Driving Long-term Value in India’s Food Industry M&A

India’s food industry, a vibrant $900 billion ecosystem including agriculture, powers roughly 10% of the nation’s GDP and employs millions across diverse verticals agri-processing, packaged foods, beverages, quick-service restaurants (QSRs), food delivery, cold chain, and nutraceuticals. For senior leaders and decision-makers, mergers and acquisitions (M&A) present a strategic pathway to unlock long-term value, amplify market presence, and fuel sustainable growth. This article explores the M&A landscape, recent developments, challenges, and a hybrid consulting approach to maximise acquisition benefits, emphasizing long-term value over short-term gains.

The Food Industry Context & M&A Landscape

India’s food sector thrives on its diversity, spanning traditional agri-processing to modern nutraceuticals and digital-first food delivery platforms. Key verticals include:

• Agri-processing: Transforming raw produce into value-added products like spices, oils, and frozen goods.
• Packaged Foods: Dominated by snacks, ready-to-eat meals, and health-focused offerings.
• Beverages: Encompassing traditional drinks, functional beverages, and premium teas/coffees.
• QSRs and Food Delivery: Scaling rapidly with urbanisation and digital adoption.
• Cold Chain: Critical for perishable goods, with rising investments in infrastructure.
• Nutraceuticals: Growing due to consumer demand for health-focused products.

M&A activity is accelerating, driven by consolidation in packaged foods, health-focused snacks, QSR chains, agri-tech, and cold-chain infrastructure. Key drivers include:

• Market Access: Acquiring regional brands to penetrate new geographies.
• Product Diversification: Adding plant-based, millet, or functional food lines.
• Regional Expansion: Scaling QSRs and delivery platforms across Tier-2/3 cities.
• Technology Integration: Leveraging IoT, traceability tech, and D2C platforms.
• Operational Synergies: Streamlining supply chains and reducing costs.

These drivers align M&A strategies with long-term value creation, ensuring deals deliver sustainable acquisition benefits and strategic growth.

1. Recent Developments in Food M&A (June 2025)

As of June 2025, India’s food M&A landscape reflects dynamic shifts:

• Surge in Health-Focused Acquisitions: Post the Production-Linked Incentive (PLI) 2.0 rollout, companies target millet-based, plant-protein, and functional food startups to tap health-conscious consumers.
• Global Private Equity (PE) Interest: PE funds increasingly back regional QSR chains and scalable frozen food brands, prioritising scalability and export potential.
• Regulatory Shifts: The Food Safety and Standards Authority of India (FSSAI) fast-tracks approvals for novel foods, while updated Agricultural and Processed Food Products Export Development Authority (APEDA) guidelines streamline export compliance.

Notable FY25 deals underscore long-term value:

• A leading FMCG player acquired a millet-based snack brand, integrating traceable supply chains and FSSAI-compliant processes to secure market leadership.
• A PE firm consolidated regional QSR outlets, leveraging digital ordering and operational restructuring to boost deal ROI.

These examples highlight how strategic acquisitions prioritise sustainable growth over short-term revenue spikes.

2. Key Challenges in Evaluating Long-term Value

While M&A offers immense potential, missteps in evaluating long-term value can undermine outcomes:

• Hidden Integration Risks: Operational incompatibilities, cultural misalignment, or unexpected regulatory hurdles can erode acquisition benefits.
• Overestimated Deal ROI: Aggressive growth projections often inflate Food M&A valuation, ignoring market volatility or consumer shifts.
• Incomplete Diligence: Overlooking supply chain resilience, ingredient sourcing, or quality standards risks operational disruptions.
• Regulatory Compliance Costs: Underestimating FSSAI, Ministry of Food Processing Industries (MoFPI), or APEDA compliance costs, especially for exports and functional foods, can strain finances.
• Overpaying for Brand Premiums: Acquiring brands without assessing the sustainability of consumer trust or long-term acquisition benefits can lead to value erosion.

Addressing these challenges requires a disciplined, multidisciplinary approach to ensure long-term value creation.

