In a strategic move to foray into the fast-growing packaged cakes segment in India, Dr. Oetker India has decided to acquire Kuppies, along with the manufacturing facility and innovation centre from Noida-based start-up Spycy Fast Food Pvt Ltd.

For the German food major, which had entered India in 2007, this will be the second acquisition after it acquired FunFoods in 2008. The company also hopes to close 2021 with overall sales of about ₹400 crore, recording a double-digit growth. In India, Dr. Oetker has a strong presence in categories such as mayonnaise, spreads and Italian sauces under the FunFoods brand.

Multi-brand strategy

Oliver Mirza, Managing Director & CEO, Indian Subcontinent, Dr. Oetker said, “From a single brand approach, we are now moving towards multi-brand strategy in India, all under the house of the Dr. Oetker brand. Globally, cakes and western desserts is a significant growth pillar for us. With this acquisition, the packaged cakes and western dessert segment will also become a key growth driver for our business in India.”

The company did not reveal the commercials of the acquisition.

With the acquisition of Kuppies, which is an eggless packaged cake and brownies brand, the company hopes to replicate the success it has seen in the eggless mayonnaise segment in India. The packaged cake segment in the country is pegged at about ₹2,500 crore and is growing at double digits rate, with many regional and national brands.

“We aim to make Kuppies a strong retail brand in India with sales of about ₹300 crore over the next 5-7 years. We created the eggless mayonnaise segment in the country which is now witnessing strong double-digit growth. Today, 80 per cent of the packaged cake products available in the market contain egg. With Kuppies, we aim to bring the innovation of eggless packaged cakes and brownies to the segment. I expect the eggless cakes to become a strong lever of growth for us,” Mirza said.

Building brand’s presence

He added that the innovation centre and the manufacturing unit, with a capacity of 1.5 lakh pieces per day, will help the company gain strategic capabilities in the eggless cakes segment.

Kuppies is currently largely sold through the QSR chains, cafes and restaurants in the Delhi-NCR region. Mirza said that the bigger opportunity is in building it as a strong pan-India consumer brand.

The company will initially focus on developing the brand’s presence in the Delhi-NCR and northern region. Over the past two years, the German major has also been piloting ready-to-eat waffles, which it will now expand across the country.

“Despite the challenges due to the pandemic, we hope to end 2021 with sales of about ₹400 crore, up from sales of about ₹340 crore in 2020. Even in 2020, we registered a growth of 21 per cent over 2019 fuelled by the rising in-home consumption,” Mirza added.

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