Hindustan Unilever to acquire stake in Oziva and Wellbeing Nutrition

Hindustan Unilever (HUL) said it is investing in Zywie Ventures which sells plant-based supplement brand Oziva and Nutritionalab which owns nutritional products under Wellbeing to enter the health and wellness market worth Rs 30,000 crore.

HUL will acquire 51% equity stake in Oziva for Rs264 crore in the first tranche while the balance 49% will be acquired at the end of three year period based on pre-agreed valuation, which it did not specify. In addition, HUL will buy 19.8% equity stake in Wellbeing Nutrition for about Rs 70 crore.

“These strategic investments give us an entry into the fast-growing health & wellbeing category. They align strongly with our mission to improve the health and wellbeing of consumers and empower people to take charge of their health through solutions that they can trust,” Sanjiv Mehta, CEO and Managing Director, HUL said.

ET first reported HUL are in talks to buy Oziva in its 8 November edition.

Both these transactions are expected to be completed in the next one to three months, subject to customary closing conditions, it said.

The current team of both the brands will continue to operate all functions of the business while HUL will be represented on the board.

The deal also signals the start of what could trigger a wave of consolidation in the direct-to-consumer (D2C) brand market.

Marico, ITC, and even HUL, have been investing in D2C brands that gained huge momentum during the pandemic when online shopping saw a major uptick. Marico picked up a 54% stake in HW Wellness Solutions, which owns healthy breakfast and snacks brand True Elements in May.

Last year, Tata Consumer acquired a 100% stake in Kottaram Agro Foods—the maker of Soulfull brand of breakfast cereals and millet-based snacks.

While the plant-based food category is a nascent segment in India and estimated to be about Rs 2,000 crore strong where more than 250 startups have entered over the past few years, according to Plant Based Foods Industry Association.

According to market research firm Euromonitor, the Indian nutraceuticals market is currently worth Rs 47,000 crore with half the segment dominated by fortified and functional food products followed by dietary supplements which account for a quarter of the segment.

Mainstream fast-moving consumer goods companies have entered the market, mostly in the functional food category. HUL had said it could double down on the nutritional and high protein segments through Horlicks, while Marico launched protein shakes under Saffola Fittify a few years ago.

Over the past three years, globally Unilever has closed a spate of acquisitions in the health and wellness space including Liquid I.V, Nutrafol, a hair wellness brand, Onnit, a holistic wellness and lifestyle company, supplement firms SmartyPants Vitamins and OLLY Nutrition.