Why is PepsiCo interested in Haldiram? Answer lies in India's big snacks market

PepsiCo is the latest beverage & FMCG major to enter the race to acquire a minority stake in homegrown ethnic snacks manufacturer Haldiram Snacks, with other prominent investors like Temasek and Alpha Wave Global also in the fray.

The discussion reportedly started in December 2024, with these key investors initiating talks with the owner, the Agarwal family, for a possible stake sale of 10-15%. The Agarwal family is reportedly eying a minority stake sale at a potential ₹85,000-90,000 crore valuation of the snacking giant.

In a response to a Fortune India query on the matter, Haldiram Snacks said they are "not commenting" on the issue at this stage.

Multiple media reports suggest if talks with PepsiCo move to the advanced stages, the investment for the potential stake sale could come from the parent company in the U.S.

What is important to note is that PepsiCo's interest in Haldiram ties up with the beverage major's larger goal vis-a-vis India: make headway into the ethnic snacks market, a segment it has, thus far, failed to dominate due to stiff competition from major local players, such as Haldiram.

The wider distribution network and better positioning in the ethnic snacks market play well for the company's India strategy as well.

Haldiram has a widespread network of 100 C&F (clearing and forwarding agents) and 1,000 distributors in India, with Haldiram Products being available in more than 70 lakh outlets. The company claims to be the world’s no. 1 manufacturer and exporter of Indian best sweets and snacks.

The company has also created a strong network outside India, with production facilities in the U.S., U.K., Canada, Europe, Australia, New Zealand, the Far East, the Middle East, Moscow, Japan, Sri Lanka, Nepal, and Thailand.

PepsiCo owns a leading array of brands like Doritos, Kurkure, and Lay's in the food category, while it has 7Up, Gatorade, MountainDew, Nimbooz, Pepsi, Slice, Sting and Tropicana in the beverages segments. Most of them are industry-leading brands, though PepsiCo does not have an edge in the ethnic snacks segment. The current talks with Haldiram could help it fill that gap.

The Haldiram group comprises Haldiram Snacks Private Ltd (HSPL/Haldiram Snacks) and Haldiram Foods International Private Limited (HFIPL/Haldiram Foods). HSPL is engaged in the manufacture and distribution of packaged food products in India such as snacks, namkeen, sweets, ready-to-eat or premix food, frozen food, biscuits, non-carbonated ready-to-drink beverages, pasta etc. Headquartered in Delhi, HSPL’s operations are primarily run by Manohar Agarwal and Madhu Sudan Agarwal (Delhi Family).

Haldiram Foods International is similarly engaged in the manufacture and distribution of packaged foods products such as snacks, namkeen, etc, but it is headquartered in Nagpur, and its operations are primarily run by Kamalkumar Shivkisan Agrawal (Nagpur Family). Haldiram Snacks Food (HSFPL) is a newly incorporated entity that undertakes the FMCG business of the group.

The India snacks market is estimated to have reached ₹42,694.9 crore in 2023, according to the IMARC Group data. Looking forward, the market is expected to exhibit a growth rate (CAGR) of 9.08% to reach ₹95,521.8 crore by 2032.