L Catterton has acquired a minority stake in Indian pet food Drools Pet Food Private Limited in a deal worth around $60m.
The move marks the US-headquartered private-equity firm’s first foray into what it described as a “burgeoning” pet-food market in India.
Drools manufactures dog and cat food, selling the products under its namesake Drools brand, Pure Pet and Kitty Yum.
The pet food is available at retailers across India, as well as e-commerce channels through Amazon and Bengaluru-headquartered Flipkart.
“This is an exciting time to be entering the country’s pet food market, which we believe is at an inflection point,” said L Catterton Asia partner Anjana Sasidharan. “We look forward to working closely with the Drools team to further scale its business.”
Drools said it hoped the deal would “unlock a new phase of growth”. Founder Fahim Sultan said: “We are keen to leverage [L Catterton's] consumer insights, operating know-how, as well as commercial network to further strengthen our brands and recruit talent.
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“India’s developing pet market continues to mature across metros, as well as tier-one and tier-two cities, and we see many more years of secular growth ahead.”
The transaction follows L Catterton’s move into the Chinese market last year with Pure & Natural brand owner Shanghai Enova Pet Products.
In February, it invested in its second Chinese brand, Partner Pet, taking an unknown stake in the freeze-dried pet food manufacturer.
The Indian pet-food market is predicted to grow by 20% year-on-year for the next five years and could reach $1.2bn by 2028.
Pet adoption is increasing in India as house sizes become smaller and the country “more urbanised”, L Catterton said.
It cited rising income levels and the increasing humanisation of pets among the macro-environmental factors influencing a steady rise on expenditure on pet food. Traditionally the majority of Indian pet owners fed their animals home-cooked scraps and leftovers.
The founders of India-based D2C pet-food brand Henlo told Just Food last year animals have shifted from “functional” to “companions” in the Indian psyche over the last decade, with Covid-19 accelerating pet ownership as people searched for companionship amid lockdowns. Ownership is also growing beyond the boundaries of “top tier” cities (those with a population of more than 100,000).