Reliance Declares War Against Unilever, ITC, Nestle: Will Spend Rs 50,000 Cr To Buy FMCG Brands & Dominate Consumer Goods Domain!

Reliance is set to acquire dozens of small grocery and non-food brands as part of its plans to build its own $6.5 billion consumer goods empire.

It wants to give tough competition to foreign giants like Unilever.

Building An Empire

The Mukesh Ambani-led retailer plans to build a portfolio of 50 to 60 grocery, household and personal care brands within six months.

To that end it is hiring an army of distributors to take them to mom-and-pop stores and bigger retail outlets across the nation.

The consumer goods vertical named Reliance Retail Consumer Brands will join the retailer’s brick-and-mortar store network of more than 2,000 grocery outlets and ongoing expansion of “JioMart” e-commerce operations.

Already In Talks To Acquire 30 Brands

India has a nearly $900 billion retail market, one of the world’s biggest.

Reliance is in the final stages of talks with around 30 popular niche local consumer brands to either fully acquire them or form joint venture partnerships for sales.

The total investment outlay isn’t known but a source said that Reliance intends to achieve 500 billion rupees ($6.5 billion) of annual sales from the business within five years.

Other biggies in the market include Nestle, Unilever, PepsiCo and Coca-Cola which have been operating for decades in India.

What It’s Up Against

It is no easy task taking on such well-established firms that also have their own manufacturing units in India and thousands of distributors.

For instance, take Unilever.

Its India unit reported sales of $6.5 billion in the fiscal year ending March 2022, and says that nine out of 10 Indian households use at least one of its brands.

Not to mention the brand value attached to the established names.

Reliance has its work cut out for it- it will have to get the pricing and distribution right.

A Renewed Effort

It did develop a few so-called private labels where it hired contract manufacturers to make cola drinks and noodle packs for sale in its own retail network.

However it hasn’t reaped much, making only 35 billion rupees ($450 million) in annual sales.

Its new consumer goods push targets clinching deals with popular Indian brands.

It is in talks for acquisition or potential joint venture with Sosyo, a soft-drink brand of a near 100-year old Indian company, Hajoori, based in the western state of Gujarat and popular for its flavoured drinks.

LinkedIn Glimpse Into Hiring Efforts

LinkedIn profiles show a glimpse of how Reliance has been slowly building up its efforts to expand its consumer business.

In recent weeks, it has hired senior executives from companies like Danone and Kellogg for quality control and sales.

One LinkedIn job ad by Reliance stated that it had short-listed staples, personal care, beverages, and chocolates as categories for initial launches.

It was hiring mid-level sales managers for the business in more than 100 cities and small towns.

They will be tasked with appointing distributors and managing merchants.