BackLegacy FMCG firms step up investment in new-age brands
Wipro Consumer Care Ventures on Monday announced investment in consumer healthcare brand Onelife brandAnalysts said more traditional FMCG firms could directly or through investment arms accelerate investments in emerging consumer themes
PremiumWipro Consumer Care Ventures—the venture capital arm of Wipro Consumer Care & Lighting—on Monday announced investment in consumer healthcare brand Onelife brand that sells health and nutrition products, signalling a growing interest from legacy consumer companies in stepping up investments in brands and categories beyond their traditional businesses. Early February, Tata Consumer Products Ltd said it is acquiring 100% stake in Kottaram Agro Foods which makes Soulfull brand of breakfast cereals and millet-based snacks. Last month, consumer goods firm Reckitt Benckiser (RB) led a ₹45 crore funding round in Visage Lines Personal Care Pvt. Ltd, which owns the grooming brand Bombay Shaving Co (BSC).
Set up in 2019 with a corpus of ₹200 crore, Wipro Consumer Care Ventures focuses on investment categories such as hygiene, immunity building, and grooming products. Its earlier investments include LetsShave and Ustraa. Investment size per deal is typically between $2 million to $6 million.
To be sure, the move points to fresh investment appetite from legacy consumer goods companies that want to participate in the new evolving consumer trends and brands, especially as covid accelerates adoption of such products.
Wipro did not divulge investment details but said Onelife will use the funds for its next leg of growth. Onelife sells products in the wellness, immunity, and overall nutraceutical segment such as health supplements and vitamins. It was set up in 2019 Gaurav Aggarwal.
As covid 19 infection spread, such products found favour with consumers who stocked up on immunity-building and nutrition products. Sales of multi-vitamins too was up significantly in 2020.
"Health and immunity are on top of every consumer's mind today. They are increasingly getting conscious of the benefits of preventive health too," said Sumit Keshan, Managing Partner, Wipro Consumer Care—Venture.
More recently, ITC Ltd., L’oreal and Premji Invest participated in early-stage venture capital firm Fireside Ventures’ second fund raise. Fireside Ventures closed it second fund at ₹863 crore. Its earlier fund had Mariwala Family Office, Unilever Ventures, Emami Ltd., RP-Sanjiv Goenka Family Office as investors.
Fireside will invest in 15-20 consumer-facing start-ups while continuing to keep its focus on digital-first brands from the second fund.
Among its earlier investments are brands like Slurrp Farm, boat and Mamaearth among others.
Analysts said more traditional FMCG firms could directly or through investment arms accelerate investments in emerging consumer themes.
“The whole paradigm of building brands, especially with digital-first ones using the online channels, is disrupting or reimagining some of the requirements for brand building. That itself has gotten accelerated from last year because of covid and the whole move of lot of consumers shifting to online buying," said Kanwaljit Singh, Founder & Managing Partner Fireside Ventures.
Such investments give investors a chance to view the emerging consumer ecosystem, said Singh.
“Large corporates who are working with us, their whole motivation was that they were seeing a lot of exciting new brands being built and using different strategies, different channels, and they wanted to stay connected with this ecosystem and understand what were the learnings and trends," he said.
Large companies have spent years building their equity on brand and distribution, said Shantanu Deshpande, founder and chief executive officer of Visage Lines which raised ₹45 crore from RB. This is now shifting as consumers spend more time online.
“I think large companies are looking at agile, internet first-companies…they feel we know how to build stuff online and that is going to be the future of media marketing. So rather than building these capabilities themselves, they say let us kind of get a foot in the door and understand how you guys do it," said Deshpande.
Marico said it could build more digital-first brands over the next three years after it acquired male grooming brand Beardo. “We have a separate business unit which we have created to handle digital brands which operates completely independently of Marico in terms of processes and systems. And we believe that either organically or inorganically—we should be able to replicate and have two-three more Beardos in place in the next two, three years," Saugata Gupta, MD and CEO at the company said during a post-earnings call last month.
Unilever Ventures, the investment arm of consumer goods major Unilever, has in the past invested in Milkbasket and skin care brand Plum.
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