March 2, 2021
Modern Foods, which owns bread and bakery brand ‘Modern’ bread is acquired in Mexico’s Grupo Bimbo.
Grupo Bimbo, the world’s largest baking company, operates in 33 countries, including India, and has a portfolio of over 13,000 products and more than 100 brands.
Singapore-based private equity firm Everstone Capital has sold Modern Foods to Mexico’s Grupo Bimbo and its Indian subsidiary Ready Roti India.
In 2016 Everstone, through its bread and bakery platform Ever foods Asia bought Modern from Hindustan Unilever (HUL) and relaunched it in 2017.
Modern Foods, established in 1965, was the company to sell branded bread in the country and then became the first PSU to be sold under the government’s disinvestment programme. In 2000, HUL (the erstwhile Hindustan Lever) had acquired the government’s 74% stake for Rs. 105 crores. The objective behind this acquisition was to bolster its food portfolio.
After three years, this was followed by HUL acquiring the balance government stake for Rs. 44 crores. With 14 production units across the country then, Modern was a popular brand. Bread, a low-entry product, did face its own share of competition from healthier options on the breakfast table.
Nevertheless, even after HUL invested in the business and enhanced its market value and productivity, the bread company did not fit its food portfolio growth strategy. HUL then decided to sell the business in 2015.
When Everstone acquired the brand from HUL, it reportedly had a turnover of around Rs. 250 crore. It was acquired at the same price as the turnover, according to reports. On acquiring Modern, Everstone had set an audacious target of quadrupling its turnover to Rs. 1,000 crore.