In a notable trend within India's investment landscape, leading private equity firms are actively searching for promising regional food brands that boast strong financial health and significant growth potential. Industry experts, speaking to Mint, highlighted that the objective is to uncover the next big player in the sector, akin to the well-known Nagpur-based snacks manufacturer, Haldiram. Recently, Haldiram successfully attracted investments from Alpha Wave Global and Temasek Holdings, which collectively valued the company at an impressive $10 billion.

Pritha Jha, co-founder of Pioneer Legal, a prestigious law firm with a focus on aiding food brands in capital acquisition, pointed out that substantial investment activity is emerging in various cities, including Nashik, Jaipur, and Udaipur. She emphasized that the snack category is particularly ripe for scalability. Jha noted that private equity firms often become more interested in family-owned businesses when the next generation is reluctant to continue the family legacy. Additionally, many regional snack brands offer authentic flavors that resonate with local consumers, setting them apart in a crowded market and increasing their appeal to private equity.

Beyond Haldiram, several other significant investments have taken place in the consumer food sector. For instance, in August 2024, Motilal Oswal invested 330 crore for a 25% stake in Lal Sweets, a ready-to-eat sweets manufacturer based in Bengaluru. Similarly, in December 2023, Sixth Sense Ventures acquired a stake in Indore's spice brand, Pushp, through a 100-crore deal, while Jashvik Capital bought a minority interest in Jabsons Foods, a snacks company from Bharuch, Gujarat, in December 2022.

The growing interest in regional food brands is further illustrated by the remarkable statistics presented by Venture Intelligence. In 2025 alone, food brands have raised an astounding $1.68 billion through 14 deals, a stark contrast to the entirety of 2024, which saw only $507 million raised from 39 transactions, and 2023, which reported a mere $141 million across 21 deals.

Several factors are driving the robust growth of these investments. Saurabh Maheshwari, a director at DC Advisory, noted that the rise of e-commerce and rapid delivery services has revolutionized distribution methods, making it easier for brands to reach consumers. Many of these food brands not only generate substantial cash flow but also operate profitably, which is increasingly appealing to investors.

Such deals have become more common as investors are now focusing heavily on unit economics, Maheshwari explained. He also highlighted that these brands are often established and run by founders who have a solid understanding of cost management and a commitment to profitability, making them attractive to potential investors.

Furthermore, for brands that have dedicated time and resources to achieve significant scale, a robust business model backed by in-house distribution capabilities has allowed them to maintain long-term profitability. Anand Ramanathan, a partner at Deloitte India, remarked that this creates substantial barriers for new entrants into the food market. He also pointed out that segments such as ready-to-cook products are particularly in demand, making these brands even more appealing to investors.

With over 100 million households moving into the middle-income bracket, the opportunity for growth is becoming increasingly apparent. Ramanathan noted, Investors recognize the untapped potential, understanding that many of these brands have the capability to grow significantly. The food services market in India, valued at $80 billion in 2024, is projected to expand at a compound annual growth rate (CAGR) of 10-11% through 2030, with the organized sector playing a pivotal role in this growth, as reported by Redseer Strategy Consultants in January.

However, the journey to scale for regional food brands has not been without its challenges. This is not the first instance of private equity firms seeking to elevate regional brands to national prominence. Sequoia Capital made an early investment in Prataap Snacks in 2011, a company it successfully took public before selling it to Authum Investment and Mahi Madhusudan Kela in 2024. Similarly, Lighthouse Funds acquired a 12.5% stake in Bikaji Foods in 2014, and Advent International took over DFM Foods, the maker of Crax, in 2019.

Yet, many of these brands continue to operate primarily in regional markets due to persistent challenges. For example, while Bikaji Foods enjoys a strong foothold in states like Rajasthan, Bihar, and Assam, its expansion efforts are fraught with risks. A report by the credit rating agency Icra from March 2024 indicated that the company faces stiff competition from local manufacturers and established brands, as well as varying consumer tastes across different regions, which could lead to increased costs in marketing and distribution.

Prataap Snacks faces similar hurdles, as highlighted in a June 2024 Icra report, noting the fierce competition it encounters from rivals in the snack market. Gopal Snacks, which predominantly serves the Gujarati namkeen segment, also confronts direct competition from well-known brands like Everest Namkeen and Balaji Wafers. Despite efforts to broaden their geographic reach, Gopal Snacks still derives around 70% of its revenue from Gujarat, according to a Crisil report from last year.

Meanwhile, DFM Foods, based in New Delhi, has struggled significantly with delays in ramping up operations and generating cash, which has led to revenue and profitability falling short of expectations, as reported by Care Ratings in October.