Fast-moving consumer goods (FMCG) companies are expected to maintain a steady pace of acquisitions in the direct-to-consumer (D2C) space in 2026, as they look to accelerate premiumisation, shorten innovation cycles and build sharper digital capabilities amid uneven volume growth in their core portfolios.
According to industry executives and investors, the case for buying D2C brands remains intact, even as deal-making becomes more selective. The focus is likely to be on brands that can scale cleanly through an incumbent’s balance sheet, supply chain and distribution network, while retaining their differentiated positioning and consumer connect.
“These companies operate on rapid test-and-iterate cycles, enabling large FMCG players to compress product development timelines from years to months,” Vikram Gupta, founder and managing partner at IvyCap Ventures,told FE. He added that D2C brands also bring deep first-party consumer data, covering discovery, repeat behaviour and churn, giving acquirers clearer visibility into evolving preferences and pricing elasticity.
Why Incumbents are Paying a Premium for Agility
The acquisition rationale is reinforced by the growth differential between digital-first brands and traditional FMCG portfolios. According to Crisil Ratings, about two-thirds of FMCG acquisitions over the past five fiscals have been in the D2C space. According to Somdutta Singh, founder and CEO of Assiduus Global, D2C companies recorded revenue growth of around 40% CAGR between FY21 and FY24, compared with about 9% CAGR for established FMCG firms over the same period.
“That gap matters because it explains why incumbents are actively looking outside their core portfolios for growth,” Singh said. According to her, many D2C brands are built around a sharply defined consumer need and a clear value proposition, making premium pricing more credible and defensible.
Large FMCG companies have also been using acquisitions to buy speed and capability rather than just topline. Recent transactions include Hindustan Unilever acquiring a majority stake in Uprising Science, the parent of Minimalist, and Marico taking full control of digital-first packaged foods brand True Elements. Even D2C-native players such as Honasa, the parent of Mamaearth, have been active on the acquisition front, underscoring consolidation pressures within the ecosystem.
New Acquisition Playbook
Loyalty and channel readiness are emerging as equally important drivers. Many D2C brands are built around a clearly defined consumer cohort and tend to show stronger repeat behaviour. “By acquiring these startups, FMCG companies are also acquiring a loyal consumer base that already trusts the brand, which reduces the cost and time needed to build long-term engagement,” Singh said.
The rapid expansion of quick commerce is adding urgency. Industry studies estimate the segment could grow at around 40% annually over the next few years. According to Singh, this will lead FMCG firms to rethink pack sizes, assortments and fulfilment models. D2C brands that have already optimised for marketplaces and quick commerce reduce experimentation risk for acquirers, Singh said.
Valuations, however, are expected to stay disciplined. Some under-performing startups are being acquired at 2–3x revenue, where buyers see strategic value and believe execution gaps can be fixed post-acquisition. Deal structures with earn-outs are also likely to remain common, helping manage risk while keeping headline valuations attractive, as seen in ITC’s acquisition of 24 Mantra.
Looking ahead, experts expect a steady to slightly higher pace of transactions in 2026, led by health and wellness foods, clean-label staples and differentiated personal care. “If valuations remain sensible and fundraising stays tight, more founders may opt for strategic exits,” Singh said, adding that integration capacity will ultimately determine how aggressively each FMCG group continues to buy.