In a latest update, Reliance is all set to rival FMCG food businesses of ITC with the launch of Tata Consumer Products Ltd and Adani Wilmar brand ‘Independence’ for staples, processed foods, beverages and other daily essentials, according to the analysts.
Launch Of Brand Independence
The newly set up FMCG arm of Reliance Retail Ventures Ltd (RRVL),Reliance Consumer Products Ltd (RCPL) last week made a foray into staples with the launch of brand Independence.
This is in line with the announcement Ambani had made at the company’s annual shareholder meeting earlier this year.
Here mentioned, RRVL is a wholly-owned subsidiary of Reliance Industries Ltd (RIL).
So far, the launch is only in Gujarat, possibly on a pilot testing basis, and indicated that products would be affordably priced.
Further, this will be rolled out nationally post development of the brand.
Competing With Big Players
It plans to “compete with Adani Wilmar in edible oil, grains and pulses; Patanjali Foods in biscuits, edible oil, packaged atta; Parle and Britannia in biscuits; Tata Consumer in pulses, packaged water; and ITC in packaged atta, biscuits,” said brokerage Nomura.
Presently, the independent line of products are available on the Jio Mart app and Reliance retail stores.
It further plans the distribution to be extended to FMCG retailers (kirana stores), in coming months.
It will have products belonging to the categories like biscuits, packaged water, edible oil, packaged atta (wheat flour), besan (gram flour), pulses, grains and sugar.
According to Nomura, “RCPL is a newly-incorporated company despite RRVL already having a range of private-label brands which are sold across its 2,460 brick and mortar grocery stores and the Jio Mart app which reaches 2 million merchant partners/kirana stores across 260 cities,”.
“We note it also incorporated another company (Reliance Beauty and Personal Care Ltd) on November 28, 2022. We believe RIL is incubating newer separate companies with the idea of listing them over the medium term and unlocking value,” Nomura added.
RRVL had also acquired soft drink brands Campa Cola and Sosyo during August 2022.
Nomura noted, “By creating a new company, despite having private-label brands under RRVL, we see it as a first of many steps for Reliance to participate fully into the staples/FMCG space outside its own distribution network,”.
Further adding, “However, the actual distribution reach of Independence brand into kirana stores, acceptance from consumers, its product price points/addressable market, and product innovation will be key before concluding Reliance’s foray will be a headwind for FMCG companies.”
Basically the entry of another large player in
staples/packaged foods will aid and accelerate conversion from unbranded to branded products, thus benefiting and growing the staples/packaged foods categories as a whole.
