Everstone Capital sells Modern Foods to world's largest baking company Grupo Bimbo

Modern Foods

Everstone Capital February 24 announced that its bread and bakery platform Everfoods Asia, has sold Modern Food Enterprises to Mexico’s Grupo Bimbo and its Indian subsidiary Ready Roti India. Modern Foods is the first Indian public sector undertaking (PSU) to be privatised and has changed hands for the third time.

Moneycontrol was the first to report the plans of Everstone Capital to divest Modern Foods on June 6, 2020.

Everstone Capital acquired Modern from Hindustan Unilever Limited In April 2016 and relaunched the iconic bread brand in June 2017 nationwide.

“The relaunch was crafted with intensive efforts and significant investments in manufacturing, research & development at Modern’s innovation hub in Chennai, coupled with thorough work on consumer insights, strategy and design,” the official announcement said.

“Under Everstone, Modern has built a strong leadership position in every market it operates through a distribution network which covers 80,000+ retailers across the country, expanded the brand from bread to a baked good company with multiple new products and operates seven manufacturing units across the country,” it added.

Commenting on the transaction, Roshini Bakshi, Managing Director, Everstone Capital Asia, said “We had a phenomenal experience in rejuvenating the legacy brand of Modern and bringing it to the dining table of consumers again. Modern has unlocked its potential through its portfolio expansion and wider reach thereby exhibiting tremendous growth. I wish Grupo Bimbo the best for future and hope they continue to grow bigger and better.”

Investec acted as a sole financial advisor to Everstone and Modern Foods on the transaction.

Grupo Bimbo is the largest baking company in the world, operating in 33 countries, including India, and has a diversified portfolio of over 13,000 products and more than 100 renowned brands. The financial details of the transaction were not disclosed.

This is Groupo Bimbo’s second acquisition in India in the bread and bakery segment. In May 2017, it acquired a majority stake in Delhi based Ready Roti, which produces packaged bread, pizza bases, and sweet and savory buns, with leading brands like Harvest Gold and Harvest Selects.

Modern is a brand with a pan-India presence in the bread and bakery segment. It competes with other bread brands such as Britannia, Harvest Gold, Nature’s Own and English Oven, among others. Over the years, the brand has diversified from its core bread business to other categories such as cookies, cakes, rusks, sweet fills, pizza bases, batter and mixes. The company’s consolidated sales as of March 2019 were Rs 390-Rs 400 crores, sources said.

At its peak, Modern Foods enjoyed more than 40 percent share of the bread market in India. Modern Foods products are available nationally in nearly 100,000 stores and are made in 40 factories. It is present in more than 15 states and has a strong presence in south India.

In September 2019, Modern Foods purchased a majority stake in Sonepat, Haryana-based Supreme Baker Pvt Ltd, which produces bread and cookies.