BUSINESS

Graduating to super-brand, the MTR way

BANGALORE DEC. 25. During the Emergency period when the quality of rice was not good, MTR Foods Ltd. launched the Rava Idli mix in 1976. Priced at Rs. 8 for a half kg pack, the product provided quality food at an affordable price. Since then, the product range from the processed food firm spans over 20 ready-to-eat products extending to spices and instant mixes.

From a localised brand that centred around a restaurant in Bangalore, the company has captured a commendable market share across India and the overseas market. The company today has a turnover of Rs. 87 crores.

With an emphasis on quality and value for money, MTR has metamorphised into a brand equated with pure food across the country. In an extremely competitive Indian instant foods market, conservatively estimated at Rs.1,100 crores (includes spices, instant foods, vermicelli, ready-to-eat food), MTR has a market share that places it in a leadership position.

Take vermicelli, for instance, MTR is No. 2 in the Indian market after Bambino and in the instant mixes segment, the company enjoys a 60 per cent market share with nearly 90 per cent share in the South Indian market. The reason for this brand dominance has been explained by its Chairman and Managing Director, P. Sadananda Maiya. He says, "Our quality consciousness is reflected in our products which taste the same as home-cooked food. This emphasis on quality has been the key differentiator for MTR with most of our customers being repeat buyers.''

Journey to quality

Started during 1924 as a small restaurant in Bangalore by P. Yajna Narayana Maiya and Parameshwara Maiya, the operation was taken over by the present CMD on the demise of his father. With the launch of the Rava Idli mix, MTR made its foray into the instant mixes segment and in 1983 a full-fledged distributorship was commenced to market this product. In 1986-87, the company expanded its presence to Tamil Nadu and Andhra Pradesh and finally in 1991 purchased a one acre land at Bommasandra (Bangalore) to start its own production facility with an investment of Rs. 50 lakhs.

Today this facility is housed on a seven acre property at Bommasandra where the production of MTR's frozen food range would commence in the near future. With an in-house research and development unit employing 17 chemists and technology sourced from Italy and Defence Research Laboratories, the per day production capacity at the Bommasandra plant works out to 36 tonnes of vermicelli and 100 tonnes of other MTR products.

Armed with HACCP (Hazard Analysis Critical Control Point) and ISO 9002 quality certification, the company has standardised the entire processing system to control hygiene with a bacteria-free environment at the production facility. J. Suresh, CEO and executive director is quick to explain, "We had implemented these hygienic standards earlier itself, but the HACCP required some alterations for the production facility including placement of the kitchen, processing rooms and changing rooms.'' The quality validation has enabled the company to spread its market presence in the U.S. and Europe.

The turn-about

Of the Rs. 87 crore recorded during the last fiscal, 8 per cent of the turnover was from exports. MTR expects to garner Rs.120 crores for fiscal 2003 with 10 per cent from exports, primarily from the U.S. market. From a Rs. 30 crore turnover registered in 1999-00, MTR's turn-about in exports has been supported significantly due to the international quality validation. With plans to focus more on the U.S., European, Middle East and Southeast Asian markets, the processed food company is in talks with several supermarket chains in the U.S. to showcase and sell its products in these outlets.

Moreover, MTR's move to streamline its marketing and distributing channels in 1995 with the aid of Professional Management System, a consultancy firm, has resulted in a stronger domestic presence. This resulted in removing super stockists and direct retailer relationships. MTR now proposes to strengthen its presence in the southern markets of Tamil Nadu and Andhra Pradesh through the Namma MTR shop-in-shop store. This novel concept has direct sampling of MTR's products coupled with floor space that markets the products along with cooking classes for the consumer.

The company has also entered into an agreement with Food World supermarket chain to open a MTR food-court on FW premises. The first experiment has taken off at FW's Malleswaram outlet (Bangalore). This will be extended to FW's chains in Chennai. MTR would also consolidate its presence in other Tamil Nadu markets like Coimbatore, Madurai, Tiruchi and Erode, according to Mr. Suresh. In fact, MTR is banking on the Tamil Nadu market to drive its sales with as much as an estimated 60 per cent growth.