MTR Foods, the brand known for ready-to-eat food items, spices and snacks, has decided to bring out state specific products to capture the fastest growing ready-to-eat market in India, which is estimated to be around R20,000 crore and is growing around 25-28% per annum.
The company has decided to double the ad spend to 16% of the total sales achieved effective this year.
The company, a dominant player in the south with 32% market share in Karnataka and 15% in Andhra Pradesh, decides to replicate its success in other parts of the country by developing and introducing regional specific products, apart from introducing products of different regions into different markets to garner a sizeable chunk of the market, said Sanjay Sharma, chief executive officer, MTR Foods.
?We are into complete household market and we need to spruce up our presence further,? he added.
In an exclusive interview with the FE on Thursday, he said: ?Though the brand has been synonymous with customers across the country, particularly in the southern markets, it is still underleveraged. Ever since Orkla of Norway bought out the promoters and two PEs ? JP Morgan and Aquarius India Fund ? way back in early 2007 along with promoters, there has been a strong push for the MTR brand by entering into newer areas within the three categories of spices, ready-to-eat food items and snacks.?
?While we are strong in Karnataka and Andhra Pradesh, we need to be aggressive in Tamil Nadu and Kerala in the south. Though we have presence in north, west and eastern regions, region-specific players dominate the industry, which is largely unorganised except a few known brand names like us,? he said.
The company is working on producing products that are more relevant to particular states. ?We have hired expert cooks to develop these products. We have established a strong network. We want to enlarge our scope of activities with cross polarisation of cuisine to become a market leader across the country.?
?Though we have products across nine categories, we want to play and focus on spices, ready-to-eat food items and traditional Indian snacks that together contribute around 80% of our total sales at present. We are strong only in south Indian items and we will introduce products to capture customers of other regions,? he said.
The remaining 20% of total sales comes from products like pappads, pickles, ice creams and other snacks, he added.
?We have invested over R100 crore to expand our facilities in Hosur by doubling spices and breakfast mixes capacities to 12,000 tonne and 8,000 tonne per annum, respectively. We will also increase our ad spend to 16% of our total sales, which is now pegged at R350 crore. Our objective is grow at 28% per annum to touch R1,000 crore mark by 2015-16.?
The market is dominated by regional players at present and there are no major organised players. ?However, with ITC, Nestle getting aggressively in different categories, the market is going to be challenging,? he said.
