MTR owner, Retail News, ET Retail

[ad_1]

Norwegian investment company Orkla said India’s food preference is similar to some of the European countries but the market is more complex with higher competitive intensity as people increasingly shift to branded spices.

The consumer goods supplier owns MTR and Eastern Condiments, and gets three-fourths of its sales from southern states.

“In India, the route to the consumer is more complex than what we are used to from the European markets. The competitive intensity is on a higher level. There is a big difference between the Italian and the Scandinavian kitchen. That’s very similar to differences you find between south India, east India, north India and maybe more granular than that,” Orkla Foods Europe chief executive Atle Vidar Nagel Johansen told ET. “We have given the role of each portfolio company in Orkla and India is definitely in the category that will be called grow and build.”

While the spices market is over Rs 90,000 crore, just a third of it is branded. Within the organised spices category, the Everest brand is the market leader, followed by MDH. Also, in masala, herbs and spices, domestic players including MTR, DS Foods, Ramdev and Eastern retain the upper hand in select geographies. However, other FMCG players are also strengthening their presence in the spices and ready-to-cook categories.

Two years ago, Dabur bought a 51% stake in Badshah Masala for ₹588 crore, while ITC acquired spices manufacturer Sunrise Foods in an all-cash deal valued at ₹2,150 crore four years ago.

With sales of Rs 2,300 crore last calendar year, MTR gets about 70% of its revenues from spices. “The role of spices in the Indian kitchen is huge compared to what we have in the European markets. So it’s much more developed and varied with diverse spice consumption here. The migration from unorganised to branded spice markets may still take some years but the direction is there and we as a supplier just need to continue to promote our brands and deliver what consumers expect,” added Johansen.

Last year, the company restructured its Indian operations under one business entity, Orkla India, with three business units-MTR, Eastern and international business (IB)-in an attempt to leverage their combined business capabilities and drive sharper growth. Orkla entered India in 2007 by acquiring MTR Foods and nearly 4 years ago, it bought a majority stake in Kerala-based Eastern Condiments.

Unlike other FMCG firms trying to enter newer states, Orkla said it would rather focus more in southern India. “We are not here to win across India. We are actually here to win in some of the states we are operating. Our focus is local and about building and growing local brands. So, with MTR we are focusing on Karnataka and Andhra Pradesh, with Eastern we are focusing on Kerala,” said Sanjay Sharma, CEO, Orkla India.