Five years after he exited the ready-to-eat foods market, which he helped grow into a multi-crore industry, Sadananda Maiya, founder of MTR Foods, is all set to reenter the segment.
Known as the father of India’s ready-to-eat foods market, Sadananda Maiya exited the sector in 2007 March after selling MTR Foods to Norwegian industrial conglomerate Orkla Group for Rs 300 crore. After a five-year no-compete clause between him and MTR Foods expired in April this year, he is now gearing up to storm back into the fast-growing market.
India’s ready-to-eat foods market is now worth around Rs 800 crore and is growing at an average 15 per cent year-on-year.
According to Sadananda Maiya, the market is now much more mature than the early years. But there are not enough “focussed and specialised players” in this segment, and therefore, it opens up opportunities for new entrants.
The 63-year-old businessman, son of Parampalli Yajnanarayana Maiya, who founded the iconic MTR Restaurants chain in 1924, parted with the family’s restaurant business to launch MTR Foods in 1994.
MTR Restaurants is currently headed by Hemamalini Maiya, daughter of Yajnanarayana Maiya’s nephew Harishchandra Maiya.
After selling MTR Foods in 2007, Sadananda Maiya set up Maiya’s Beverages and Foods, which now runs two restaurants under the ‘Maiya’ brand.
He is now busy drawing up an aggressive plan to tap the potential of the ready-to-eat foods market. Maiya’s Beverages and Foods is building an expansive fully automated factory near Bangalore, spread over 20 acres, at an investment of around Rs 60 crore.
According to the business plan, Sadananda Maiya will first roll out a range of spices and then instant mixes to the market under the Maiyas brand. Ready-to-eat foods and frozen foods are next in the line-up.
“We are ready with around 80 SKUs (stock keeping units) and will touch the 300-SKU mark within a year,” said Sadananda Maiya, who has also carried out intensive research on how to make the products better with imported technologies.
Honoured with a doctorate in food technology, he has been working on customising various machines and fine-tuning the tastes of products for the past couple of years.
MTR Foods, the company which once he helped become one of the market leaders in the country, will be his main competitor. MTR Foods has a stronghold in the ready-to-eat foods, instant mixes, spices and frozen foods market with a share of close to 50 per cent, while other players such as ITC Foods, GRB Group and Haldiram’s are working on shoring up their shares.
One of the crucial differences Sadananda Maiya is planning to bring to the market is the freshness of the products – especially the spices. “Out of the 20 acres of land we have (in Bangalore), nearly half will be used for captive cultivation of vegetables and essential ingredients for our range of products. Sometimes in an off-season, the ingredients are not up to the mark, and so, we are taking this route. In addition, to ensure constant supply of ingredients, we have gone in for captive farming as well,” he added.
Maiya’s Beverages and Foods, in addition to the ready mix, spices and ready-to-eat segments, is keen on betting big on the frozen foods segment, which according to Sadananda Maiya, is expected to grow exponentially in the years ahead. “When we started MTR Foods earlier, the cold chain logistics network in the country was poor and it’s now an established business. That network will further strengthen as modern retail is taking off,” said Maiya.
In addition to such networks in India, there is a major demand in global locations for our products, where the cold chain network is sturdy. We are already getting inquiries from Australia, Japan, the US as well as from London,” he added.