Kishore Biyani to consolidate Food Business

MUMBAI: Pantaloon Retail, the nation’s largest retailer, plans to spin off at least five of its brands and merge them with Capital Foods, as

Kishore Biyani looks to consolidate the foods businesses under one company to get ahead of global giants Nestle and Kraft with his home-grown recipes’ such as pav bhaji masala and lemon pickles.



Mr Biyani, who revolutionised organised retail in India, will have Indian television’s most popular culinary showman, identified with the Khana Khazana brand, Sanjeev Kapoor, as a venture partner. Capital Foods is owned by Future Ventures and other investors.



Dairy products brand Fresh & Pure, Tasty Treat cereals, Golden Harvest spices, Ektaa and Punya edible oils will be merged with Capital Foods, leading to Pantaloon shareholders getting a yet-to-be decided stake in the company, said a person privy to the development, who did not want to be identified before an official announcement. Mr Biyani declined to comment on the development, but said: “We are working on creating a large foods entity which will capture the foods consumption story in India.”



Global food companies such as Nestle, Kraft and Unilever are investing heavily to capture a share of India’s food industry which is estimated to grow to $300 billion by 2015 from $200 billion in 2006-7, according to consultancy Technopak.



Norway’s Orkla had bought a controlling stake in the popular MTR Foods, which sells ready-to-eat pongal and upma, for about $100 million in 2007. Investors are grabbing the stocks in the sector, with Jubilant FoodWorks, franchise to Domino’s pizza in India, gaining 58% on its debut on Monday, valuing it at nearly half the US parent.



“Higher investments in brand building and moving the home-grown brands into Capital Foods will help the company scale up the foods business over a period of time,” said Abhijeet Kundu, vice-president, research, at Antique Stock Broking. “Pantaloon Retail is more likely to do well in foods business given its understanding of the Indian consumer.”



Future Ventures, the private equity unit of Mr Biyani, holds 33% of Capital Foods. While Mr Kapoor owns 10%, the rest is held by Ajay Gupta, the founder of the company which owns brands such as Ching’s Secret, Smith & Jones, Mama Maria, Raji and Kaeng Thai.

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