Following the announcement on 16 January 2019 that French food giant Danone’s venture arm Danone Manifesto Ventures, along with other existing investors, has invested $25.6m in India-based Drums Food International, the parent company of premium yogurt maker Epigamia,
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, a leading data and analytics company, offers her view on the Series C round of financing:
“India is the world’s largest producer and consumer of milk, as dairy activities form an essential part of the rural economy. The funding marks a growing investor preference for startups, which are capitalizing on the consumers’ shift to on-the-go and healthier options. The investment seems a great fit for both players.
“Drums Food, which sells premium Greek yogurt under the Epigamia brand, is gaining popularity among urban Indian consumers looking for healthy food options. Its products are currently available on e-commerce platforms like BigBasket and Amazon and have a retail touch point of around 10,000 stores. The company can rely on Danone’s expertise in the dairy business to expand its product portfolio and launch plant-based beverages. It can strengthen Epigamia’s dealer network and widen its reach to 50,000 retail points in the coming years.
“On the other hand, for Danone this is a promising opportunity to partner with a local brand and re-position itself in the sector it left last year. The company was not quite successful in India mainly due to its global approach and dependence on capital-intensive strategies to increase sales. In January 2018, unable to compete with national giants such as Amul and Mother Diary, Danone pulled the plug on dairy operations in India to focus on nutrition business.
“Danone can bank on the Epigamia investment to expand the range of fresh contemporary products with unique value propositions like high protein, lactose-free and probiotics. This allows it to retain its presence in the Indian market and lay the path of its revival in future. The French company plans to invest in 20-25 firms, which are focused on sustainability and healthfulness, by 2020. Epigamia investment indicates the first such Asia-focused funding. Therefore, it will be interesting to see how this funding will create a growing investor interest in companies offering premium health food products in India.”