 "MTR Foods")
Ninety-year-old household brand MTR Foods expects revenue to touch Rs 1,000 crore by end of next year as it increases focus on ready-to-eat foods that could be consumed faster by young consumers.
Norway’s consumer brand Orkla bought MTR, a household name in Bengaluru nine years ago, and has focused on investing heavily on expanding capacities and improve quality processes.
Since taking over it has invested Rs 200 crore in the business, focusing on newer products that contribute a tenth of its revenue. This year, the firm is expected to clock revenues of Rs 800 crore.
“If the economy remains stable and everything goes well, we will close at Rs 800 crore this year and Rs 1,000 crore by next year. We have a new vision for the company now which is to bring authentic Indian food at high convenience to the customers. We are creating new categories and innovations for the same,” said Sanjay Sharma, CEO of MTR Foods.
As a first step in this journey, that Sharma calls making MTR futuristic, in August, the firm introduced new products such as instant upma and vermicelli.
Sharma says that there is no better period for processed food than now in India.
“The coming 10 to 15 years is going to be remarkably good for processed food. This is because the whole demographic and psychographic profile of customers is going to change. The younger generation of consumers is built on variety of choice. They are far more aggressive and far more willing to spend. However, this generation does not know much about cooking, they depend a lot on packaged food,” says Sharma.
MTR believes that this change is happening due to e-commerce, because of which we are seeing a completely different consumption pattern arising. Everything is being ordered at home as the younger generation of consumers lack time at home and are focused on building their careers.
“Therefore, psychographically, they are most suited to adopt high convenience food. Over the last two-three years, we decided to change the nature of MTR’s portfolio dramatically,” said Sharma.
In the process of change, the company has also cut down categories, such as ice-creams and papad. “We felt that only portfolio that contributed to our long-term vision would be retained. We carved our vision as someone who wanted to deliver authentic Indian food to our consumers with high convenience,” said Sharma.
In another attempt to woo young consumers, the company also started its own online site in July, which is available in all the four southern cities along with Mumbai and Delhi. The firm sells around two million units of its products on its site every month. At the same time, it generates sales of over 10 million units a month through portals such as Amazon and Bigbasket.
The company, however, noticed that their highest sales came from its exclusive retail shops, Namma MTR. This, they noticed, was because all their 350 products were available in the exclusive shops.
“The role that our own portal will play is that it will offer the whole range of MTR products unlike an Amazon or Big basket which offers on an average 30 to 40 MTR products. Will it work or not, I do not know. What will be the trend out of it also I can not predict. It is a risk that we have taken... We have to wait and see how it will do,” said Sharma.
Sharma says that while the company’s highest revenue still comes from the masala category, going further he feels that the major share will be taken up the processed food category.
“There will be a reversal and people will no longer need masala’s. While people will want to eat Sambar, they will not know how to make it. Thus, the preferences will change. It has already started to change,” added Sharma.
Other than high convenience food, the company is also concentrating a lot of research and development on healthy food. This, the company says, will focus on reducing the salt, sugar and fat levels in all their products. Sharma says that in the next four-five years, all MTR products will be within the 10-12 range of recommended dietary allowance, which is considered healthy.
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Portfolio Distribution of MTR
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1) Spices and masala: 38 per cent
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2) Ready Mixes (breakfast mixes, healthy drinks such as Badam drink, dessert and snack mixes): 32 per cent
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3) Vermicelli: 14 per cent
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4) Ready to eat: 8 to 9 per cent
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5) South Indian snacks: 2 percent
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| 6) Pickles : 2 per cent |
