FMCG Giants Acquire D2C Wellness and Beauty Brands
Major FMCG companies including HUL, Marico, and Dabur are acquiring direct-to-consumer (D2C) brands in the nutrition and beauty sectors. These deals, some exceeding $100 million, are aimed at gaining scale in the wellness category and expanding regional market presence by integrating digital-native brands into their offline distribution networks.
- Hindustan Unilever (HUL) has been particularly active, acquiring a 51% stake in OZiva and a 19.8% stake in Wellbeing Nutrition for a combined ₹334 crore to enter the wellness market. It is also reportedly in advanced talks to acquire skincare brand Minimalist in a deal valued at approximately Rs 3,000 crore. - Marico's "string of pearls" strategy involves acquiring multiple digital-first brands, including men's grooming brand Beardo, plant-based nutrition brands Plix and True Elements, and ayurvedic beauty brand Just Herbs. Its latest move was a ₹226 crore investment for a 60% stake in wellness startup Cosmix. - The trend extends beyond the companies in the headline, with ITC acquiring brands like Yoga Bar and Mother Sparsh, and Tata Consumer Products acquiring health and wellness brand Organic India. - A primary driver for these acquisitions is the significant growth gap; D2C brands have shown a compound annual growth rate of around 40%, while established FMCG players have grown at about 9% in recent years. - Beyond expanding their product portfolios, these acquisitions provide incumbents with direct access to first-party consumer data and insights into purchasing behavior, which is difficult to obtain through traditional retail channels. - According to a CRISIL Ratings analysis, approximately two-thirds of all acquisitions by FMCG companies over the past five fiscal years have been in the D2C space, with around 60% of those deals focused on the personal care sector. - Instead of direct acquisitions alone, some are creating dedicated investment arms. Dabur, for instance, launched Dabur Ventures, a platform with a ₹500 crore allocation to invest in digital-first businesses in personal care, wellness, and healthcare. - For the D2C brands, these deals address major challenges of scalability and profitability. Prior to acquisition, less than 15% of D2C companies manage to surpass ₹250 crore in revenue, and only a third report operating profits.
