Major FMCG players including ITC, Britannia, and Emami are competing to acquire a 31% stake in the healthy snacking startup Farmley, valuing the firm at nearly ₹2,000 crore. This move highlights a growing trend among legacy consumer goods companies to acquire established digital-first brands to capture niche market growth. The deal process is being advised by KPMG as these giants look to strengthen their presence in the premium snacking segment.
A intense competition is brewing in the Indian consumer goods sector as legacy FMCG companies look to secure a foothold in the rapidly growing healthy snacking space. Companies including ITC, Britannia, Emami, and Orkla India are reportedly in the race to acquire a stake in the direct-to-consumer (D2C) brand Farmley. While Farmley remains a private entity and is not traded on the stock exchange, the potential acquisition represents a significant shift in how large consumer conglomerates are approaching growth.
The current deal involves a consortium of early-stage investors, including Omnivore Partners, DSG Consumer Partners, and Trifecta Capital, who are looking to exit their combined 31% stake. The process, which is being advised by KPMG, values the startup at approximately ₹2,000 crore. While the initial talks focus on this 31% holding, the final transaction structure could vary, ranging from a minority stake sale to a potential shift in majority control, depending on the eventual bidder and whether the founders, Akash Sharma and Abhishek Agarwal, decide to participate in the divestment.
Strategic Shift for FMCG Giants
For established FMCG giants, acquiring proven brands like Farmley is often a faster route to expansion than building a new product line from scratch. Farmley, which started as a B2B supplier of dry fruits and nuts in 2017, successfully pivoted to a consumer-facing D2C model in 2021. This transition has allowed the company to scale quickly, with reported revenue of ₹396 crore in FY25. The company’s heavy reliance on digital and quick commerce channels makes it a highly attractive target for large companies looking to modernize their distribution and connect with younger, health-conscious urban consumers.
Sector Challenges and Risks
While the deal highlights optimism around the healthy snacking sector, it also comes at a time when the broader FMCG industry faces significant hurdles. Manufacturers are currently dealing with margin pressure driven by the rising costs of raw materials, including palm oil, packaging supplies, and other commodities. Sustaining growth in this environment requires significant capital expenditure. For Farmley, moving from a niche supplier to a mass-market brand involves high competition and the necessity of maintaining profitability while scaling operations. Historical investment-led losses common in high-growth startups are a factor that any acquiring company will likely scrutinize during the due diligence process.
The next important update for market observers will be the conclusion of the preliminary bidding process, which is expected by the end of October 2026. Investors in the publicly traded FMCG giants involved will be tracking whether any final agreement leads to significant capital spending and how it integrates into the existing product portfolios of these companies.