MTR Foods plans foray into e-commerce by Q3FY16

MTR Foods Ltd, the Bengaluru-based instant food mixes and ready to eat food products maker, is eyeing the fast growing e-commerce market to expand its reach. The company is currently building its own online store, which will be launched by the third quarter of this year.

"We have 350 products in our portfolio as of now and in any modern retail outlet one can buy around 80-100 products. So, we have decided to create our own online marketplace in order to enable our customers to access all our products and place an order," Sanjay Sharma, Chief Executive Officer, MTR Foods Ltd said.

He said the company has partnered with a technology provider to build its own online store. The details of the delivery model is being finalised in consultation with the technology partner, he said.

"We are investing around Rs 50 lakh on the e-commerce foray and working out the modalities of it," Sharma said.

Already, MTR Food's range of food products are available at Bigbasket.com, Amazon and LocalBanya.com. On Bigbasket.com alone, the company is generating orders worth Rs 8 lakh a month. "To begin with we will test market our products through our online store in Bengaluru market and slowly extend it to other metros and major cities. We expect to generate at least 6-8% of our total sales through e-commerce platform in the next few years," Sharma said.

Presently, MTR Food's products are available in about 110,000 sales outlets in Karnataka and 180,000 outlets all across the country. Each of these sales outlets typically stock about 80 products and the company sells all its products under one roof at its own 'Namma MTR' stores in Bengaluru.

The launch of an e-commerce platform is part of MTR's expansion plan. The company, which was taken over by the Norway-based Orkla Group in 2007, has trebled its turnover to Rs 600 crore in seven years with a compounded annual growth rate of 18.5%. It is now looking at doubling its turnover in the next five years through an expansion plan that involves widening of its product mix, entry into newer geographical territories and exports. Currently, it generates 10% of its turnover through exports.

MTR Foods is largely focused in three southern states of Karnataka, Andhra Pradesh and Tamil Nadu, where it generates close to Rs 500 crore turnover. It is now in the process of expanding its product portfolio by adding around 8-10 new products every year.

After the acquisition of MTR Foods, the Norwegian food giant Orkla has invested further Rs 150 crore to add production facilities at its Bommasandra factory on the outskirts of Bengaluru.

"We are constantly investing to expand and modernise our facility. Every year we are investing around Rs 30 crore to Rs 40 crore to expand facilities and add new products. We will continue this investment journey in the coming years so as to maintain our growth rate. Hence forth, we are looking at growing around 20% year on year," Sharma added.