In a notable transformation in the investment landscape, leading private equity (PE) firms are actively scouting across India for regional food brands that not only boast healthy balance sheets but also reveal substantial growth potential. Insights shared with Mint by industry experts indicate that these investment companies are on a quest to uncover the next major player in the food sector, reminiscent of the remarkable success story of Haldirams. Just last month, Haldiram, a renowned snacks manufacturer based in Nagpur, successfully attracted investments from Alpha Wave Global and Temasek Holdings, which propelled its valuation to an astonishing $10 billion.

As noted by Pritha Jha, co-founder of Pioneer Legala law firm specializing in guiding food brands through capital raisingthere has been a noticeable spike in investment activities in cities such as Nashik, Jaipur, and Udaipur. These emerging markets are drawing attention as they harbor a multitude of consumer food brands that are primed for investment opportunities.

Jha emphasized the vast scalability inherent in the snacks category, underscoring the growth potential within this sector. She further pointed out that when the next generation of a family-owned business shows hesitation in continuing the legacy, private equity firms often step in, eager to invest. Many snack brands, with their authentic flavors unique to specific regions, provide a distinct edge that appeals to potential investors seeking differentiation in a competitive marketplace.

Beyond Haldiram's notable achievements, other substantial investments in the consumer food arena have been made recently. For instance, in August 2024, Motilal Oswal made a significant investment of 330 crores in Lal Sweets, a ready-to-eat sweets company based in Bengaluru, acquiring a 25% stake. In a similar vein, Sixth Sense Ventures secured a stake from A91 Partners in Pushp, an Indore-based spice brand, for 100 crores in December 2023. Additionally, Jashvik Capital purchased a minority stake in Jabsons Foods, a snacks manufacturer located in Bharuch, Gujarat, in December 2022.

The enthusiasm surrounding these investments is mirrored in impressive financial statistics. Data compiled by Venture Intelligence reveals that food brands have successfully raised a record-breaking $1.68 billion across 14 investment deals in 2025 so far, which includes the investment into Haldiram. In stark contrast, the entirety of 2024 witnessed a significantly lower total of $507 million raised from 39 transactions, while 2023 saw merely $141 million across 21 deals.

Several elements contribute to this remarkable growth trend. Saurabh Maheshwari, a director at DC Advisory, attributes much of this expansion to the rise of e-commerce and quick commerce, which have fundamentally transformed distribution channels. Many food brands now enjoy substantial cash generation and tend to be profitable, rendering them highly attractive to investors. Maheshwari remarked, "Such deals have become increasingly prominent as investors prioritize unit economics more than ever before." He highlighted that these brands are typically run by founders who have established cost structures that favor profitabilityan appealing proposition for prospective investors.

Furthermore, Anand Ramanathan, a partner at Deloitte India, pointed out that brands capable of achieving significant scale often possess robust business models supported by in-house distribution systems, which foster long-term profitability. This creates high entry barriers for other food brands, Ramanathan explained. This elevated barrier, coupled with the rising popularity of ready-to-cook product segments, makes these brands particularly enticing for investors.

As the market landscape evolves, the opportunities for scaling have become more pronounced, especially with over 100 million households moving into the middle-income bracket in India. Ramanathan noted, "Investors are keenly aware of the untapped potential and recognize that some of these brands could see substantial growth."\

Indias food services market, valued at $80 billion in 2024, is projected to experience a compound annual growth rate (CAGR) of 10-11% through 2030. This growth is predominantly driven by the organized sector, as highlighted in a report published by Redseer Strategy Consultants in January.

However, this trend of private equity firms targeting regional brands for scaling opportunities is not entirely new. Sequoia Capital made an early investment in Prataap Snacks back in 2011, a company it later took public and subsequently sold to Authum Investment and Mahi Madhusudan Kela in 2024. Other notable deals include Lighthouse Funds acquiring a 12.5% stake in Bikaji Foods in 2014, and Advent International's acquisition of DFM Foods, the manufacturer of Crax snacks, in 2019.

Despite the significant potential, numerous brands continue to be primarily regional due to ongoing challenges. For instance, Bikaji Foods has a robust market presence in states such as Rajasthan, Bihar, and Assam, but it encounters market risks as it seeks to expand beyond its traditional territories, contending with competition from local manufacturers and established brands, according to a report from credit rating agency Icra in March 2024. This challenge is compounded by the diverse consumer preferences across various regions, necessitating increased selling expenses to maintain a competitive edge.

Likewise, Prataap Snacks faces formidable competition from other industry players, as highlighted by an Icra report from June 2024. Gopal Snacks, primarily a player in the Gujarati namkeen market, finds itself in direct competition with well-known retailers such as Everest Namkeen and Real Namkeen. Despite management's efforts to broaden its geographic reach, Gopal Snacks continues to generate approximately 70% of its revenue from Gujarat, as reported by credit rating agency Crisil last year.

In related developments, DFM Foods, based in New Delhi, has been grappling with considerable delays in ramping up operations and cash generation, resulting in lower-than-expected revenue and profitability, as per a report from Care Ratings in October.