MTR Foods plans foray into e-commerce by Q3FY16

Household name in instant food mixes, ready-to-eat is also expanding product portfolio

MTR Foods Ltd, the Bengaluru-based instant food mixes and ready-to-eat food products maker, is eyeing the fast-growing e-commerce market to expand reach. The company is currently building its own online store, which will be launched by the third quarter of this year.

“We have 350 products in our portfolio as of now and in any modern retail outlet, one can buy 80-100 products. So, we have decided to create our own online marketplace to enable our customers access all our products and place an order,” Sanjay Sharma, chief executive officer, MTR Foods Ltd, said.

He said the company had partnered a technology provider to build its own online store. The details of the delivery model was being finalised in consultation with the technology partner.

“We are investing around Rs 50 lakh in the e-commerce foray and working out the modalities for it,” Sharma said.

Already, MTR Foods’ range of products are available on Bigbasket.com, Amazon and LocalBanya.com. On Bigbasket.com alone, the company generates orders worth Rs 8 lakh a month.

“To begin with, we will test market our products through our online store in the Bengaluru market and slowly extend it to other metros and major cities. We expect to generate 6-8 per cent of our sales through the e-commerce platform in the next few years,” Sharma said.

The company’s products are available in about 110,000 sales outlets in Karnataka and 180,000 outlets across the country. Each of these sales outlets typically stock about 80 products and the company sells its products under one roof at its own ‘Namma MTR’ stores in Bengaluru.

The launch of an e-commerce platform is part of MTR’s expansion plans. The company, which was taken over by the Norwegian Orkla Group in 2007, has trebled its turnover to Rs 600 crore in the seven years since at a compound annual growth rate of 18.5 per cent. It is now looking to double its turnover in the next five years through an expansion plan that involves widening its product mix, entry into newer geographical territories and exports. Currently, it generates 10 per cent of its turnover through exports.

MTR Foods is largely focused on three southern states of Karnataka, Andhra Pradesh and Tamil Nadu where it generates close to Rs 500 crore turnover. It is now in the process of expanding its product portfolio by adding 8-10 new products every year.

After the acquisition of MTR Foods, Orkla has invested a further Rs 150 crore to add production facilities at its Bommasandra factory on the outskirts of Bengaluru.

“We are constantly investing to expand and modernise our facility. Every year, we invest Rs 30 crore to Rs 40 crore in expanding facilities and adding new products. We will continue this investment journey in the coming years to maintain our growth rate. Henceforth, we are looking to grow around 20 per cent year-on-year,” Sharma added.