Everstone-led Modern Foods eyes larger food play
Everstone Capital-led Modern Foods Enterprises on Friday said it proposes to enter new food categories using organic and inorganic routes. The company is best known for Modern Bread, a brand launched in 1965. Everstone had acquired Modern Foods from Hindustan Unilever (HUL) in April 2016 for an estimated ~250 crore. The acquisition included not only the Modern trademark but also its manufacturing assets and people. The company has manufacturing plants at Mumbai, Chennai, Kolkata, Kochi, Bengaluru and Hyderabad.
Speaking to Business Standard, Rajev Shukla, managing director, private equity, Everstone Capital Asia, said the company would step into non-bread areas as it plans to quadruple revenue in five years. It closed the 2016-17 financial year with a turnover of ~270 crore and plans to take revenue to ~1,000 crore by 2021.
While Shukla, who is also on the board of Modern Foods, did not elaborate on specific categories that Modern was eyeing, speculation is rife that it will enter categories such as biscuits and beverages. Modern has already expanded its bread and bakery portfolio to cover Indian bread (packaged rotis), cakes, rusks, buns in the past few months. The company will also be expanding in the north and west of India by tying up with third-party manufacturers or getting into franchise and joint venture agreements, Shukla said.
The company is in the process of relaunching Modern Bread, unveiling it in the Mumbai-Thane region on Friday, a market where it ranks third after local brand Wibs and national player Britannia. “We have a share of 15 per cent in the Mumbai market and would like to take this to 20 per cent in the next two quarters,” Shukla said.
The relaunched range of Modern Bread includes eight new variants. “Variants such as whole wheat and multi-grain superseed were launched after studying the market carefully and seeing where consumer preferences were going,” Shukla said.
The relaunched Modern range is expected to be taken to around 20-25 cities in the coming months as the company expands its footprint. The overall bread and bakery market in India is ~27,000 crore, of which 35 per cent constitutes the organised segment, growing at the rate of 12-18 per cent, Shukla said.