Inside India’s Largest Plant-Based Dairy M&A: Why Nourish You Acquired One Good

In what is one of the largest acquisitions in the Indian plant-based sector, superfood player Nourish You has acquired vegan dairy brand One Good. Ahead of a planned Series A next year, CFO Radhika Datt pulls the curtain on the why and how of the deal.

Hyderabad-based superfood maker Nourish You has acquired 100% of Bangalore-based plant-based dairy startup One Good for an undisclosed sum, the largest M&A deal in India’s booming alt-dairy sector. The move strengthens Nourish You’s position as one of the leading businesses in the space, leveraging One Good’s strong online presence to complement its increasing retail footprint.

The acquisition was conducted via a share swap. Speaking to Green Queen, One Good co-founder Radhika Datt confirms that while the brands will remain separate, operations will merge and there will be restructuring involved.

It’s big news for India’s biggest plant-based market. According to the alt-protein think tank the Good Food Institute (GFI) India, nearly two-thirds (65.8%) of vegan companies are focused on dairy alternatives (with almond milk brands topping the list). And more Indians are familiar with plant-based dairy (49%) than meat (28.5%) or eggs (19%).

“One Good’s journey is revolutionary. It was born with a vision of creating the next big dairy company, devoid of animals,” said Nourish You co-founder Krishna Reddy, who added that the deal helps Nourish You evolve “from being a superfood brand to a plant-based brand”.

New roles, no layoffs

Founded in 2015, Nourish You has an extensive range of superfood grains and products, including millets, seeds, mueslis, snack bars, speciality flours and quinoa – it prides itself on mainstreaming the latter in India. The company, backed by investors like Zerodha’s Nikhil Kamath, actor Samantha Ruth Prabhu, Darwinbox’s Rohit Chennamaneni, and Triumph Group’s Y Janardhana Rao (among others), also ventured into the alt-dairy world with a range of millet milks earlier this year.

So it makes sense that One Good was on its radar. Beginning as a door-to-door delivery service, the company (founded in 2016 as Goodmylk) has ridden the success of its flagship cashew-oat-millet milk, expanding into vegan alternatives to ghee, butter, mayo and peanut curd (it’s India’s leading dairy-free yoghurt brand). As it grew, it acquired other plant-based businesses to broaden its portfolio: nutrition brand Pro2Fit, and cheese makers Katharos and Angelo Vegan Cheese.

Now, with the Nourish You acquisition, the two South Indian startups will hope to consolidate their foothold in India’s non-dairy sector. It’s something One Good has been exploring for a while, as Datt explains: “As a brand, we have been on the lookout for the right strategic partnership for some time now. I think it’s a conversation that is constantly being had. Nourish You has been aware of our work since our inception, and has also entered the vegan space through their millet milk. So when this conversation came about, it was a natural fit.”

Datt confirms that there were no redundancies as a result of the acquisition. “The teams complemented each other well and there was immediate synergy,” she notes. All of One Good’s senior management employees, meanwhile, have assumed titled roles in the new entity. She is now the chief financial officer, (One Good co-founder and CEO) Abhay Rangan is a co-founder, and (former COO) Dhivakar Sathyamurthy takes up the position of supply chain head.

“We will continue to remain two separate brands,” adds Datt. “One Good’s mission of providing affordable, accessible Indian vegan products will endure. There is vertical and horizontal integration on product lines, which will increase economic efficiency. Overall, customers can expect to see both brands in more channels, and at competitive prices.”

Path to price parity and upcoming Series A

That last point is pertinent. Despite dairy’s dominance in the plant-based sector, cost remains a key hurdle for many Indians – a GFI India and Ipsos survey revealed that it’s the least influential reason for buying milk alternatives in India. Plant-based milks can be two to four times more expensive than cow’s milk, which is expected, given the country is home to the largest dairy industry in the world.

But One Good has made massive strides here. Its cashew-oat-millet milk is already much cheaper than most oat and almond competitors, selling at half the price. And in its home city of Bangalore, it continues to offer door-to-door delivery of fresh milk – while obviously hard to scale, this is where it achieved price parity with conventional dairy a year ago, with a litre of its plant-based milk available for ₹59 (70 cents).

Datt describes how a combination of Nourish You’s growing retail presence – its products are available in over 2,500 stores nationwide – and One Good’s strong D2C engagement positions can make them the “go-to destination for innovative plant-based alternatives in India”.

“We have years of hard work coming up to really leverage the scale and operational excellence of Nourish You to our advantage,” she says. “We are excited about expanded operations, working with new talent and delivering a combined value to the consumers.”

Nourish You certainly does have the platform – it’s aiming to close the fiscal year with a revenue of ₹30 crores ($3.6M), and aims to reach the ₹100 crore ($12M) mark by 2025. And given the dominance of the ₹250 crore ($30M) Indian alt-dairy market – it’s valued 2.5 times higher than plant-based meat – it will be hoping to grow exponentially. Plus, there’s government support: the country’s Science and Engineering Research Board (part of the Ministry of Science and Technology) has announced a funding call centred on making millet-based meat, egg and dairy proteins.

All this makes its case for its upcoming fundraiser stronger. Having raised $2M in seed funding earlier this year, Nourish You aims to secure ₹60 crores ($7.2M) in its Series A round, which is expected to close by mid-2024.

Next year will also see One Good hoping to expand its presence in more stores and widen the reach of its cost-competitive fresh milk. Additionally, apart from household consumers, it wants to be available to more institutions. “The funds will be used to expand our distribution for sure,” says Datt. “Through One Good’s warehouses, we’re currently already present in all five major cities in India, but our footprint in these locations needs to increase. We’ll want to invest more in offline presence and customer awareness.”

After capping off a big 2023, it seems Nourish You is embarking on One more Good year.