3. Hybrid Consulting Lens: Evaluating Long-term Value in Food M&A

A hybrid consulting approach blending management, finance, legal, and technology expertise ensures M&A delivers lasting value. Here’s how:

• Strategic Growth Alignment

1. Portfolio Fit: Align targets with health-focused, premiumisation, or regional expansion goals. For instance, acquiring a plant-protein brand strengthens health portfolios.
2. Consumer Trends & Synergies: Analyze product-market fit, evolving preferences (e.g., organic, vegan), and cultural alignment to ensure sustainable growth.

• Financial & Deal ROI Evaluation

1. Beyond EBITDA: Assess scalability, input cost volatility, and working capital efficiency. Evaluate customer lifetime value, brand equity retention, and sustainable margins for true long-term value.
2. Food M&A Valuation: Use conservative growth models and stress-test assumptions to avoid overpaying, ensuring robust deal ROI.

• Operational Due Diligence

1. Supply Chain Robustness: Map sourcing reliability, cold chain integration, and technology enablement (e.g., IoT for traceability).
2. Digital Capabilities: Evaluate D2C readiness, smart packaging, and data-driven inventory management to enhance operational efficiency.

• Regulatory & Legal Assessment

1. Compliance Checks: Conduct thorough FSSAI, MoFPI, APEDA, and ESG reviews to mitigate risks.
2. Legal Diligence: Review litigation history, intellectual property ownership, and compliance with labor codes to avoid post-deal surprises.

• Post-Merger Integration (PMI) Readiness

1. Integration Planning: Model timelines for synergy realisation, from supply chain unification to IT system integration.
2. Cultural Onboarding: Build frameworks for workforce alignment and cultural integration to sustain long-term value.

This hybrid approach ensures acquisitions deliver strategic growth, operational efficiency, and sustainable acquisition benefits.

Illustrative Examples of Long-term Value-Focused Acquisitions

• Plant-Based Success Story

A listed FMCG giant acquired a millet-snack startup in FY25. Legal ensured ingredient-level FSSAI compliance, technology enabled blockchain-based traceability, and marketing leveraged regional branding. The result? Market leadership in health-focused snacks, delivering true long-term value through sustainable growth and consumer trust.

• QSR Turnaround Case

A PE-backed QSR chain acquired underperforming regional outlets. Finance restructured operations to optimise costs, legal navigated labor code transitions, and technology introduced digital ordering and AI-driven demand forecasting. This drove significant deal ROI, with enhanced operational efficiency and scalable growth.

These cases demonstrate how a hybrid approach integrating strategy, finance, legal, and technology unlocks long-term value in Food M&A.

Conclusion

In India’s dynamic food sector, achieving sustainable long-term value through M&A demands rigorous, multidisciplinary evaluation. Superficial metrics like short-term revenue or market share fall short without assessing strategic fit, financial resilience, operational robustness, and regulatory compliance. By leveraging hybrid expertise spanning management, finance, legal, and technology leaders can ensure acquisitions deliver lasting acquisition benefits, robust deal ROI, and true strategic growth. Firms like LawCrust, with deep expertise in M&A advisory, empower food industry leaders to navigate this complex landscape, driving sustainable success.

About LawCrust

LawCrust Global Consulting Ltd. delivers cutting-edge Hybrid Consulting Solutions in Management, Finance, Technology, and Legal Consulting to ambitious businesses worldwide. Recognised for our cross-functional expertise and hybrid consulting approach, we empower startups, SMEs, and enterprises to scale efficiently, innovate boldly, and navigate complexity with confidence. Our services span key areas such as Investment Banking, Fundraising, Mergers & Acquisitions, Private Placement, and Debt Restructuring & Transformation, positioning us as a strategic partner for growth and resilience. With an integrated consulting model, fixed-cost engagements, and a virtual delivery framework, we make business transformation accessible, agile, and impactful.

For expert legal help, please contact us:

• Email: inquiry@lawcrustbusiness.com