India consumption story: L Catterton targets healthy snacking and branded foods, says Sanjiv Mehta

Private equity firm L Catterton said it stayed positive on India’s long-term consumption outlook. Executive Chairman Sanjiv Mehta said the firm was scanning for deals in healthy snacking and branded foods. Mehta said changing tastes were shaping new opportunities in packaged food and nutrition across India.

Representative image

L Catterton said it was running its first dedicated India fund. The Greenwich, Connecticut-based firm said it had closed three investments in the past year. These were foods and agri-commerce platform Farmley, ethnic snacks company Haldiram, and single-speciality hospital chain Healing Hands Clinic.

L Catterton India fund targets healthy snacking and branded foods

Mehta said L Catterton globally managed consumer-focused investments worth about USD 40 billion. "In India, for the first time, we are raising an India fund,\" Mehta told. Mehta said the fund tried to spot category shifts early. Mehta also pointed to moves from unprocessed to processed food.

Mehta said the fund also watched the shift from unbranded to branded products. Mehta described these intersections as the fund’s strongest areas for deals. Mehta said category momentum alone was not enough. Mehta said backing the right founder stayed central to each investment choice.

Mehta said the firm assessed promoters for passion and values. Mehta added that LVMH-backed investment funds aimed to support founders beyond growth plans. \"We help them transition from a hustle enterprise to the making of an institution. So earlier, I used to focus on creating value for one big company. Now, I am going to help create value with passionate founders in many companies,\" said Mehta.

Healthy snacking India shifts as packaged foods rise

Answering a question on food categories, Mehta said healthy snacking stood out. Mehta said consumers were moving due to health and wellness concerns. Mehta linked this shift to a wider change in eating habits. Mehta also said India needed stronger food science and research investment.

\"We are standing at the threshold of a new era. I would call it the great Indian snacking renaissance,\" Mehta said. Mehta said the older model of cheap, deep-fried, high-sodium snacks was fading. Mehta described the moment as a chance to build healthy snacking brands with global appeal.

Mehta said India’s urban life was changing meal routines. Mehta said nuclear families and dual-income homes were breaking fixed meal patterns. Mehta said snacking was filling gaps left by fewer sit-down meals. Mehta said this change was sharper in cities and large towns.

Mehta said packaged foods were only 15 per cent of India’s total food consumption. Mehta compared this with 60-70 per cent in developed markets. Mehta said the share in India was likely to double over the next decade. Mehta said this supported strong growth for packaged goods.

\"The snack is the meal. We are seeing the rise of micro meals ready to eat, portable nutrition that can fit into a laptop bag or a car cup holder. This brings us to the future of packaged goods,\" he said, adding, \"Freshly cooked hot food was always the gold standard, but convenience has broken that value. The packaged goods industry in India is projected to double over the next decade, registering phenomenal double-digit growth.\"

FMCG India outlook tied to consumption economy growth

At the Indian Healthy Snacking Summit, Mehta spoke about broader FMCG conditions. \"India is a consumption economy. FMCG is a very attractive market. There is no global consumer goods company.\" Mehta said global strategies increasingly included India due to its scale and demand growth.

Mehta said near-term FMCG pressures did not change the long runway. \"Nothing in life moves in a linear fashion, and it has a long runway for growth.\" Mehta said spending power differed across households. \"55 per cent of the country is still what I would call as featuring below the middle class.\"

\"So their ability to spend on a similar kind of volume comes down. So they titrate the volume,\" he said, adding, \"India will keep growing. FMCG will keep growing.\" Mehta said the market size still drew attention. Mehta said companies were planning for multi-year demand expansion.

Mehta said India should aim to move up the value chain in food exports. Mehta said the country could shift from exporting raw spices, tea and rice. Mehta said the goal was to create intellectual property and global brands. Mehta cited makhana, ragi and jowar as potential ingredients.

Mehta said India’s consumption story was supported by rising incomes, urbanisation and a young population. Mehta said the coming years could lift demand across foods and daily-use goods. \"There is no global consumer goods company in whose strategy India will not feature. In the next 14-15 years, the delta consumption will be over USD 7 trillion. Thats a very attractive market,\" said Mehta.

With inputs from PTI