Hindustan Unilever to acquire stake in Oziva and Wellbeing Nutrition
Hindustan Unilever (HUL) announced a Rs 30,000 crore investment in Zywie Ventures, which sells plant-based supplement brand Oziva, and Nutritionalab, which owns nutritional products under the Wellbeing brand, to enter the health and wellness market.
HUL will acquire 51% of Oziva's equity stake in the first tranche for Rs264 crore, with the remaining 49% acquired at the end of a three-year period based on a pre-agreed valuation, which it did not specify. Furthermore, HUL will purchase a 19.8% equity stake in Wellbeing Nutrition for approximately Rs 70 crore.
"These strategic investments allow us to enter the rapidly growing health and wellness category."
They are strongly aligned with our mission to improve consumers' health and wellbeing and empower people to take charge of their health through trusted solutions," said Sanjiv Mehta, CEO and Managing Director of HUL.
According to reports, HUL is in negotiations to acquire Oziva in its November 8 edition.
Both transactions ae expected to close within the next one to three months, subject to customary closing conditions, according to the company.
The current team of both the brands will continue to operate all functions of the business while HUL will be represented on the board. The transaction also marks the beginning of what could be a wave of consolidation in the direct-to-consumer (D2C) brand market.
Marico, ITC, and even HUL have been investing in D2C brands that gained significant traction during the pandemic, when online shopping saw a significant increase.
In May, Marico acquired a 54% stake in HW Wellness Solutions, which owns the True Elements healthy breakfast and snack brand.
Tata Consumer purchased a 100% stake in Kottaram Agro Foods, the maker of the Soulfull brand of breakfast cereals and millet-based snacks, last year.
While the plant-based food category is still in its infancy in India, it is estimated to be worth around Rs 2,000 crore, with more than 250 startups having entered in recent years, according to the Plant Based Foods Industry Association.
According to market research firm Euromonitor, the Indian nutraceuticals market is currently worth Rs 47,000 crore, with fortified and functional food products accounting for half of the segment, followed by dietary supplements accounting for a quarter of the segment.
Mainstream fast-moving consumer goods companies, primarily in the functional food category, have entered the market.
HUL previously stated that Horlicks would double down on the nutritional and high protein segments, while Marico launched protein shakes under Saffola Fittify a few years ago.
Unilever has made a number of acquisitions in the health and wellness space over the last three years, including Liquid I.V, Nutrafol, a hair wellness brand, Onnit, a holistic wellness and lifestyle company, and supplement firms SmartyPants Vitamins and OLLY Nutrition.