The company has taken to online retail and tie-ups with food aggregators to ensure product deliveries to customers during the lockdown
Much like other FMCG companies, MTR Foods has taken to online retail and tie-ups with food aggregators to ensure product deliveries to customers during the lockdown. Sunay Bhasin talks to Devika Singh about how consumer behaviour is changing, growth in the company’s e-commerce sales, and more. Edited excerpts:
What has been the impact of the lockdown on MTR thus far?
The impact of the lockdown on our company was quite dramatic initially, as it was for other FMCG players. Our supply chain, manufacturing and transportation were disrupted. However, with time, we have seen a new normal emerge. Although challenges still remain, things are much better now. We have to keep an eye on the developments and quickly adapt to them. Green zones become orange zones or red zones overnight, and then we have to figure out a way to maintain our supplies in these places.
We are serving only 50% of the retail universe. Out of our two factories, only the one in Bengaluru is operational currently; and out of our seven outsourced plants, only five are running. Also, to maintain hygiene and safety, we are working with only 50% manpower in these manufacturing units.
With traditional retail hit, have you shifted focus to alternate retail channels?
We were already present on Amazon, Grofers and BigBasket. But we are now also delivering to 15,000 pin codes across the country through our own website. We have tied up with food aggregators Swiggy and Zomato, and fitness start-up Cure.fit. On the B2B side, since our tie-ups with railways, airlines and caterers have suffered, we are forging new partnerships. We have partnered with oil and gas company Royal Dutch Shell to make our products available at most of the convenience stores at its stations.
How differently is the consumer buying today? Have you seen a surge in e-commerce sales?
We have observed that convenience has emerged as one of the top trends these days. With the entire family at home throughout the day, the homemaker’s workload has gone up. She is therefore seeking more convenient options. This has led to increased use of e-commerce for buying products. While other channels remain bigger, e-commerce is growing rapidly. Last year, we ended with 2% sales from e-commerce, but in the month of April, we saw the channel’s contribution double. E-commerce now contributes 4% to our overall sales.
Also, since eating out is not an option, to break away from the routine, there is more experimentation happening in homes. We are seeing increased demand for our masala powders and gulab jamun in our sweets range.
Moving forward, there could be a change in the way traditional foods are prepared. The economy is under stress, and if we enter a slowdown, then the spending pattern of consumers may change, and we may have to relook at our prices. We have noticed that there’s a demand for healthier foods. But these are still evolving trends. We will see how they pan out and then take a call on how to address them. We had 80 products in the pipeline which have been put on hold for now.
We have also seen alternative channels emerge. In Bengaluru for example, consumers in apartment complexes have been sending orders through WhatsApp, with stores then sending a truck with products to the housing complex. So, newer ways of accessing what was earlier brick-and-mortar, have emerged.
How has your marketing strategy changed in recent months?
Since there is no ready playbook available, we rely on weekly calls with consumers across India to get an insight on their behaviour. Initially, when this situation emerged, our priority was to make sure our products are available. However, now we are back to advertising, but the focus is on digital. We understand that e-commerce will continue to grow, as more and more consumers are trying it. So, we will be launching stronger digital marketing initiatives in future. We might also come back on traditional media soon. Consumers want to be assured of the hygiene and safety of the food they are consuming, and, therefore, most of our communication right now is centred around that.