Reliance Consumer Products snaps up Ravalgaon’s candy brands

Reliance Consumer Products, a subsidiary of India’s largest conglomerate Reliance Industries, has acquired the candy business of Ravalgaon Sugar Farm for Rs 27 crore ($3.7 million). The deal includes the transfer of Ravalgaon’s trademarks, recipes, and intellectual property rights of nine popular candy brands such as Pan Pasand and Coffee Break.

confectionery
confectionery

Reliance Consumer Products expands its confectionery portfolio

Reliance Consumer Products (RCPL) is a wholly-owned subsidiary of Reliance Retail Ventures, which is the retail arm of Reliance Industries, the oil-to-telecom giant owned by India’s richest man Mukesh Ambani. RCPL operates in the fast-moving consumer goods (FMCG) sector, with products ranging from beverages, snacks, staples, personal care, and household items.

The acquisition of Ravalgaon’s candy business is RCPL’s latest move to strengthen its presence in the confectionery segment, where it already owns two brands – Lotus Chocolate and Toffeeman. RCPL has been following a strategy of acquiring old and distressed Indian brands and reviving them with new investments and innovations. For instance, RCPL had acquired the Campa Cola brand, a once-popular soft drink that had faded away, and relaunched it in 2022.

RCPL said that the acquisition of Ravalgaon’s candy business will help it to offer a wider range of products to its customers and consumers, and to leverage the strong brand equity and heritage of Ravalgaon’s brands. RCPL also said that it will continue to explore opportunities to grow its confectionery portfolio organically and inorganically.

Ravalgaon Sugar Farm exits the candy business

Ravalgaon Sugar Farm, founded in 1942, is a sugar manufacturing company that also produces sugar-boiled confectionery, jams, and sauces. The company owns nine candy brands, such as Pan Pasand, Cheer, Mango Mood, Coffee Break, Tutty Fruit, Assorted Center, Choco Cream, and Supreme. These brands are well-known among Indian consumers, especially the older generations, for their distinctive flavors and quality.

However, Ravalgaon has been struggling to sustain its candy business in recent years, due to various factors such as increased competition from both organized and unorganized players, rising costs of raw materials, energy, and labor, aging machinery and equipment, and changing consumer preferences and behavior. The Covid-19 pandemic further worsened the situation, as the demand for impulse products like candy declined due to the lockdowns and social distancing measures.

Ravalgaon said that it decided to sell its candy business to RCPL, as it was unable to effectively pass on the cost increases to its customers, and as it wanted to focus on its core sugar business and other value-added products. Ravalgaon said that it will retain all its other assets, such as property, land, plant, building, equipment, and machinery, and that it will not engage in any business activity that competes with RCPL’s products. However, Ravalgaon said that it can still do contract manufacturing and packaging for third parties, including RCPL.

The outlook for the candy market in India

The candy market in India is estimated to be worth around Rs 9,000 crore ($1.2 billion), and is expected to grow at a compound annual growth rate (CAGR) of 9.5% from 2020 to 2025, according to a report by Research and Markets. The market is driven by factors such as rising disposable income, urbanization, young population, and increasing demand for premium and innovative products.

The market is also highly competitive and fragmented, with the presence of both domestic and international players, such as Parle Products, ITC, Perfetti Van Melle, Mondelez, Nestle, DS Group, and Mars. These players are constantly launching new products, flavors, and variants, to cater to the evolving consumer tastes and preferences. Some of the emerging trends in the market include sugar-free, organic, natural, and functional candies, as well as candies with exotic and ethnic flavors.

The acquisition of Ravalgaon’s candy business by RCPL is likely to intensify the competition in the market, as RCPL will leverage its distribution network, marketing capabilities, and financial resources, to revive and grow Ravalgaon’s brands. RCPL will also face the challenge of retaining and attracting consumers, especially the younger ones, who may not be familiar with or loyal to Ravalgaon’s brands.

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