Baking a success: How Sampath Kumar sisters came up with a winning recipe

It took hundreds of trials with 200 bakers for sisters, Anindita and Suhasini Sampath Kumar, to come up with the perfect recipe for natural energy bar ‘Yoga Bar’ in 2015.

Since then, the founders have come a long way – from turning a mindset ‘health to bikta hi nahi India mein’ (health doesn’t sell in India) on its head and notching up sales of close to Rs 100 crore to striking a deal with diversified conglomerate, ITC.

Late evening on Tuesday, ITC announced that it had signed a binding term sheet to acquire 100 per cent of the share capital of Sproutlife Foods, makers of Yoga Bar healthy foods. The deal will be completed in tranches in three years’ time.

Step-by-step, the transaction is like this: an initial investment of Rs 175 crore would be made for acquisition of 39.4 per cent, which is expected to be completed by February 15, 2023; a further infusion of Rs 80 crore would be made by March 31, 2025 and purchase of balance shares on pre-agreed valuation criteria is expected by March 31, 2026.

So, for the next three years, the founders would remain ensconced in their position and would focus on handing over a company that would make ITC proud.

“It will be run as an independent company. Of course, we get all the support from ITC whether it’s sourcing or distribution. But my focus right now is to grow Yoga Bar and hand it over to ITC in a way that it is really proud of,” Suhasini Sampath Kumar, co-founder, Sproutlife Foods, said.

The scale-up plans are already being chalked out. Yoga Bar, which is into nutrition bars, muesli, oats and cereals, reaches about 5,000-6,000 retail outlets. The plan is to take it to 100,000 outlets leveraging ITC’s network. At the back-end, if there is any need to increase manufacturing then it may be looked at.

“We have our own manufacturing facility in Tumkur Food Park. It’s a very large facility. If at all, in the next three years, we decide to, then we might set up one more factory in the North, using ITC’s help,” Suhasini said.

The co-founders of Yoga Bar had been in stake sale discussions for a while now. Nestle was interested and had approached multiple times; ITC joined the fray later.    

But two things may have swayed the deal in ITC’s favour. “We get to see how we can build an independent company and then complete the acquisition in three years’ time. That construct was probably most attractive,” she said.

Plus, Suhasini pointed out, ITC’s ability to take risk, played a part. “ITC has grown the FMCG business in the last 20 years and they do it with a certain aggression.”

The co-founders have three years to give shape to their dreams leveraging ITC’s strengths. But getting to this point wasn’t easy.

Sproutlife was incorporated in 2015. But the seeds were sown much earlier when Anindita came up with the ‘Yoga Bar’ name in the US after a yoga class. She gave up her job in the M&A team of EY to focus on the project.

The trademark ‘Yoga Bar’ was registered and then a rigorous process followed to get the right product with numerous trials. Educating the retailer on healthy snacks was also a task. But the product found acceptance and VCs took an interest.

About $10 million was raised from Fireside Ventures and Elevation Capital. A manufacturing facility was set up in Tumkur food factory. But then Covid struck.

“We would have been a much larger company had the pandemic not struck. We are an offline focused company and when the pandemic struck, we had to change everything online,” Suhasini said.

Sproutlife’s third co-founder and Suhasini’s husband, Aditya Anand, joined at this point and helped scale up online plans. “Online is 50 per cent of our sales now,” Suhasini pointed out.

As Yoga Bar readies for a new phase, what next for co-founders? “Once an entrepreneur, always an entrepreneur. So, we would like to start up again,” is all that Suhasini is saying at this point.