The Indian branch of German Dr Oetker, known for its sauces, mayonnaise and spreads, has acquired Spycy Fast Food Pvt. expand into the rapidly growing packaged cake market.
The company will take over the Kuppies brand from Noida-based Spycy, its 1.5 lakh-per-day manufacturing facility and innovation center, Quint Oliver Mirza, managing director and CEO of Dr. Oetker India, without disclosing financial details. of the operation. The company aims to generate Rs 300 crore in annual sales from the new segment in seven years.
“India remains an exceptionally important market for us. This acquisition will allow us to present Indian consumers with a range of innovative and exciting egg-free offerings that match the taste experience of European cakes, ”said Mirza. “Our foray into this new category is a decision supported by in-depth consumer research. ”
The deal also marks Dr Oetker’s foray into the Rs 2,500 crore market for branded cakes. The category contributes 50% to its global portfolio.
As India lacks a “bakery and self-made culture,” like many other Asian countries, the market potential lies in the ready-to-eat and served cakes segment, according to a global study by Boston Consulting Group. The Covid-19 pandemic and the door-to-door orders that followed, Mirza said, created a strong demand for branded packaged food products like cakes, causing consolidation in the industry.
Over the past three to four years, consumer goods manufacturers like Mondelez India and ITC Ltd., among others, have launched packaged cakes. But Mirza does not consider them as “close peers”. “All Kuppie cakes from Dr. Oetker’s house will have an egg-free recipe with international flavors such as banana and nut cakes, dark and white chocolate chip brownie, peanut butter brownie and brownie. in red velvet. “
Kuppies will be Dr Oetker’s second acquisition in India after FunFoods, the maker of Italian mayonnaise, spreads and sauces. In FY21, the brand generated around Rs 400 crore in annual sales, compared to Rs 13 crore in 2008 when it was acquired. The company, also a condiment supplier to KFC, Subway, Pizza Hut, Domino’s and Burger King in India, is tapping the retail market to cross the 500 crore sales mark by 2022, Mirza said.
And Dr Oetker hopes to replicate his success in the egg-free mayonnaise segment. “Today, 80% of the packaged cake products available on the market contain eggs, which means they cannot be eaten on a given day by those who do not consume non-vegetarian dishes,” Mirza said. “There are certain days, like festivals and pujas, when people can’t devour a brownie just because it contains eggs. We also aim to serve this segment. I expect egg-free cakes to become a powerful growth driver for us.
Currently, Kuppies cakes are available at QSR chains, cafes and restaurants in the Delhi-RCN area. Prior to taking the brand India-wide, the company will focus on deeper penetration in the Delhi-NCR region and northern regions. It will also partner with online retailers BigBasket and Amazon.
Mirza said the prices would be “slightly on the premium side”. There are currently two variations: a 37 gram pack at Rs 15, while the larger 125g will come at Rs 59.