Driving Consumer Trends Alignment in India’s Food Industry M&A

India’s food industry, valued at over $900 billion, is a vibrant and rapidly evolving sector, encompassing packaged foods, quick-service restaurants (QSRs), beverages, nutraceuticals, and more. As consumer preferences shift toward health-conscious choices, clean-label products, plant-based foods, and premiumisation, strategic mergers and acquisitions (M&A) are critical for companies aiming to capture food market trends. Ensuring consumer trends alignment in food industry M&A is essential for unlocking acquisition benefits, driving strategic growth, and securing sustainable competitive advantage. This article provides senior leaders and decision-makers in India’s food industry with a comprehensive guide to aligning M&A strategies with evolving consumer demands.

Understanding the Role of Consumer Trends Alignment in M&A

1. India’s Food Industry: A Dynamic Landscape

India’s food sector thrives on diversity, fueled by urbanisation, rising incomes, and changing consumer behaviors. Key verticals include packaged foods (snacks, ready-to-eat meals), QSRs, beverages (functional drinks, artisanal teas), and nutraceuticals (vitamins, fortified foods). The rise of e-commerce and direct-to-consumer platforms has amplified growth, making consumer trends alignment a cornerstone of M&A strategy. Consumers increasingly demand health-focused products, such as low-sugar, high-protein, or organic options, alongside plant-based foods, millets, and sustainable packaging. Premiumisation, where consumers seek high-quality or ethically sourced products, further shapes the market. Strategic M&A enables companies to tap into these food market trends, positioning them for long-term success.

2. Recent Developments Shaping Consumer Trends (June 2025)

As of June 2025, India’s food industry is experiencing significant growth in plant-based foods, millets, fortified, and functional food segments. The International Year of Millets and the ₹750 crore AgriSure fund have accelerated demand for millet-based, health-focused products. New FSSAI draft rules tighten labeling norms and curb misleading claims. Post-pandemic, branded goods and platforms like ONDC are seeing rising consumer preference, including in rural India. These shifts underscore the need for consumer trends alignment in M&A to capitalise on emerging opportunities.

3. Key Challenges in Consumer Trends Alignment During M&A

Ensuring consumer trends alignment during food industry M&A presents several challenges:

• Misjudging Evolving Preferences: Overestimating the appeal of legacy brands or failing to anticipate rapid shifts in consumer tastes can derail M&A success. For example, a brand rooted in traditional offerings may struggle to resonate with health-conscious urban consumers.
• Inadequate Due Diligence on Product-Market Fit: Acquirers often overlook rigorous assessments of a target’s alignment with food market trends, such as demand for plant-based foods or clean-label products, focusing solely on financial metrics.
• Regulatory Gaps in Novel Products: Evolving FSSAI regulations for novel foods, functional foods, and health claims pose risks. Non-compliance or misleading claims can impact a target’s portfolio post-acquisition.
• Cultural Misalignment in Innovation Teams: Post-merger integration of product innovation teams can falter due to differing R&D philosophies or misaligned approaches to consumer trends alignment, hindering new product development.

4. Strategic Approach for M&A Strategy

To drive consumer trends alignment in food industry M&A, senior leaders must adopt a structured approach:

• Integrate Deal Planning with Consumer Trend Analysis

Embed consumer trends alignment into the core of deal planning. Identify macro food market trends such as the rise of plant-based foods, health-focused products, or sustainable packaging and seek targets that align with these shifts. Use consumer insights and market research to prioritise acquisitions that accelerate strategic growth in trend-driven segments.

• Evaluate Targets for Alignment with Food Market Trends

Assess potential targets beyond financial metrics. Evaluate their portfolio for consumer trends alignment, focusing on:

1. Strength in plant-based foods, clean-label products, or health-focused offerings (e.g., low-sugar, high-protein).
2. Commitment to sustainable packaging and ethical sourcing.
3. Pipeline for future innovations that address emerging consumer demands.

• Conduct Comprehensive Due Diligence

Validate consumer trends alignment through:

1. Legal Due Diligence: Scrutinise product claims, intellectual property (e.g., novel ingredients), and FSSAI compliance, especially for plant-based foods or health-positioned products. Ensure no regulatory risks, such as mislabeling or consumer complaints.
2. Financial Due Diligence: Analyse revenue streams tied to trend-aligned products (e.g., plant-based foods, functional beverages). Assess growth potential and cost structures for premium or sustainable ingredients.
3. Technology Due Diligence: Evaluate the target’s R&D capabilities, supply chain for niche ingredients, and data analytics to track consumer trends alignment. Ensure production processes support specialised products.

• Build Post-Merger Product Innovation Roadmaps

Develop post-merger roadmaps that leverage combined strengths to innovate in line with consumer trends alignment. Prioritise cross-functional teams to create products addressing unmet needs, such as plant-based foods or millet-based snacks. Align R&D with market shifts to ensure sustained relevance.

Illustrative Examples

• Successful Plant-Based Acquisition

A leading Indian dairy company acquires a niche startup specialising in oat milk and almond yogurt, capitalising on urban demand for plant-based foods. Through rigorous due diligence, the acquirer confirms the startup’s strong brand loyalty, innovative formulations, and efficient supply chain. The acquisition diversifies the dairy company’s portfolio, driving strategic growth and delivering immediate acquisition benefits in a high-growth segment.

• QSR M&A for Regional Taste Adaptation

A national QSR chain acquires a regional player known for localised menu offerings to expand into Tier 2 and Tier 3 cities. The acquisition leverages the target’s understanding of regional taste preferences and sourcing networks, enabling the chain to adapt its menu with local flavors. This ensures consumer trends alignment, enhancing market penetration and acquisition benefits.

Conclusion

For senior leaders in India’s food industry, M&A is a powerful tool for inorganic growth, but its success hinges on consumer trends alignment. By integrating consumer insights into deal planning, evaluating targets for alignment with food market trends, conducting thorough due diligence, and building robust post-merger innovation roadmaps, companies can unlock significant acquisition benefits. This approach ensures M&A drives strategic growth, positions businesses to meet evolving consumer demands, and secures sustainable competitive advantage in a dynamic market.

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