Sixth Sense Ventures, an investment firm that has backed startups like Bira91 and Vahdam Teas, has invested Rs 100 crore in the Indore-based spices brand Pushp.
The investment comes from fund SSIO-III and marks a substantial move in the spices sector, which has been witnessing a lot of mergers and acquisitions (M&A) action recently.
Pushp's market expansion and growth
Founded by Mahendra and Surendra Surana, Pushp has established itself as a leading brand in Central India. The company has expanded its reach from Madhya Pradesh to other states, including Maharashtra, Rajasthan, Uttar Pradesh, Bihar, and Gujarat.
The company claims to have recorded a 25% compound annual growth rate (CAGR) over the past five years. It now aims to evolve from a regional brand to a national brand.
The shift in consumer preferences
Nikhil Vora, Founder of Sixth Sense Ventures, in a LinkedIn post, said, the growing consumer preference for packaged, branded spices over loose, unbranded alternatives.
He emphasized Pushp's strategic position to capitalize on this shift, citing its seasoned management team, optimal procurement, state-of-the-art manufacturing, and robust distribution network. Vora also noted the evolution of spices from loose to packaged to blended, offering a pricing premium.
The spices market dynamics
The overall spices market is estimated at Rs 90,000 crore, with the organized and branded segment expected to grow to Rs 50,000 crore by 2025 at a 16% CAGR. The blended spices segment, which offers higher margins, is growing at a 25% CAGR. This growth caters to the new-age cooking and the increasing need for convenience.
Sixth Sense Ventures sees this as an opportunity for regional brands like Pushp to expand nationally, especially with the minimal presence of multinational corporations (MNCs) in this segment.
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