The knives are out! Ambani, Adani to battle for your kitchen, shelf space

Two of the richest Indians - Mukesh Ambani and his fellow multibillionaire Gautam Adani - are set for an epic fight in the country’s vast consumer goods market. While the two have been in the race for the top spot on the rich list for long, this is the first time that their paths are going to cross in the field of business development.

With the launch of its fast-moving consumer goods (FMCG) brand Independence, Ambani’s Reliance has ventured into the space where Adani’s consumer facing entity Adani Wilmar (AWL) is aggressively betting on. From wheat flour, crystalline sugar, besan and toor dal to branded rice, biscuits and packaged drinking water - Reliance’s move encompasses nearly all key F&B categories. But given the composition of its recently introduced portfolio, analysts believe its fight will be more intense with AWL, apart from another business giant - the Tata Group.

While AWL has been the largest packaged edible oil player for several years now, Ambani’s Reliance has targeted that space too.  Apart from branded cereals and pulses, Reliance Consumer Products (RCPL) has launched multiple edible oil products, including groundnut oil and sunflower oil. AWL holds nearly a fifth (19.5 per cent market share as of September) of the Rs 200,000 crore branded edible oil market in India.

What makes the battle more intense is Adani’s recent moves in the packaged kitchen commodities space. The long-standing market leader in the edible oil category, has rapidly expanded its presence in the branded rice, wheat flour and sugar. To capture greater shelf space, the firm has been growing its retail reach. As per analysis by Ventura Securities, AWL's food & FMCG business is expected to grow at over 31 per cent CAGR to touch Rs 4,340 crore yearly revenue by 2025, compared to 12.2 per cent growth for industry essential and 14.3 per cent for edible oils.

“We have been concentrating on developing our foods basket. The aim is to be very strong in basic/essential staples that are consumed daily. After we champion this first stage, then comes the value-added portfolio,” Angshu Mallick, Chief Executive Officer and Managing Director of AWL told Business Today earlier.

According to KR Choksey, AWL’s efforts seem to be paying off. In July-September quarter, its share in the branded wheat flour market improved to 4.9 per cent and in basmati rice market share jumped to 10 per cent - helped by its acquisition of Kohinoor brand.

“An interesting battle between Adani vs Reliance vs Tata seems brewing up slowly,” said Abneesh Roy, executive director-institutional equities, Nuvama Wealth Management. While the three largest business groups of the country are now in a fierce battle for the kitchen shelf space in Indian households, the smaller and regional players could be the casualty, he added.

What makes the battle unique is like Adani, Ambani and Tatas are increasingly focusing on the kitchen commodities market and have been preparing for rapid expansion for the past few years. The Reliance Group set its house in order by elevating Isha Ambani to lead the FMCG and retail business, began expansion of its FMCG distribution business and started building warehousing capacities and supply chain efficiency, before entering the battle field.

According to Ambani, while Reliance Retail (which owns the group’s FMCG arm RCPL) is already the largest player in the modern retail and digital platforms, the company has set a target of increasing its reach in the hinterlands that remains under-served. “In this endeavour, our strategy is to integrate with millions of small merchants…the aim is to bring them to become an integral part of the widest distribution portfolio across the country so that they can provide the same choices to their customer that are available in big cities,” he said during the annual general meeting of Reliance Industries. Couples with measures in improving supply chain efficiencies and reduction in wastages, will also allow it to offer products at competitive prices.

Gautam Adani, who now firmly folds the third spot in the global rich list with $125 billion net worth, whizzed past Ambani earlier in 2022. Ambani has been a long-standing top billionaire in the global rich list and now holds the ninth spot in the Bloomberg Billionaire Index with his US$ 88.2 billion net worth. That, however, is just half the story so far.
 

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