Emami Agrotech Enters Snacking Market, Invests Rs.750 Crore
Emami Agrotech Ltd, the food division of the Emami Group, launched its venture into India's packaged snacks market worth over Rs.50,000 crore, detailing plans for a Rs.400-crore greenfield food production facility in West Bengal.
Emami Group director Vidula Agarwal stated that the company plans to invest another Rs.350 crore to develop the business into a Rs.1,000 crore brand in the next five to seven years.
Vidula, the daughter of group director Aditya Agarwal and a third-generation promoter, is leading the snacks initiatives.
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The initiative seeks to change the company from its conventional edible oils focus into a more extensive food enterprise, with the snacks division, which has higher margins, anticipated to enhance profitability and business worth.
The suggested facility, set to produce both staples and snack items, will become the company's second production site in West Bengal following Haldia. Emami Group Director Aditya Agarwal informed reporters that the company is searching for an appropriate site and anticipates finishing the project in 24 months.
"We are looking at a greenfield facility in West Bengal with an investment of around Rs.400 crore. The location is yet to be finalised, and we expect to commission the plant in about 24 months. It will manufacture both staples and snacks," Agarwal says.
The company is presently outsourcing the production of its snack range but intends to steadily transition manufacturing in-house as volumes increase through the planned facility.
Agarwal explained that the strategic reasoning for diversification lies in the fact that edible oil is a low-margin business, whereas value-added food segments provide considerably higher returns.
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"Edible oils typically offer margins of 2-4 percent. Kitchen categories such as staples and spices generate around 6-15 percent margins, while snacks can deliver margins of 15-25 percent. As our foods portfolio expands, the overall margin profile of the business will improve," Aditya Agarwal says.
He mentioned that the diversification would also enhance investors' view of the company.
"Pure-play edible oil companies are generally not valued as food companies, and their valuations remain under pressure. Expanding into high-growth packaged foods and snacking will help reposition Emami Agrotech as a comprehensive food company," he says.
The new initiative signifies Emami Agrotech's expansion beyond edible oils, staples, and spices within its Healthy & Tasty range into the rapidly growing packaged snacking sector. The company introduced WeMe, featuring an initial lineup that includes potato chips, Jhuri Aloo Bhaja, and chocolate hazelnut spread in Rs.10 packages. The products will first be available in Kolkata before expanding to additional markets.
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Unveiling the launch, Agarwal stated that the firm considers snacking to be among India's most appealing packaged food prospects. The firm anticipates that the initiative will generate about 1,000 direct jobs and close to 3,000 indirect job opportunities in the state as it expands production, distribution, and marketing.
The firm states that India's packaged snacks sector, which is estimated to exceed Rs.50,000 crore in 2025, is expected to exceed Rs.1.03 lakh crore by 2034, propelled by evolving consumption habits, premium offerings, and the swift growth of quick-commerce platforms.