ITC to acquire D2C brand Yoga Bar

ITC is set to acquire 100% shares of Sproutlife Foods, the parent company of Yoga Bar, over a period of three to four years. The company hopes to strengthen its presence in the healthy foods space with this acquisition.

19 Jan 2023 | By Pooja Mahesh

The conglomerate will initially acquire a 47.5% stake in SFPL

On 17 January, ITC announced the acquisition of Sproutlife Foods (SFPL), which owns the direct-to-consumer (D2C) brand, Yoga Bar. ITC has signed a binding term sheet to acquire 100% shares of SFPL over a period of three to four years. “We look forward to scaling the Yoga Bar brand by offering superior and healthy consumer choices. Within a short span of time, Yoga Bar has established itself as a leading brand in the healthy foods space, driven by impactful market positioning and a range of innovative products,” said Hemant Malik, divisional chief executive of foods division, ITC.

The conglomerate will initially acquire a 47.5% stake in SFPL in tranches March 2025. An “initial investment of Rs 175 crore will be made through primary subscription and secondary purchases for the acquisition of 39.4% of the paid-up share capital, which is expected to be completed by February 15, 2023,” said ITC in a regulatory filing. The purchase of the balance shares would be determined based on pre-agreed valuation criteria and subject to fulfillment of various terms and conditions.

According to ITC, it is fortifying its presence in the Rs 45,000-crore, fast-growing, nutrition-led healthy foods space with the proposed strategic investment in SFPL. The acquisition will enable ITC to augment its future-ready portfolio and enhance its market presence in the Good for You space with products like Farmlite range of biscuits and Aashirvaad multi-grain atta.

Sproutlife Foods manufactures and sells products under the principle of ‘all natural and no artificial ingredients’ for health-conscious consumers through Yoga Bar. This has enabled it to build a market-winning product portfolio including nutrition bars, muesli, oats and cereals. For FY22, it clocked a turnover of Rs 68-crore. Yoga Bar currently has a high salience of online sales with a growing presence in offline stores. In a relatively short span of time, Yoga Bar has established itself as a leader in the bars segment and has built a strong market position in the muesli segment.

Yoga Bar is expected to be rapidly scaled up, leveraging ITC’s enterprise strengths in areas such as sales and distribution, sourcing, product development, and digital. “We believe that this investment is an exciting opportunity that aligns with ITC’s foods business’ aspiration to build a formidable portfolio in the nutrition-led healthy foods space,” said Malik.

This investment is in line with the ‘ITC Next’ strategy that focuses also on building a future-ready portfolio of products that serve evolving consumer needs. “We are confident that this partnership will add to Yoga Bar’s competitive advantage and take it to the next level from the current annualised run rate of over Rs 100-crore,” said Suhasini Sampath Kumar and Anindita Sampath Kumar, co-founders, ITC. The health and wellbeing segment is a fast-evolving category in India and several FMCG companies are entering the space.