Aditya Kalra, Abhirup Roy

MUMBAI (Reuters). India’s largest retailer Reliance is set to buy dozens small food and grocery brands in its bid for a $6.5 billion consumer goods division. The company aims at challenging foreign giants like Unilever (NYSE) according to two people familiar with the plans.

Reliance, owned by Indian billionaire Mukesh, hopes to develop a portfolio of between 50 and 60 household, personal, and grocery brands within six month. It is currently hiring distributors who will take the products to small- and large-scale retail outlets in the United States, according to sources.

Reliance Retail Consumer Brands’ consumer products push will complement Ambani’s extensive brick-and mortar store network that includes more than 2000 grocery stores, and Ambani’s ongoing expansion in “JioMart”, an ecommerce operation in India’s $900billion retail market. India’s largest is also a major global player.

The first person familiar with the company’s business plans said that Reliance is at final stages in negotiations to acquire around 30 local niche brands or create joint venture partnerships.

It is unclear how much the company will invest to buy brands. However, a second source claimed that Reliance set a goal of generating 500 billion rupees ($6.5 billion) annually from the company within five year.

“Reliance” will be transformed into a brand house. “This is an inorganic game,” the person stated.

Reliance has not responded to our request for comment.

Sources said that Reliance has a new business plan and is looking to compete with some of the largest consumer groups in the world, such as Nestle, Unilever (NASDAQ:) Inc, PepsiCo, PepsiCo, Inc, and Coca-Cola, which are all based for many decades in India.

However, it’s difficult to compete with established foreign corporations that own their manufacturing facilities in India as well as thousands of distributors who distribute their famous products across this vast country of 1.4billion people.

Unilever India’s unit reported $6.5 Billion in sales for the financial year ended March 20,22. The company claims that at least nine of 10 Indian households are using one of its brands.

Alok Shah of India’s Ambit Capital, said that there is some brand value attached to established brands and it is difficult for new companies to be competitive.

Reliance will scale up faster if they choose inorganic as their route to production. They will need to fix the distribution and pricing to be competitive with larger rivals.

Hiring, Product Categories

Reliance, a leader in retail sales, still generates the largest consumer goods revenue by selling and distributing rival products at its own stores and mum-and-pop outlets.

Reliance developed a few private labels, whereby it employed contract producers to produce cola drinks, noodle packs, and other products for its retail outlets. However, that company generates just 35 billion rupees ($450m) annually in sales, according to the second source.

Reliance’s strategy for supermarkets was already causing concern among foreign firms, Reuters reports last year. Private labels competed with global brands to get shelf space, which has caused concerns in the past.

Reliance is pushing for deals with Indian brand names through its new line of consumer goods.

One source said that Sosyo is talking to brands about a possible acquisition. Another is Hajoori, an Indian soft-drink company with a close 100-year history. Hajoori is located in Gujarat in western India and is known for its flavored drinks.

Aliasgar Abbas Hajoori (director of the company) stated in a statement that “we don’t comment upon speculations.”

LinkedIn profiles demonstrate how Reliance has slowly increased its efforts in expanding its consumer business. It has been hiring senior executives from Kellogg (NYSE – Co) and Danone in recent weeks for sales and quality control.

Reliance advertised a LinkedIn job that said it had shortlisted staples, drinks, and chocolates for first launches and was looking for mid-level managers to help the company in its more than 100-city and small-town locations.

The ad states that one of the most important tasks for such executives is to manage and appoint merchants.