailing high for almost seven years, as health-conscious consumers are looking for sugar free products.

Hector Beverages, maker of Paper Boat, posted a tepid 12.5% growth in the year ended March 2017 after doubling its sales in the previous year.

Hector Beverages reported sales of Rs 69 crore and net loss of Rs 78 crore for 2016-17, as per its latest filing with the Registrar of Companies (RoC). It had posted sales of Rs 62 crore and net loss of Rs 84 crore in the previous year.

Rival beverages makers PepsiCo and Coca-Cola, too, have been struggling to grow their sales while top confectioners Mondelez and Ferrero India posted one of their slowest sales growth last year.

While Paper Boat sells non-carbonated drinks, the products are still high in sugar and aren’t considered healthier than other beverages such as fruit juice.

PepsiCo's Tropicana, a billion-dollar brand globally, has lost about 5% share of India’s Rs 2,000-crore packaged juices market that is witnessing a steady consolidation at the top by home-grown Dabur’s Real brand.

Tropicana has dropped a 5% share — both by value and volume — between April 2016 and January 2017 compared with the corresponding period a year-ago, two officials quoting data by researcher Nielsen said.

By contrast, Real has gained about 2.5% each on both parameters, according to the data. New entrant ITC’s B Natural and ethnic drinks maker Paper Boat — both marginal players — have gained slightly in the period, the data show.

With Rs 1,000-crore in retail sales, Real is the single largest brand for Dabur in the country. The brand has introduced juices based on local fruits such as mausambi, jamun and amla, and Dabur’s distribution muscle is also seeking to establish the low-priced mango fruit drink, Ju.C. Dabur marketing head (juices and beverages) Mayank Kumar attributed the brand’s market share gains to India’s increasing health awareness.

Kumar said, "Time-pressed lifestyles of urban Indians have led to the demand for convenient breakfast and snacking solutions such as packaged fruit juices."

He added that the growth of Real and its no-added -sugar variant Activ have been volume-led, fuelled by the 200-ml packs in low-penetration geographies.

Wider distribution and on-ground visibility provided further traction, he said. An email to Nielsen remained unanswered until the publication of this report.

A PepsiCo spokesperson said, “As a policy, we cannot comment on market share. Having said that, the data is not reflective of Tropicana’s strong double digit growth year-on-year in 2016. Tropicana has been one of the fastest growing beverage brands in our portfolio, and 70% of its growth was on the back of locally relevant innovations.”

She cited variants such as mosambi and Alphonso as examples of drinks based on Indian fruits.

The spokesperson added that PepsiCo has expanded the Tropicana franchise with functional juices under Tropicana Essentials, developed to address “specific deficiencies”.

Dabur’s new sub-brand Ju.C will compete in the bigger fruit drinks market that comprises of Parle Agro’s Frooti, PepsiCo’s Slice and Coca-Cola’s Maaza. This category is separate from juices and nectars where Tropicana and Real compete.

Advertising Standards Council of India (ASCI) has again taken Baba Ramdev’s Patanjali on a rollercoaster ride for promoting misleading advertisement campaign. The watchdogs have already ordered the company to either modify or withdraw their ad campaign for Honey, terming it as misleading and its purity claims as 'unsubstantiated'.

ASCI has taken a step after it had received complaints from Dabur India claiming that Patanjali’s Honey ad campaign is demeaning the image of its counterparts. Retaliating on ASCI's orders, Patanajali’s spokesperson stated that brand has filed a case against ASCI in court. The board doedn't has any experts on board and has no authority to take any decision in these matters. Patanjali is waiting for the next hearing in which ASCI will be taken to task.

ASCI said Patanjali's claim 'Patanjali honey - purity ki Double Guarantee' was not substantiated and was misleading. Patanjali had, in its advertisement, claimed that it conducts more than 100 tests on Patanjali Honey on the basis of parameters established by BIS and FSSAI.