PepsiCo has officially entered the race to acquire a stake in Haldiram Snacks Food, India’s largest ethnic snacks company, as per a recent report by The Economic Times. The multinational food giant has initiated talks with the Aggarwal family, who currently own Haldiram, for a minority stake. PepsiCo’s move makes it a late contender in the competition, which already includes prominent global investment firms Temasek and Alpha Wave Global.
According to sources quoted in the report, PepsiCo’s leadership from its New York headquarters has recently started engaging in direct discussions with the Aggarwal family, although these talks are still in the early stages and may not necessarily result in a deal. Unlike PepsiCo India’s operations, the funding for this stake acquisition will be spearheaded by PepsiCo’s US-based parent company.
The Aggarwal family is reportedly seeking a valuation of Rs 85,000-90,000 crore for Haldiram as they look to bring in an external investor for the first time.
Meanwhile, Temasek and Alpha Wave Global have already submitted binding offers for a 10-15% stake in Haldiram. These offers, which were made last month, have pushed the firms into an advanced stage of negotiations. Sources suggest that Temasek is leading the discussions and could be eyeing an investment exceeding $1 billion in the deal.
Haldiram, a dominant player in the ethnic snacks market, offers an extensive product portfolio of over 500 types of products, including popular Indian items such as namkeen, sweets, ready-to-eat meals, and pre-mixed food items. In the financial year FY24, Haldiram reported revenue of Rs 12,800 crore, which is more than double that of PepsiCo’s snacks business in India. PepsiCo India’s snacks business earned Rs 4,763.29 crore during the nine-month period from April to December 2023.
For PepsiCo, a company that already leads the western snacks market with major brands such as Lay’s, Kurkure, and Doritos, entering the ethnic snacks segment could open up new opportunities for growth in the rapidly expanding Indian snacks market. While PepsiCo holds a 24% market share in the western snacks segment, it has a relatively limited presence in traditional Indian snacks like namkeen and bhujiya.
The Indian snacks market, valued at Rs 42,694.9 crore in 2023, is expected to surge to Rs 95,521.8 crore by 2032, according to IMARC Group. Despite this rapid growth, the market remains highly fragmented, with numerous regional players such as Balaji, Bikanerwala, and Bikaji Foods vying for consumer attention alongside Haldiram. These regional brands often compete with Haldiram by offering lower prices, direct distribution, and better retailer margins, making it a significant challenge for larger players like PepsiCo to penetrate this market.
PepsiCo India, which faces mounting pressure to expand its snacks division, finds itself in a unique position. Its beverages business in India is nearly exclusively managed by Varun Beverages Ltd (VBL), a listed company under RJ Corp, meaning PepsiCo has been seeking new avenues to increase its market share in the snacks sector.
PepsiCo’s decision to enter the bidding race for a stake in Haldiram marks a significant development as the company looks to expand its footprint in the fast-growing ethnic snacks market in India. While Temasek and Alpha Wave Global are already ahead in negotiations, PepsiCo’s interest highlights the value of Haldiram’s market leadership in the segment.
With India’s snack market expected to grow significantly in the coming years, PepsiCo’s entry could signal the beginning of a new phase for both the brand and the sector. As Haldiram remains the dominant player, the competition for a stake in the company will likely intensify, shaping the future landscape of the Indian snack industry.