NEW DELHI – It is peak lunch hour at Haldiram’s. Queues of customers take their pick from the restaurant’s all-vegetarian offerings that range from stuffed paranthas to noodles, as an overworked employee shuttles between two billing stations to take orders.
Less than 200m away, in this commercial neighbourhood of Noida, a city adjacent to Delhi, is another Haldiram’s outlet, part of the Indian food company’s growing footprint of quick-service restaurants. Displayed on the shelves are packaged Indian sweets and savoury snacks such as baked crispy puffs and soan cake, a flaky sweet made with gram flour – highlighting the brand’s dominance in the country’s snacks business.
Haldiram Snacks Food is the market leader in the snacks category, with its packaged products available in millions of supermarkets as well as mom-and-pop stores in India and across the world, including in Singapore.
Its remarkable success has of late whetted the appetite of foreign investors hungry for a bite of India’s burgeoning snacks industry.
In March, Singapore’s state-owned investment firm Temasek picked up a reported 10 per cent stake in the company for about US$1 billion (S$1.32 billion), giving Haldiram’s – which commands an estimated 13 per cent share of the Indian savoury snacks market – a valuation of US$10 billion.
That same month, Haldiram’s announced two new investors: International Holding Company from the United Arab Emirates and Alpha Wave Global in the United States. Media reports in India suggest the two firms may have together acquired a stake of about 6 per cent. A glance at any supermarket shelf in India throws up a dizzying array of appetising sweet and savoury ready-to-eat snacks these days, from ones that come with local flavours such as masala potato chips to those that are inspired by global flavours, like wasabi roasted peanuts.
Besides a wider array of offerings, a shift to urban lifestyles that prioritise convenience, rising income levels, and the growth of online retail and the convenience that comes with it are among the factors driving the lip-smacking growth in India’s packaged snacks industry. The Indian snacks industry is projected to grow at a rate of around 10.5 per cent each year for the next five years, promising healthy returns for investors.
According to GlobalData, a data analytics and consulting company, the market value of the packaged Indian snacks industry could cross 1.4 trillion rupees (S$21.4 billion) by the end of 2029, up from the current estimate of 855 billion rupees in 2024.
Other foreign investors also want a slice of the pie. In April, Singapore-based venture capital firm SWC Global led a US$2.5 million funding round for Delhi-based snack brand Let’s Try. In February, South Korea’s Lotte Wellfood joined in, saying it would introduce more Korean snacks and expand its manufacturing presence in India, with an investment of around US$300 million over the next few years.
Customers queueing in a Haldiram’s restaurant in Noida, a city adjacent to Delhi. ST PHOTO: DEBARSHI DASGUPTA
Ms Mili Dubey, assistant secretary-general of the PHD Chamber of Commerce and Industry, a national not-for-profit trade promotion organisation, said investors are drawn to India’s snacks market because of its “huge growth potential” as more and more consumers look for convenient but healthy eating options – a demand India’s snacking companies are trying to address. Such ready-to-eat snacks are increasingly coming in handy in busy urban households, including for packing children’s lunchboxes or munching on the move, she told The Straits Times. “This is a trajectory that will only grow.”
Mr Manish Kumar, a project manager with GlobalData, added that demand has also grown because of consumers’ growing focus on hygiene. “They prefer packaged products over those that are sold loose,” he told ST.
This shift has been one of the cornerstones of Haldiram’s success story. Its focus on snacks packaging began as far back as the 1970s when it replaced newspaper bags with plastic ones. It later adopted advanced methods such as zip pouches in the 1990s.
Bhujia, one of its most popular snacks, is made with a recipe the firm’s founder Ganga Bhishen Agarwal mastered in Bikaner, in the western Indian state of Rajasthan, where the company began its journey as a small snacks shop in 1937. A pack of these crunchy, deep-fried strands made of gram or moth flour and flavoured with spices, retails for as low as five rupees for a 17g pouch in cities, towns and villages across India.
It is this enviable reach in the Indian market that has drawn foreign investors to the firm, which remains the market leader in the snacks category, as well as other major players.
Penetrating the diverse Indian market can be a formidable challenge. “It is not a very easy thing to do in India as a foreign player, especially when you have just entered the market,” Mr Kumar said.
“So, investing in a player which has already established its footprint in the market is a preferred route because it is then very easy for foreign players to get a share of the Indian snacks market.”
Haldiram’s remarkable success has of late whetted the appetite of foreign investors hungry for a bite of India’s burgeoning snacks industry. ST PHOTO: DEBARSHI DASGUPTA
In January, India opened up its food and beverage sector to 100 per cent foreign direct investment, allowing foreign enterprises to have full ownership and management rights of companies.
This move was part of India’s push to achieve US$100 billion worth in combined exports from the food and beverage, agriculture, and marine products sectors in the next five years.
Ms Dubey saw this as “a game changer” as it would lead to greater capital inflow and technology transfer for Indian players, allowing them to adopt global best practices in areas such as packaging or improving necessary infrastructure such as the country’s cold chain logistics.
“Collaborating with a bigger international partner will surely increase the operational efficiency of smaller or regional Indian players,” she added. “It will also push them to innovate and come up with good quality products that meet stringent international quality standards, opening up doors for them to export across the globe.”
- Debarshi Dasgupta is The Straits Times’ India correspondent covering the country and other parts of South Asia.
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