Sanjay Sharma, MD & CEO, Orkla India, best-known for the MTR and Eastern food brands, is focusing its attention on building a stronger footprint, as its looks to scale up its nearly Rs 2,500-crore business. Sharma, an FMCG veteran, who has been with Orkla (formerly MTR Foods) since 2009, speaks to Viveat Susan Pinto on the opportunities and challenges. Excerpts:
1) Fluctuating commodity cycles are hurting businesses such as Orkla India. What is the strategy to ring fence from this volatility?
Commodity exposure is inherent to our business model, particularly in spices, which gives us two-third of our revenue. I must emphasise here that two consecutive years of 30–50% deflation in spices is a black swan event for us. I’ve been in this industry for 17 years, but I’ve never seen a cycle like this. We’re already seeing signs of acreage reduction as farmers shift away from unprofitable spice crops. Early indications suggest inflation may return. If moderate inflation comes back while volumes remain strong, we expect to return to double-digit growth. At the same time, we are steadily scaling convenience foods, which will gradually rebalance the portfolio mix. For us, building penetration and increasing consumer adoption matters more than short-term price fluctuations. Commodity cycles will normalise, but the consumers we gain stay with us.
2) Since acquisitions have been a cornerstone of your strategy over the years, which areas will you focus on in the future? Any new segments you are targeting?
We will continue to focus our attention on spices and masalas, traditional food categories and complementary food segments. We will look for market leaders—number one or number two in their geographies—with strong value-creation track records. We have over Rs 500 crore in cash on our books and are zero-debt. Beyond that, we have access to bank funding, support from the parent organisation, and equity options, if needed. So, capital is not a constraint for us when it comes to doing acquisitions.
3) How do you propose to build penetration given your inherent strengths in the south?
While 70% of our revenue comes from south, the strategy for us will be to go deeper within these markets rather than chase pan-India presence. Deepening our penetration will give us far greater return on investment than looking to expand presence into markets where food preferences don’t necessarily align with our portfolio of products. We are cognisant of these realities, even as we eye future growth. At a broader level, our focus will remain on volume growth and consumer expansion, building long-term brand equity, driving innovations and maintaining a disciplined capital allocation policy.
4) What is the strategy with convenience foods which gives you a third of your revenue?
We are building three platforms in convenience foods: breakfast, meals and sweets. Year-to-date, this segment has grown 12.1% in value, while volume growth has been 6.1%. What excites us most is innovation—our new products in convenience foods grew 41.6% (in terms of sales) over last year. This category is less exposed to raw material volatility, and over time, we expect it to outpace spices.
5) A large conglomerate has entered the southern FMCG market recently. How do you view its entry?
We operate in a highly competitive environment. Our strength lies in our heritage brands and strong retail network. MTR Foods is over 100 years old, and Eastern Condiments has been a trusted name for decades. We’ve demonstrated resilience over time. Our focus remains on execution excellence, brand building, and consumer trust. We are confident as far as our positioning goes.