Bangalore-based MTR Foods, which started out as a regional player with sole focus on the Southern region, has over the years grown its geographical presence to have a national footprint. The instant foods manufacturer has extended its culinary expertise to the ‘ready to cook’ processed foods category and launched a range of meal mixes under the Rasoi Magic brand to further amplify its national presence.
Rasoi Magic is a significant player in the meal mixes segment in the western part of the country, which was acquired by MTR Foods last year. Priced around Rs 40, the range of 21 meal mixes are targeted towards the high end consumers; the SEC A and B segments.
On the reason behind foraying into this sub-segment of packaged foods, Sanjay Sharma, CEO, MTR Foods explains that unlike earlier times when the Indian homemaker was wary of experimenting with packaged and processed foods. However, they are now more accepting and open to using cooking solutions, which would reduce their time in the kitchen, and at the same time also give them control over the final outcome.
The extension in MTR’s product portfolio is also led by the underlying potential of the meal mixes category in India. Valued at Rs 60 crore in 2011, meal mixes is a nascent and evolving segment, which is expected to grow at a CAGR of 45 per cent in the 2012-2014 period, according to MTR.
This explains the increasing number of FMCG players entering the packaged foods category with their own, differentiated offerings. Rasoi Meal mixes will be competing with the likes of Unilever, with its Knorr range of recipe mixes, Parampara’s home-cooked meals, Nestle’s ready to cook foods, and Chef Sanjeev Kapoor’s spice mixes, to name a few.
For MTR, the ‘ready to cook’ segment currently commands roughly three per cent of the brand’s entire product portfolio and with this latest launch; this number is targeted to increase to around eight to 10 per cent by 2015. At the national level, MTR enjoys a 25 per cent market share in this product category and hopes to scale it to 40 per cent in the next three years.
Eyeing the kids segment
Lately, MTR Foods has been at the helm of many such launches and initiatives, which are lending the brand greater visibility and mind recall. Last week, it ramped up its presence in the malted food drinks space and repositioned its Badam Drink Mix as a kids’ drink, apart from introducing a new chocolate flavour in the milk enhancing additives segment. To drive awareness and connect among its young TG, the company has also tied up with Fox Star Studios for the upcoming Ice Age 4 movie franchise.
For a brand known for its masalas and meal mixes, isn’t the launch of kids-centric products a detour from its core positioning? According to Sharma, this repositioning has been led by the mismatch between the perceived target audience for MTR’s Badam Drink and the actual consumers of the beverage. “Badam Drink is a traditional South Indian drink and was targeted towards the older population. However, research has revealed that 80 per cent of the drink’s sales come from children,” he says.
Sharma goes ahead to add that this is only a one-off product for children and the company has no plans of launching any more products centering on the younger audience.
From a regional presence to a national appeal
On the strategy that the brand has followed to grow from a Southern brand to a more national appeal, Sharma says that while the company moved over to the national space in the early 2000s, it was only a few years ago that MTR created a national level strategy.
He explains that there was a dichotomy that existed because of the brand’s presence across a wide spectrum of product categories. While certain products in its portfolio like masalas and spices had a more regional appeal, deep penetration and targeted the lower rung of the customer segment; SEC C,D and E, there were also products like meal mixes and the ready to eat range, which were meant for the upper end consumers. It was only in 2010 that MTR created a three pillar strategy and focussed its operations on three key areas; spices and masalas for the regional market, mixes for a national presence, and snacks.
Currently, it has product offerings in all segments; breakfast, meals, snacking, and desserts and nine food categories in total, which include spices and masalas, ready mixes, ready to eat meals, beverages, pickles, ice-creams, and traditional south-Indian snacks (launched in Karnataka recently).
MTR Foods claims to enjoy a dominant share across most of the segments it operates in. It claims to be holding the numero uno position in the ready mixes category with around 45 per cent share. Its range of spices competes with local, regional players and has a market share of 31 per cent in Karnataka and 14 per cent in Andhra Pradesh; the two markets it operates in.
This change from the product and geography perspective has also been accompanied by an increase in investments in advertising and marketing. Sharma agrees that till a few years back, MTR lacked aggression in marketing the brand, which was essentially because of its divided focus across nine categories. With a mere three per cent of sales devoted to marketing, MTR has doubled its spends, and 2011 saw the company spend eight per cent of its sales on marketing, which has been further scaled up to 16 per cent for this year.
Vikran Sabherwal, VP, Marketing, MTR Foods goes on to explain the brand’s strategy and says that while conscious efforts have been made to build the brand nationally, it will continue to focus significantly on its home market, the Southern region, which provides the bulk of its sales. While MTR has made deep inroads into the South market, and covers smaller towns and villages, it is present in the top 150-200 towns in the country and plans to limit its focus on the urban cities till the brand has created the same connect as is enjoyed down South.
As part of its strategy to modernise the brand, MTR Foods will be pursuing aggressive marketing and communication initiatives, both nationally and regionally. For Rasoi Magic, besides using the television and print platform for a mass reach, the brand will also organise sampling activities and demonstrations across modern trade outlets. Sabherwal adds that there will be higher spending towards the ATL (Above the Line) marketing campaigns. Though he refused to divulge details about the relative media spends, 40 per cent of the projected sales have been set aside for marketing this new product.
According to Sharma, the digital platform will also form a major chunk of the brand’s marketing initiatives and video demonstrations are being created to help the customer in understanding the usage of the products.