Indian consumer packaged goods (CPG) company Dabur India Limited acquired a 51% equity stake in Badshah Masala Private Limited, a leading domestic producer, marketer, and exporter of powdered spices and seasonings, in January 2023. With this deal worth INR5,875.2 million ($71.2 million), Dabur India gains a foothold in the $1.5 billion^* Indian packaged herbs, spices & seasonings market, while Badshah Masala will be able to expand the domestic and export base for its spices, according to GlobalData, a leading data and analytics company.

Bobby Verghese, Consumer Analyst at GlobalData, comments: “Owing to the extensive use of spices in local cuisine, India is the world’s largest consumer and one of the largest producers of herbs, spices, and seasonings. Indians traditionally purchase fresh spices and seasonings in loose form from open markets and local spice shops and grind them at home or local mills. However, the demand for packaged spices and seasonings products is surging, catalyzed by rapid urbanization, booming organized retail sector, and new product launches in convenient formats, supported by intense marketing campaigns.”

Despite this, domestic sales of unpackaged spices and seasonings eclipse that of packaged variants. This untapped unorganized market is attracting more local and multinational companies, including domestic CPG heavyweights, Tata Consumer Products with its Tata Sampann brand, and ITC, with its Aashirvaad brand. Additionally, the overseas demand for powdered Indian spices, such as turmeric, and value-added extracts such as curcumin, has surged in light of the pandemic.

Badshah Masala’s portfolio of ground and blended spices and seasonings complements Dabur India’s CPG and Ayurvedic healthcare product line. Through the acquisition, Dabur India is diversifying its market-leading food and beverage portfolio into adjacent CPG sectors.

The packaged Indian herbs, spices & seasonings market is highly competitive with a plethora of domestic brands and private labels competing for retail shelf space. Companies targeting the cost-sensitive mass retail market, compete on price. At the same time, in light of media reports on adulterated spices, demand is on the rise for authentic and quality powdered spices and seasonings among higher-income urban households.

Verghese concludes: “Badshah Masala will have to strike a fine balance between quality and price to tap both ends of the spectrum. The 65-year-old spices company will be able to rapidly scale up its local product distribution and export base by piggybacking on Dabur India’s larger distribution network, spanning rural and urban India and overseas markets. Additionally, Dabur India’s strong brand name and trust will aid Badshah Masala in taking on local market leaders, such as Everest Food Products and MTR Foods. Moreover, their shared R&D capabilities can accelerate product innovation.”

* GlobalData Consumer Intelligence Center ­– Market Analyzers, accessed in January 2023