Tuesday, December 05, 2006

MTR : Pure and Perfect

Brand : MTR
Company : MTR Foods

Brand Count : 173

MTR has a history dated back from 1924. The company started of as a small restaurent in Bangalore named Mavalli Tiffin Room(MTR) is now rated as one of the largest players in the increasingly popular ready to eat foods market. The company first launched its packaged food product during 1976 and the company invented the Rava Idly mix which was the first product by the company in this segment.

It was in 2000 that the company seriously ventured into the ready to eat food segment. Although the reports suggest that the ready to eat food segment excluding snack foods and noodles is worth 50 crore and expected to touch Rs 200 crore with in three years time, I am quite sceptical about it. The report was dated 2002 and now in 2006 the market is still hovering in that range.
The reason for such optimistic projection is based on the changing lifestyle of Indians. With both husband and wife working , there is going to be increased need for such convenience foods that save time. Seeing this opprotunity many players like ITC, Satnam Overseas, Saaj food products etc are seriously into the fray . ITC has launched Kitchens of India brand with much fanfare followed by Aashirvaad range in this segment. Kitchens of India is premium and Aashirvaad is for the mass market.
The basic reason for this segment not taking off as expected is the lack of value proposition of the brands. All the brands operating in this segment is priced at a premium. For example a RTE pack typically costs Rs 35 for a serving of Three ( as the pack says ) but those who have used the packs know that only Two can use this because the quantity is very less. Although we can argue about the convenience and cost saving of cooking gas etc, at the outset, the price is a put off for a middleclass customer ( my experience). Another factor is the perception of quality and taste camparison of home made versus packaged foods.
Hence the use of these packs are limited to occassions and emergencies and not for daily consumption. This can be the reason behind the lack of momentum in the growth of the category. But like all new category , it takes time and investment to create this new category which holds immense potential.
Piggybacking on this category is another emerging category of curry pastes. The product offers curry pastes that added with the vegetables/meat and with little cooking can give your favorite curry. The market for this category is estimated to be around Rs 5 crore.

MTR is positioned based on the Purity platform. The product boasts about the rich heritage and the firms committment to quality. The brand is very strong in Karnataka and has a pan India presence. The brand is moving towards offering complete meal solutions to the time starved Indian consumers. The brand faces the typical issue of changing the perception of Indian consumers towards these convenience foods. Another issue is the scope for differentiation.The ready to eat category offers little scope for sustainable differentiation.The market is already crowded with local players and the heavy weights.

source: businessline,mtr.com,agencyfaqs,