Tata Consumer Products gearing up to acquire Capital Foods, Organic India: Report

Tata Consumer Products today announced that it has signed definitive agreements to  acquire up to 100% of the issued equity share capital of Organic India, one of the  strongest ‘better for you’ organic brands spanning Food & Beverages and Herbal &  Traditional Supplements. This move is consistent with Tata Consumer’s strategic  intent to expand its product portfolio and its target addressable market in fast 

growing/high margin categories. This acquisition will create a Health & Wellness platform for Tata Consumer Products.  

Organic India is a 25+ years established brand with a geographical footprint covering  over 48 countries, substantially from India and the USA. Its product portfolio spans  premium and high growth categories focused on sustainable living - Herbal  Supplements, Tea & Infusions and Organic Packaged Foods. Organic India has  strong, long standing relationships with 12,000+ farmers and unparalleled end to end  organic certifications across the supply chain. It pioneered commercial cultivation of  tulsi and introduced high value medicinal crops for farming in India. It has a portfolio  of over 100 products in the Health & Wellness space.  

The Total Addressable Market for the categories that Organic India is present in is Rs  7,000 crores in India and Rs 75,000 crores in international markets where Tata  Consumer has a strong presence. This acquisition will provide significant synergy  benefits in distribution, logistics and overheads apart from driving portfolio  premiumization and unlocking additional channels and new markets. Structural growth  drivers for this portfolio include increasing demand for Health & Wellness products,  growing consumer awareness around wellness and changing consumer preferences. 

Sunil D’Souza, MD & CEO, Tata Consumer Products said, “We are excited about  bringing Organic India into Tata Consumer Products. This transaction aligns well with  Tata Consumer’s overall strategic objectives and presents exciting market  opportunities in the rapidly growing Health & Wellness segment. In addition, Organic  India has built very strong relationships with farmers to create a robust organic supply  chain with a trusted brand and a loyal consumer base. Organic India’s differentiated  products and robust supply chain together with Tata Consumer’s distribution strength 

across channels in India and specific geographies globally makes us confident of  accelerating momentum in the business while improving our margin profile.”  

Mr. William Bissell, Managing Director of Fabindia said, “Tata is India’s most  venerated and dynamic brand. For over a hundred and fifty years, it has stood as the  visionary exemplar of Indian values: fairness, preservation of civilizational traditions,  harmony with the natural world, and social uplift for all. That is why we are immensely  excited that they will be guiding Organic India through its next chapter and stewarding  the vital mission for which Organic India stands.  

We at Fabindia echo Jamsetji Tata’s vision that ‘The community is not just another  stakeholder in business but is in fact the very purpose of its existence.’ Organic India works with a community of tens of thousands of farmers who work only with socially  and ecologically sustainable methods. We are confident that Organic India will  continue to thrive with the Tatas’ leadership.” 

Kotak Investment Banking, Trilegal and Sidley Austin have been TCPL’s exclusive  financial and legal advisors for this transaction respectively.