Exactly a year after announcing its exit from the dairy business in India, French multinational food products giant Danone is leading an investment of Rs 182 crore into local yogurt maker Epigamia, a move that will help the company retain a presence in the market although a top company executive downplayed speculation of a revival of the company’s past plans.
“This is a minority venture investment, so Epigamia will continue to operate independently,” Laurent Marcel, MD of Danone’s venture investment arm, said confirming the deal. Marcel said Danone would collaborate with Epigamia in areas of brand management, distribution expansion, manufacturing, quality and food safety though the investment would be independent of Danone’s business in India.
“This is a promising opportunity to partner with a modern and agile consumer brand which is attractive to millennials and positioned in a dynamic and high potential market,”
Marcel said. Cipla’s executive vice-chairman and member of the company’s founding family Samina Vaziralli is also co-investing with Danone, Epigamia’s co-founder and CEO Rohan Mirchandani told ET. Mirchandani, an NYU and Wharton School alumnus, founded the yogurt company in 2008.
The fresh funding will help the company execute an ‘ambitious’ business plan that entails rolling out its dairy products distribution across 25 cities in India, according to Mirchandani. Danone set up a venture investment arm in 2016 to back early-stage entrepreneurs that are building health food brands that could help the company further its manifesto to “create a healthy and sustainable future of food”.
The investment arm, which has offices in New York and Paris, had not made a single investment in Asia till it zeroed in on Mirchandani’s company.
“Danone would be gaining a foothold in the value-added end of the yogurt market, which requires restricted distribution through this investment,” said Sangeeta Talwar, author of The Two-Minute Revolution and former South Asia president of Tata Global Beverages.
“This is complementary to their product portfolio in international markets,” she said. For Mirchandani, this will be the third round of funding raised by the company. It had raised around Rs 90 crore from Verlinvest, the family office of the founders of beverage giant Anheuser-Busch InBev 18 months ago.
Mirchandani branched into yogurt after initially launching the Hokey Pokey brand of ice creams. The yogurt business has grown sales exponentially even though it was launched much later. Epigamia expects to clock around Rs 100 crore in sales by the end of this fiscal. The brand is retailed through organised retailers such as Reliance Fresh, Nature’s Basket, Future Group’s Big Bazaar and online retailers such as Big Basket and Amazon.
Global strategic interest in India’s dairy space has remained robust despite some unsuccessful attempts by international players such as Danone to set up a presence here organically. More recently, New Zealand’s dairy giant Fonterra entered into a JV with Future Group.
Source: ETRetail
