Wednesday, April 10, 2013


What will one do when a lottery is won for a billion rupees? Normally such a winner will keep the money in deposits earning interest and live happily for ever! What about investing that money in Industry with an intention to earn more returns beyond the 9% interest being offered by most Banks? Considering the road blocks, impediments and excessive risks  that are to be faced by an entrepreneur in this country, very few can be expected to venture into industry. According to a news report, the reputed founder of MTR brand of processed foods, who took that company to stratospheric heights with hard work for more than two decades and sold the same to a multinational company some time back for a whopping Rs 360 crore does not seem to be content with sitting back and enjoying a leisurely life. His entrepreneurial spirit does not seem to be quenched in spite of his enormous success in his first avatar and with courage and conviction he has started the food business all over again with a new venture, his commitment still being on traditional foods of India for which he had slogged for years as head of MTR Foods earlier. Knowing him well there is no reason to doubt about his success in the second avatar for which the country is looking forward. Here is a critique on his new vision and expectations.

India's packaged food industry, including snacks and ready-to-eat foods, is likely to touch $30 billion by 2015 from $15 billion last year, according to an April 2012 report by industry lobby group Associated Chambers of Commerce and Industry of India (Assocham)."It's too early, but our likely (product) mix would be 50% from traditional Indian snacks, both south Indian and north Indian, and 50% from other things like beverages (lassis, milk shakes, fruit juices), ready-to-eat, spices, etc.," Maiya said in an interview. "We started our business selling 56 varieties (of snacks) in 2010-end; now we have 65."MTR, on the other hand, gets a majority of its business from masala powders, spices and breakfast and meal mixes."Snacks is a new area for us and we're still building our presence there. We're currently testing our products in Karnataka. We have internal benchmarks and standards and till the time we beat those, we will not want to expand (in snacks)," said Vikran Sabherwal, vice-president, marketing, at MTR. "In beverages, we have a badam (almond) drink product, but we don't see ourselves becoming a mainline beverage player. Our competence lies in packaged foods and we will put most of our efforts behind that," he said.Maiya expects his new company to triple sales to Rs.120 crore in the current financial year from Rs.30-40 crore last year. MTR expected to close the 2012 calendar year with sales of roughly Rs.430 crore, chief executive Sanjay Sharma said in an interview in October. While he was at MTR, Maiya introduced new product categories in India on a large scale such as ready-to-eat foods and so-called softee ice-creams. He said he plans to do the same—open up new product categories—with his new company. "We're coming out with frozen foods and fruit chips made from jack fruit, mango, apple, banana and pineapple. Another innovation is nanotechnology-based products. For example, buttermilk powder—you just add water and you get buttermilk. It's taken me almost six years to do all this. After leaving MTR, this is all I've been doing," he said. Maiya's company is also significantly expanding its distribution network both within and outside India. The company already exports snacks and beverages to customers in six countries including the US, Germany, Japan and this year, it plans to sell in another 12 countries such as South Korea, China and Canada, Maiya said".

MTR Foods which had established its brand name within India as well as in many other countries, presently owned by a Norwegian company, may find it difficult to prosper in this country having no clue regarding the dietary habits of Indians and this is reflected by the fact that its turn over is stagnating around Ra 500 crore for the last few years ever since it bought out this ethnic food company. No new successful products are emerging from its stables and it is unlikely that it would survive for long. With its erstwhile owner coming to the market with many products similar to that being made by them, MTR Foods may wither away sooner or later. Of course India is a large enough market for many players but only those with their pulse close to the consumer can succeed and former MTR boss seems to have a distinct edge at the present reckoning.    


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