With innovation at its core, MTR Foods has come a long way from the packaged Rava Idli Mix to investing Rs 40 crore in a new manufacturing plant for its confectionery category, Laban.
With innovation at its core, MTR Foods has come a long way from the packaged Rava Idli Mix to investing Rs 40 crore in a new manufacturing plant for its confectionery category, Laban. Over the last five years, the company boasts of introducing 40 odd innovations, which contribute to almost 10% of its turnover, informs Sunay Bhasin in an interview to BrandWagon’s Meghna Sharma. Betting big on its two innovations this year — the three minute-breakfast category and a new spicy sambhar mix for the Southern market — the company isn’t shying away to spend time getting its products right through research, taste and packaging apart from marketing initiatives. Edited excerpts:
From packaged foods like Rava Idli Mix to a whole host of other categories… what does MTR want to be known for, and how would you define your current TG?
MTR Foods came to the fore after the launch of Rava Idli Mix — the biggest success for us. Since then, we have launched South Indian breakfasts, mixes, sweet mixes, masalas, etc. Over the years, we have expanded into various food categories to now introducing a new brand, Laban.
If I was to talk about our product line, we have the traditional homemaker range with masalas, mixes and South Indian breakfast. But over the last year or so, we have consciously added to our portfolio a part which is relevant to millennials and the youth, which is our three minute-breakfast launched earlier this year. And now with Laban, Orkla’s flagship brand, we are now entering the confectionery category. Therefore, we have the MTR brand which stands for convenient Indian food and Laban which stands for a young and playful brand. We are widening our TG and we realise that two-thirds of India is below 35 years of age. It is a big segment and we have to cater to it as well. One can say our TG now starts from the youth, say a college-goer, to a homemaker.
For Laban, what is your strategy to compete with already established brands in the market?
We are very clear. Laban is a differentiated product. While Laban is huge in Norway, we have localised it — we have localised the formulation, which took us almost three years to get right; we have also localised flavours (green mango, mango, strawberry and orange) and its packaging. The proposition though remains true to its core, which differentiates it from others in the market — it is a stretchable jelly shaped like a human.
How big is the ready-to-eat market? What share of the pie are you looking for over the next five years?
Ready-to-eat is a huge category with numerous sub-categories. Our core category is the breakfast category and its biggest market is North India. For curries, which come in pouches or trays and can be taken straight off the shelf and eaten, we have 30 odd-products; it enjoys 45% of the market share. Then there is the breakfast category wherein one needs to add hot water to the product, and there is no cooking involved. This category doesn’t have any big players, currently. Next is the ready-to-eat sweet category which also sees competition from local sweet shops. In this, obviously, we have a much smaller base.
Over the years, what changes have you witnessed in consumer behaviour? Also, have you witnessed any geographic or demographic shift in the demand for and consumption of your products?
There are a few changes which have happened. One of the most important ones is the emergence of a new segment of people who have a very different approach to food — while they love their Indian food, they want convenience as well. This generation’s knowledge of cooking is coming down and there is huge paucity of time, although they love to eat.
We have products that cater to various age groups, and it isn’t only about convenience. We are the solution providers for their eating needs. We have masalas for people who want to cook restaurant-like food, and mixes and ranges that don’t have a cooking requirement at all for those who do not have time but do not want to compromise on taste and quality. Today, one needs to cater to a wide set of consumers.
Did GST have any impact on your revenues? Do you see the uptake for ‘restaurant-like’ ready-to-eat foods increasing, especially with eating out becoming expensive?
GST did impact our business but it was short-term. Having said that, we are now coming back on track when it comes to consumer demand and trade. However, it is too early to say if there is a new trend that is affecting eating out and could, in turn, benefit the ready-to-eat category. It will take another six-seven months to understand how it affects the category.
Which is the lead medium of communication for MTR Foods? How have your advertising budgets increased y-o-y?
TV continues to be the dominant media vehicle. Having said that, there are clear trends emerging, especially when we move to the youth segment. TV continues to command the bulk of our spends, but this again differs from category to category. For the youth category, three minute-breakfast and Laban — the digital spends are 25-30% of our overall communication ATL spends. For a traditional category like masalas, the relative proportion would be 5%. What we have seen over the last five years or so is that our dependence on TV has come down, but it still continues to have a dominant play. I would say, five years back it was 90-95%; today, it is about 75% TV.
How is MTR dealing with competition from Indian players like Haldiram’s and Bikanervala, which have launched similar packaged foods in the last few years, or even international food majors entering into India offering convenience foods?
We take a lot of pride in our ability to innovate — and this stems from the fact that we are very close to our consumers. There is a lot of consumer emotion and consumer work that is done by the marketing team and the product development team. We are also constantly talking to our consumers and we keep a track of emerging trends. As far as competition is concerned, it comprises global brands, Indian brands and a third layer — local brands. It’s on three levels — though our breakfast is an Indian breakfast and a differentiated proposition, it competes with other convenient formats like Western breakfast options (cereals, etc). We have international brands which compete with us. In dessert or masala spaces, we have national brands and local brands. There are brands like ITC which compete with us. The competitive landscape is dynamic as far as our business is concerned.