FMCG major Marico Ltd on Monday said it has acquired a majority stake in HW Wellness Solutions Pvt Ltd, the owner of direct-to-consumer snacks brand True Elements.
The Mumbai-headquartered company bought a 53.98% equity stake in the digital-first "healthy breakfast" brand through primary infusion and secondary buyouts, according to Marico's exchange filing.
True Elements offers a wide range of more than 70 products spanning across categories of Western breakfast (oats, quinoa, muesli, granola, flakes), Indian breakfast (poha, upma, dosa), snacks (roasted seeds, seed mixes, raw seeds), among others.
"True Elements is another step towards expanding our total addressable market in the healthy foods segment. We believe the ethos of the brand complements the purpose that drives Marico. The exciting range of products bring to life the rare and virtuous blend of quality, taste and health at the right price," says Saugata Gupta, managing director and chief executive officer at Marico. "This adds another digital-first brand in our portfolio, which not only has a distinct proposition but also exhibits strong fundamentals along with a growing digital and offline presence," he adds.
In an interview to Fortune India earlier this year, Gupta had said a D2C food brand isn't viable as a business. "For food, you need a ticket size of $8-$10. Unless you are in nutraceuticals, traditional food has lower ticket size and lower gross margins. Food requires scale. The unit economics of a D2C food brand doesn't work." He, however, added that D2C brands are a must-have, they need to be looked at through a totally different lens.
Available on over 90 online platforms and in over 12,000 retail outlets, True Elements currently garners majority of its business through online marketplaces and plans to significantly ramp up its offline presence over the next few years.
"As a brand, True Elements has always focused on staying 'True' across all its touchpoints - including Purpose, People, Product and Planet, and we are glad to have found a partner who echoes this way of thinking. True Elements built its first phase of growth behind a portfolio of innovative Clean Food and building high consumer trust- while we continue to push the bar on those, our next phase will be focused on long term brand building and accelerating our entry into newer households," says Puru Gupta, CEO and co-founder of HW Wellness Solutions.
Commenting on the deal, Sreejith Moolayil, COO and co-founder of True Elements, says: "In addition to value systems, we see strong synergies with Marico in terms of our aspirations for the brand and are confident that this partnership will only make our promise of providing clean, healthy & no nonsense food much stronger."
Marico is among the first legacy companies to adopt a D2C brand strategy. The company recorded a turnover of $1.3 billion through its products sold in India and markets in Asia and Africa during the financial year 2021-22.
Marico's portfolio of brands includes Parachute, Saffola, Pure Sense, Coco Soul, Set Wet, Livon, Just Herbs and Beardo among others. Its international business contributes to about 23% of the group's revenue.