Norwegian food major sees potential in India through the multi-local model

When the Norwegian food major Orkla acquired MTR Foods Ltd, little did it realise that its unique multi-local model would help the Indian company grow 2.8 times since acquisition, to a turnover of over ₹494 crore (Norwegian Krone (or NOK) 500 million) in 2013.

MTR retains its vegetarian identity as well as its heritage food status, and has managed to make inroads in several countries.

Orkla, one of Norway’s oldest business conglomerates, .has progressed into a food major with a NOK 33 billion turnover and is the top branded consumer goods company in the Nordic region. One of its major strategies is to acquire heritage food brands across the world and further develop them, while retaining the local flavour. MTR is one such brand.

Modus operandi “Orkla follows a unique model of operation called the multi-local model. Under this model, each operating company is free to choose its own strategy,” said Sanjay Sharma, CEO, MTR Foods, speaking to Business Line .

For the Norwegian major, India has the largest long term growth potential.

It is a good fit with the multi-local model as the country is home to a series of individual markets, and local knowledge ensures that scale can be achieved.

Stating that the organised spice and masalas market is valued at around ₹6,000 crore, of which half is masalas , Sharma said, “MTR is a leader in Karnataka and Andhra Pradesh, and has a number three position in Tamil Nadu.”

He added that the company has a “unique process of pounding our masalas which makes us different from the other manufacturers. Most masala manufacturers grind the masalas .”

Other brands The branded spice space is dominated by national brands such as Catch, Everest, MDH, Ramdev, among others, and they constitute more than 30 per cent of the branded space.

Most of these brands have focused on product packaging, product customisation to local taste, and positioning around quality, and have also ensured innovative marketing strategies.

Though the category focus at MTR is blended spices, the company has ventured into instant mixes (which caters to breakfast, meals, and desert), ready to eat South Indian snacks, pickles, beverages, and vermicelli. Maintaining that vermicelli and pasta are big markets in India, Sharma said it is valued at around ₹500 crore.

With the market growing in single digits, MTR’s “vermicelli is mainly sold in the domestic market, with some exports to countries like the US,” added the CEO. MTR has over 1.65 lakh retail outlets in the country, even as its products are exported largely to Indian expatriates.

COMMENT NOW