MTR forays into Rs 5 to Rs 10 mithai minis in Bengaluru

Given that the festive season is ahead, MTR Foods is also increasing its presence in the more traditional parts of its sweets portfolio: boxes of coconut barfi, besan laddu, Mysore pak, and Bombay halwa.

“Looking at how the market is evolving, we have forayed into an extended range of ready-to-eat sweets. This year going into the festive season, it is into expansion mode,” he said.

Following the same strategy and using Bengaluru as its launching ground, MTR also started its cold chain products like idli and dosa batter. “In the last two years we started wet batter. We have our factory with a dedicated team for back end and front end. This continues to drive good momentum,” he shared.

On growing the wet batter business, he said, “As we learn and develop, we will expand when we understand the market is right, hopefully soon. This product has a short shelf life of 7-10 days and replicates a bread, milk, egg kind of model.”

Bhasin said that the thought behind these ventures is convenience. Moreover, there is enough headroom for growth in each category MTR is present. “If you are in a category, then you play the spectrum. If you are in breakfast (foods), do ready-to-cook, pre-cooked, etc,” he said.

Festive cheer amid consumption slump

“If rice and dal are under pressure, sambar is under pressure,” Bhasin said. Like others, the spices brand is facing a consumption slowdown. Itg hopes to recover from this slump aided by recovery during the festivals coming up in the next few months.

MTR's rural and small urban market—the lower end—have been underperformed while growth in the metros has been in double digits, led by modern trade and e-commerce, Bhasin said.

He explained that while the “centre of the plate ingredients” like potato, rice, pulses, tomato and onion are inflationary, spices have seen more deflation, thus putting pressure on the spices industry.

Space on the home front

Bhasin justified the expansion in the domestic market, saying there is enough margin to grow "in what we are doing as the core market still has a huge scope in India as consumers move from loose and unbranded to branded, packaged products".

“Even in the highly developed category of spices and masalas, while the total addressable market is about Rs 85,000 crore, the branded market is still Rs 28,000 crore, so two-thirds of the market is still sitting in the unbranded and loose side,” Bhasin stated. “Our core geographies have significant size—Karnataka, Andra, and Telangana, each with a GDP the size of Finland's. A large addressable market with low penetration gives us a huge opportunity to grow,” he added.

International business

On the sidelines of the World Food India event, Moneycontrol also interacted with Ashvin Subramanyam, the CEO of International Business for Orkla India. He said that the international business was about 18 percent of the enterprise revenue of Rs 2,300 crore, and plans to close higher than 20 percent of the total business this financial year. “The expectation is to continue to grow in mid-teens in the next three to five years,” Subramanyam added.

This growth is driven by investment into more route-to-market infrastructure for distribution in the Middle East and North America for faster fulfilment and less out-of-stock situations. In the US, instead of one, they have 10 specific distributors, giving them greater coverage, greater shelf presence and a combination of route-to-market, distribution, and marketing investment.

While the company sells to 42 countries, the focus is on nine geographical clusters: four in the Gulf Cooperation Council or GCC area; Australia and New Zealand; Singapore and Malaysia; Europe and UK; the US; and Canada. 

The Middle East market  is currently contributing 69 percent, while the US and Canada add 20 percent to the international business. Wholly owned subsidiary Orkla IMEA launched outside India in early 2024 to expand its presence in that market and will further grow GCC through faster fulfilment, local storage, local warehousing and potentially processing depending on costs, said Subramanyam.

"In late 2021 and early 2022 we introduced a range for housewives in the Gulf area. This range has taken off for us. We have products like Seven Spices, shawarma masala, etc., and a couple of new variants that we are planning to launch soon. This year, this range is up about 65 percent of overseas revenue,” he said.

The international business has room to grow, said Subramanyam. “The Indian diaspora is expanding into potentially newer geographies. The nine clusters have a sizeable presence of Indians. Also, every year 2 million to 2.5 million people are added to the existing 32 million Indian diaspora, which drives where we go. The second growth driver is within the markets into newer consumers like Arabian consumers. We may see other consumers coming on as Indian food gets more mainstream,” he added.