MTR eyes bigger share of palate beyond South

MTR Foods, the packaged foods company known for its South Indian instant mix delicacies, is seeking to recast its image as a food-maker with a pan-India appeal in order to grab a bigger pie of the market that is seen growing to $20 billion in three years. The Bangalore-based firm, which was acquired by the $10 billion Norwegian fast moving consumer goods and aluminium solutions company Orkla in 2007 for $80 million, is looking at leveraging the brand equity it has in the South, primarily in Karnataka and Andhra Pradesh, to strengthen itself in the West and North.

Estimates by consulting firm Technopak state that the packaged food industry is likely to be worth $20 billion in India in another three years, and a traditionally Southern player like MTR therefore wants to capitalise on this opportunity.

Sanjay Sharma, CEO, MTR Foods, said the brand is well-known in the South, but in the West and North the MTR image is not very clear, though consumers might have heard of it.

The company plans to bring out more products appealing to consumers in the western and northern regions and also sell its conventional South Indian products in rest of India.

 “In the past we have launched gajar halwa, dhokla, jalebi mixes and we have products for the North Indian palate in our ready-to-eat segment. But we are now looking at introducing more products in the sweets, snacks and meals which will appeal consumers across the country,” said Sharma.

Since its acquisition four years ago, parent Orkla has invested about Rs100 crore in MTR. Sharma said in the last decade the Rs300 crore company has grown at a compounded annual rate of 15.5%.

“We want to hit a turnover of Rs500 crore by December 2012, and the North and West regions will contribute to a large extent in this,” said Sharma.

MTR wants to concentrate on markets like New Delhi, National Capital Region, Mumbai, Gujarat, Punjab, and Chandigarh.

However, industry experts are not too optimistic on a majorily regional player getting quick success in its pan-India quest.

There are several regional players in categories like masala, spices, instant mixes like Everest, Badshah, MDH, Gits, apart from big guns like ITC, and despite the potential, creating a recognisable presence is tough, say experts.

“Any regional player looking for creating strong pan-India image needs a very good distribution network. Otherwise, the player will just be another small fish in the huge ocean,” said Arvind Singhal, chairman, Technopak.

Nonetheless, riding high on optimism, to attract consumers in these places, MTR will canvass with its ‘breakfast with MTR’ concept which entails going to housing societies and giving demonstrations of its products, along with sampling and tasting counters.

“We have started consumer connect activity in New Delhi, NCR and Mumbai and have seen a 40-50% increase in sales,” said Sharma.

The company also plans to start in-shop sampling of its products in various malls and departmental stores.

“In-shop sampling often sees conversion rates of 40% with many people buying the products after tasting them,” said Sharma.