Consumers are cautious, though future outlook is bullish: Dr Oetker MD

Consumers are cautious, though future outlook is bullish: Dr Oetker MD

Consumers continue to be cautious presently which is leading to subdued consumption, though in the mid-term demand outlook is bullish, German packaged foods maker Dr Oetker’s managing director Oliver Mirza said.

“We believe consumption will go up again. But for now, we don’t see full fledged consumption; it is subdued because consumers are still cautious,” Mirza said.

The maker of mayonnaise, spreads and cakes, which announced its second acquisition in India this week, said it grew 21% in the domestic market last calendar year as in-home consumption surged amid the pandemic-led lockdowns. Globally, the company grew 11%.

Dr Oetker has announced the acquisition of bakery start-up Spycy Foods which makes Kuppies desserts, its second buy-out in India after it acquired FunFoods over a decade back for Rs 110 crore. The tuck-in acquisition will augment the company’s growth in the packaged foods segment, Mirza said, but declined to mention the deal size. The acquisition includes the start-up company’s manufacturing base, innovation centre and brand.

Mirza said Dr Oetker has taken up pricing of select packs in response to rising commodity, packaging and fuel costs. While retail inflation eased to 5.3% in August after hitting a high of 6.3% in May, wholesale inflation has remained high in double digits at 11.4%, on the back of commodity and input cost pressures.

Mirza said the company is planning to enter the direct-to-consumer segment for visibility and consumer engagement, though sales from the channel would not be significant.

The India unit is among the Dr Oetker group’s top 20 countries by sales. Mirza said the domestic market has the potential to be among the top 10 countries in a decade.

On the global split within the German group between two units, Mirza said there would be no impact of the India operations. Mid last year, the billionaire Oetker conglomerate’s business verticals which include foods, wine, hotels, chemicals and logistics, split up the businesses into two.

Source link

Add a Comment

Your email address will not be published.