How MTR Foods is targeting millennial consumers with its ready-to-eat category

MTR Foods, founded by food entrepreneur Sadananda Maiya in 1976, produces packaged foods in different ranges such as spices, instant mixes, masalas, ready-to-eat foods, beverages, pickles, snacks, etc. It offers over 100 products, including readymade idli and dosa batter. 

The Bengaluru-based company, which was acquired by Norwegian Conglomerate Orkla in 2007, clocked Rs 980 crore in revenue in FY22.

Today, the company is ramping up its digital initiatives to have a stronger online presence, apart from having 1 lakh outlets across the country. 

According to the ‘India Ready-To-Cook Market Outlook, 2021,’ the ready-to-eat segment has grown at a CAGR of 15-20 percent in the last five years. As per Research & Markets, the Indian ready-to-eat market is expected to grow at a CAGR of roughly 16 percent from 2018 to 2023, reaching $647 million. 

In an interaction with SMBStory, Sunay Bhasin, Chief Commercial Officer, MTR Foods, decodes the last two years of the company, the ready-to-eat category, and plans ahead.

Edited excerpts from the interview:   

SMBStory [SMBS]: What inspired MTR Foods to foray into the ready-to-eat category?

Sunay Bhasin [SB]: We forayed into the ready-to-eat category in 2000. However, the aspect of hyper convenience, when it comes to providing food solutions, compelled us to look for deeper solutions in 2017. There is a fair amount of migration in India, and when people move, the support system is not available. We saw this becoming a mainstream trend in 2016. These people were looking for solutions from food companies that would help them fill the gap of lack of desire for cooking or lack of time. So, the need for convenience drove us to form this segment—MTR Minute Range which included the three-minute breakfast range of products. 

We started with the three-minute breakfast category and then moved to other products such as turmeric milk mix, rasam, and most recently, the idli and dosa batter segment. Millennials are a consumer category that seek a higher order of convenience without compromising on taste. 

SMBS: During the COVID-19 pandemic, especially the first wave, people were not ordering outside food. But many companies reported an uptick in their ready-to-eat categories. What caused this?

SB: The biggest disruption came in March 2020 when the pandemic was first announced. There are two reasons why the ready-to-eat segment saw an uptick. The breakfast mixes and other products in the portfolio have always been a part of our core business. So, we understand the segment and how to cater to the customers. Moreover, we have a range of 100 products, of which we saw the South Indian portfolio range grow substantially.

I believe the fact that we can cater to a wide portfolio and people were in a mood to experiment are also responsible for our segment to do well. 

The other thing is that people were very fearful of ordering food from outside, but because they were caught in Zoom calls, office work, and more, the need for convenience heightened over this period. 

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SMBS: You reported the online sales numbers to reach nine percent at their peak. Now they have come to five percent, but are planning to take this number to 10 in the coming times. How do you plan to do so?

SB: The Minute Fresh (Idli-Dosa batter range) has been created as a separate unit within the business and there is a separate, fully-dedicated team for this vertical. As far as channels are concerned, we have the advantage of the 6,000 retail outlets in Bengaluru, including (general trade and modern trade) we are present in, because MTR is a well-known brand. But we endeavour to be available wherever the consumer wants us to be. So, we also have a presence on ecommerce websites such as Amazon, Flipkart, and even our D2C website. 

Additionally, just two years ago, our share of online sales (for the Minute Portfolio) was just two percent. It went up to five percent and even touched 10 percent at one point in time. Now, we are back to five percent. To make this number back to 10 percent, we are ramping up our digital investments to 25-30 percent from 8-10 percent previously. 

We have identified trends on the digital front. So, we are putting very focussed efforts into them. We are continuously thinking about how to communicate and engage with customers spread across different cities (metropolitans), and categories (smartphones, television).

SMBS: You forayed into the dosa-batter segment in December 2021 and are promising same-day delivery for customers in Bengaluru. How do you see competition from other players such as ID Fresh Foods and informal players like kirana stores?

SB: We always had competition in the offline space. We have had competition from other Indian FMCG giants, multinational companies, and then a lot of local businesses, which deal in masalas, spices, and more. 

I think the fresh batter is our biggest differentiator because extensive research of about three to four years has gone into developing the product. The Red Rice Dosa is one of the bestsellers. 

A lot of times, I get asked what took us so long to venture into the batter category. So, I say the category, till a few years ago, was just emerging, but today it is ready. The traditional recipe of making idli or dosa always existed, but when it comes to the batter, I believe we have not been able to do justice. 

But with our products, we have tried and got a 96 percent satisfactory rating from them. I think that our product and proposition are what’ll set us apart.

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SMBS: What are your plans going forward?

SB: In the coming times, our focus is to establish the products we have just launched. The ready-to-eat category is still under-penetrated, so we have a lot of scope to grow. We are also focusing on building traction and penetrating deeper into some of the regions in India. We are also in the process of rolling out more products, but I can’t talk about them at this point. 

(The story was updated with additional inputs from the company on the number of outlets and the upcoming idli-dosa vertical.)