As India’s consumer preferences shift toward wellness and naturals, Dabur India Ltd is deploying fresh capital to stay ahead of the curve. The 140-year-old fast moving consumer goods (FMCG) major has set up a ₹500-crore venture investment platform to back fast-growing, digital-first brands in natural health, beauty and home care. Through Dabur Ventures, the company will make minority investments of ₹25-75 crore in start-ups that align with its ayurveda- and naturals-led strategy, said Abhinav Dhall, group head of corporate strategy and executive director at Dabur India.
The push, mirroring a broader industry trend as legacy players track shifting preferences and court younger shoppers, gives Dabur both a window into emerging trends and a pipeline of potential acquisitions. The capital will be funded entirely by Dabur’s balance sheet.
“The mandate here is very different. From the balance sheet of Dabur, we will do FMCG-oriented investments that fit with Dabur’s long-term vision of ayurveda and naturals," Dhall said in an interview with Mint. "Today, we have to be relevant to the newer, emerging consumer that needs to experience our brands at a younger age. We have to expose ourselves to newer bets, and therefore, get in a bit early on into companies. If we find something promising, we also want to eventually acquire such companies.”
Wider industry trend
Legacy fast-moving consumer goods companies are increasingly investing in new-age brands to understand evolving consumer preferences.
Wipro Consumer Care Ventures, the venture capital arm of Wipro Consumer Care & Lighting, raised a second fund of ₹250 crore earlier this year and plans three to four new investments each year. Its portfolio includes snacking brand Let’s Try and bakery brand The Baker’s Dozen.
Marico Ltd has also been expanding its portfolio beyond its core categories of edible oils and personal care. The company’s food portfolio includes Saffola Oats and Parachute oil, apart from more recently-acquired brands such as Beardo, Just Herbs and Plix.
As for Dabur, it has a war chest of ₹6,500 crore earmarked for acquisitions. In FY25, the company had reported a 1.2% rise in consolidated revenue at ₹12,563 crore, while profit declined 4% to ₹1,768 crore.
Dabur has a two-pronged merger and acquisitions strategy. It will continue to pursue M&A for its core FMCG business with investments in high-margin, regional firms, such as its earlier investments in Badshah spices and Sesa hair oil.
The venture arm will invest in early-stage companies and Dabur may consider acquiring these companies if it merits.
“We were looking at two types of investments. One is classic Ebitda-generating companies that are steady, and can fill some white spaces for us in the traditional world. There, it doesn't make sense to take any minority stakes, those we want to control and bring efficiency into," Dhall said. "In the newer age category, there is risk and there is a very wide space of companies out there.”
Last year, Dabur announced acquisition of 51% stake in Sesa, a brand in the Ayurvedic hair-care segment for ₹12.6 crore. In 2022, it had acquired a 51% stake in spice brand Badshah for ₹587.52 crore.
Dabur is not bound by a fixed deployment or exit timeline and because the investments come directly from the balance sheet, there’s no defined time period, Dhall said.
Dabur Ventures will target minority stakes, typically below 20%, but Dhall ruled out very small investments. “Our investment will be minority stakes to start with (below 20% is probably good enough). The ticket sizes are going to be in the range of ₹25-75 crore. These can be companies that are ₹30-50 crore in revenue all the way up to a couple of hundred crores. We will probably not do seed investments; those will be too early unless somebody comes in with a very special IP,” he said.
The fund will back ventures across personal care, health care, wellness foods, beverages and Ayurveda.
“Generally, as an overarching theme, we will look for some connect with Dabur’s long-term vision. We call it ayurveda but we also broaden it to say ‘naturals’. Within that, we have three verticals: healthcare, home and personal care, and food and beverages," Dhall said. "We want to look for new emerging trends within these. For example, in F&B it can be health drinks or health foods. One very big segment is beauty and personal care where we are seeing lots of action. On the healthcare side, we’re finding interesting innovations like effervescent tablets… gummies… new dosage forms.”