Five years after Bangalore-based MTR Foods was acquired by Norwegian foods group  Orkla Brands International  for about $100 million (approx Rs 430 crore then), the Indian breakfast mixes, spices and snacks maker is in no hurry to bring in Orkla’s products such as frozen pizzas and chocolates to India. In Delhi to announce the launch of meal mixes under the Rasoi Magic brand, MTR Foods CEO  Sanjay Sharma  told ET that the eight-decades-old firm is looking for local buys and doubling spends to compete with rivals like Britannia. Excerpts:

Orkla operates in many categories like frozen pizzas, chocolates and confectionery. But we have decided not to bring in Orkla brands into India, at least in the next few years. That’s because we believe MTR is still quite an under-leveraged brand. We need to create a lot more value for MTR first.

But other processed foods companies like Britannia and McCain are betting big on packaged processed foods…

We will invest in these categories depending on how they evolve. Take frozen foods-maybe 0.1% consumers in India buy frozen foods. The category has a long, long way to go. Compare that with spices-branded spices itself is a Rs 8,000-crore business. This is the big space for us right now. Meal mixes is another category we are bullish on. It is nascent-at about Rs 60 crore now, but we expect it to triple by 2014. Internal estimates suggest that the category can grow at a CAGR of 45% in the 2012-14 period.

Breakfast mixes-one of your core categories-has become crowded with multinationals, Indian brands and private labels. How are you coping?

We are going aggressive on advertising, for one. We’ve doubled ad spends. From a ratio of 8% to sales last year, our spends have gone up to 16% of sales.

You’ve recently forayed into packaged snacks in Bangalore. When are you scaling up the category?

We are testing ready-to-eat ethnic snacks in Karnataka. The category is still under development. Our aim is to develop ethnic snacks for specific markets. A pan-India presence in ethnic snacks could take us 5 years.

source: http://www.articles.economictimes.indiatimes.com / Home> Interview> India / by Ratna Bhushan / ET Bureau / July 25th, 2012