Dips and sauces maker Wingreens Farms has acquired cash-strapped cold-pressed juices startup Raw Pressery at a valuation of Rs 100-110 crore, marking a significant consolidation in the consumer brands sector.
The slump sale of the cold-pressed premium juice business will help Wingreens expand its product portfolio, while it will help Raw Pressery script a turnaround, the company said in an interview to ET Now. According to sources, this is going to be a share swap deal for the investors, with the Raw Pressery founders cashing out. Sequoia Capital is a common investor in both the companies.
The deal is at a huge discount from Raw Pressery’s valuation of Rs 500 crore two years ago when it last raised capital of Rs 65 crore from existing backers. Its investors include Sequoia Capital, Saama Capital, DSG Consumer Partners and Alteria Capital. So far, it has raised Rs 150 crore in funding from these investors.
Founded in 2013 by Anuj Rakyan, Raw Pressery has been looking to contain losses and turnaround the business for more than a year. “Though it (Raw Pressery) is present in a very interesting category and the product offering is also great, the business could not scale up and the company was consistently making losses,” an industry expert had told “You have to make a hard stop somewhere. You have to stop the cash burn.”
During the year ended March 31, 2018, its last annual filing, Raw Pressery reported a loss of Rs 48 crore on a Rs 33 crore revenue.
Globally, shifting consumer tastes are prompting beverages firms to find ways to diversify away from traditional soda and high-calorie juices. Two years ago, Coca-Cola Co. acquired a minority stake in Suja Life, an organic, cold-pressed juices brand, while PepsiCo bought Naked Juice Co more than a decade ago. In India too, the demand for healthier drinks is increasing faster in urban centres, with consumers switching to fruit-based beverages and companies such as Dabur and ITC have launched several variants for fruit juices.
At the same time, a host of consumer startups have seen their pricier and gourmet products such as Greek yogurt brand Epigamia, kombucha maker HappyBooch and Raw Pressery juice fly off shelves as consumers increasingly switch to healthier food choices. However, their segment still remains niche in gourmet and modern retail stores due to its premium price-tag.
Also, unlike packed juices that have shelf lives of up to six months, Raw Pressery’s products have limited shelf life and need chillers in their supply chain.
Raw Pressery that sells soup, nut milk, coconut water, and smoothies has been trying to shed its premium image.
"In the consumer goods segment, anything expensive and niche is very difficult to scale. Even bigger companies such as Dabur or ITC have not attempted such a premium sub-segment within juices and even when they do, it will be mostly through ecommerce to enable manufacturing on the basis of real demand," said Abneesh Roy, senior vice president at Edelweiss Securities.