The Hindu Business Line : MTR Foods works the magic

So, what has theatre got to do with food? Perhaps not a lot. But Bangalore-based MTR Foods seems to have hit upon a connection, which it believes is a winning marketing strategy.

For the last year or so, MTR Foods has been sponsoring magic shows and theatre performances to strengthen its brand presence in Karnataka. And what does MTR get in return? Greater brand equity and recall. The company has been using this platform to hold live demonstrations and dole out free samples of its products to people visiting the performances, before and after the show.

Initially, people were sceptical about this idea, but that didn't deter the company's Chairman and Managing Director, Sadananda Maiya, from going ahead.

These shows were initially held on a small scale. Maiya first began renting marriage halls in Bangalore to hold magic shows by magician Uday Jadugar. Later, he started approaching small residential complexes and then ones with bigger apartments where he sensed the perfect opportunity to tap his target market. "Trials are very important for a company like MTR. In all these places and occasions, I establish contact with at least 300-400 people, mainly from the middle class and lower middle class. But this medium has the potential to grow," says Maiya.

The magic shows then slowly moved from Bangalore to other parts of Karnataka such as Mangalore, Udupi and Kundapur. Plans are on to take it to Kerala next.

Then theatre happened. And this time on a much larger scale. From October last year to March this year, 50 theatre shows by the troupe Guru Samsthe, under the guidance of theatre artist Yashavant Sirdeshpande, have been held in various parts of the State, especially in rural Karnataka. This fiscal year, the target is to hold 200 shows, mostly in rural North Karnataka, where the company is "not so strong." Maiya says the "biggest market" in the country is in the rural areas, which are largely untapped.

Four contemporary `social' plays in Kannada are being staged and they have references to the company built into the dialogues.

The approach may be very basic and local vis-à-vis a traditional TV campaign. But Maiya seems to have confidence in this method. He says the company has grown at about 35 per cent and he owes part of that to the success of these marketing initiatives and sampling trials. Maiya firmly believes this strategy will help him strengthen his presence in the South.

He hopes to continue with this marketing initiative for another six years. Plays will be staged for another year in Karnataka, before they move out to other States in the South. However, he is not sure at the moment if he would take this concept elsewhere in the country.

Theatre and magic shows are just an extension of Maiya's firm belief in direct consumer contact. Live demonstrations of products take place not only during these shows, but every day at MTR's `concept store' in Bangalore - Namma MTR - that sells the entire product portfolio. From 3 to 9.30 p.m. every day, dishes are made inside a glass kitchen and served to anyone who walks in asking for a demo. Maiya says there are many visitors, especially on the weekends with over 1,000 visitors.

To tap the young consumers, MTR Foods thought out of the box yet again. It conceptualised one of the plays in the PUC curriculum (Eklavya) onto a DVD and screened it at college campuses. This not only made learning easy for students but also helped etch its brand presence among them. , Maiya believes they are the future consumers of his products. MTR has screened the play in 170 colleges so far since January. The target is to take it to 335 colleges this year.

And it is not as though the company does not believe in traditional mass media advertising. "For the next two months, there will be an advertising burst on regional and Hindi channels. The advertisement campaigns will continue till March, in short bursts of two months each," says Maiya.

Karnataka still continues to be the company's stronghold, contributing about 40 per cent of sales (Rs 135 crore). MTR hasn't made inroads into other markets in a big way. But gradually, Maiya hopes to make the North count as well (currently it accounts only for 6 per cent). About 30 per cent of the company's sales comes from instant mixes, 28 per cent from spices and masalas and 20 per cent from vermicelli. Exports account for 10 per cent, while the rest comes from ready-to-eat (RTE) dishes, ice cream and frozen foods.

Ready-to-eat market

Although MTR Foods has good brand equity in the RTE space, which is estimated to be growing at 25-30 per cent, the company does not enjoy a clear lead with competitors such as ITC Foods muscling into this market. According to Ravi Naware, Divisional Chief Executive, ITC Foods, the company claims a share of 35-40 per cent in the ready-to-eat segment (this includes mass brand Aashirvaad and premium brand Kitchens of India) and is targeting a 50 per cent share in the next couple of years. Obviously, MTR has its task cut out in this segment as well.

But does Maiya see the RTE segment taking off in a big way? Not quite, says Maiya. He acknowledges that his customers for RTE dishes are predominantly working women and travellers and confesses that the clientele for ready-to-eat dishes has not gone beyond that. "That could take another two to three years. But if our RTE products reach traditional homes, then the sky is the limit," says Maiya.

Exports

Overseas, MTR Foods is present in the US, Canada, the UK, Gulf, Singapore, Hong Kong, Japan, China, Malaysia and Thailand. It is doing especially well in Japan, says Maiya. "From 2002 to 2004, we were just sampling our products in Japan before we bagged an order from Costco last year. Six products related to paneer are being sold here, as it is somewhat similar to tofu, which is popular in the country. Japan is the toughest market to get into as it is extremely quality-conscious; if you get in here, it gives an entry to other countries." South-East Asia is a growing market for ready-to-eat dishes, he says.

As for the road ahead, Maiya is quite optimistic (the company hopes to finish 2006-07 with a turnover of Rs 165 crore). There is no way an outsider can run MTR Foods successfully, he says emphatically. Which perhaps explains why he is training son Sudarshan Maiya for the business battleground before he passes on the baton to the next generation.

No sell-off

It was one of the early movers to bite into the instant foods segment in the late '70s with its rava idli and khara baath mixes. Three decades hence, MTR Foods has certainly come a long way. With a huge portfolio comprising 256 products - offering just about every meal solution from ready-to-eat dishes, soups, spices and masalas to instant snack and dessert mixes and frozen foods — one would expect the company to have made great headway. Instead, the company still seems to be finding its feet and warding off frequent reports of a sell-off.

Stoutly denying such reports, the Chairman and MD, Sadananda Maiya, says the company plans to expand and ramp up brand presence.

Well, if there is no such intention to sell, what is the rationale behind appointing the investment banking firm Rothschild? Maiya says the firm was appointed for advice on future partnerships and associations. "Whether they will be strategic or equity partnerships, it has not yet been decided," he says. Push him for a response on reports of J. P. Morgan Chase's plans to exit the company, Maiya says: "Even if it were to quit, it will not happen for another six months to one year at least." "Why will I sell the company when it is doing well?" he asks. He also denies any pressure from investors to sell MTR Foods.

Incidentally, MTR has been divided for convenience in operations. While MTR Foods handles the packaged foods business, Mavalli Tiffin Rooms runs the restaurant. Maiya holds 40 per cent stake in MTR Foods, while Aquarius Group holds 14 per cent; 26 per cent is held by J.P. Morgan Chase. The rest is held by family members.

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