Bengaluru: A year after Bengaluru-based packaged foods company, Maiyas Beverages and Foods, raised ₹ 100 crore in funding, it is launching new products and streamlining its existing portfolio, as it seeks to outdo cross-town rival MTR, said a top executive at the four-year-old firm.
“MTR took 25 years to make ₹ 100 crore, I made it in two years," said Sadananda Maiya, founder and managing director of Maiyas Beverages and Foods.
Eight years ago, Maiya sold his 40% stake in MTR Foods Pvt. Ltd, a company he founded, to Norwegian food maker Orkla ASA for ₹ 350 crore.
He invested most of the proceeds, including ₹ 60 crore on setting up a manufacturing unit, in Maiyas in 2012.
At Maiya’s office in South Bengaluru, overlooking a large temple, there are piles of trays with snacks ready to be test-marketed. Namkeen pops, bhelpuri bars and an Indian version of a trail mix (popular in the US as a mix of oats, rice flakes and nuts) are some of the 20 new products that will be pushed in the market over the next three months.
Maiya says he is responsible for product ideation “just like I was at MTR".
Maiya anticipates that the future of snacks will be dictated by convenience.
“We are coming out with new concepts suitable for consumers on the go and for those who are time-strapped," he said.
Changes at the four-year-old company come in the wake of it raising ₹ 100 crore from Ascent Capital in 2014. The promoter-run organization is now seeing more layers of professional management.
Maiyas has hired marketing consultant Harish Bijoor to help with brand building and rationalization of products. The company has also roped in senior employees from firms such as Jyothy Laboratories Ltd, Britannia Ltd and chocolate maker Ferrero India.
Apart from bringing out new products, Maiyas will trim its portfolio too to focus on better margins and core brands, a strategy followed by the likes of Britannia. So far, the portfolio has been cut down by a fourth—from 365 stock-keeping units to 90—in an attempt to do away with products that are not moving.
“We want to stabilize this portfolio and then move forward," Maiya said.
Currently, the ₹ 96-crore company sells products such as butter murukku, rice kodubale (a popular snack in Karnataka), packaged rasmalai, badam milk, rava idli mix, among others, largely targeting the southern states, parts of Maharashtra and the National Capital Region.
Over the next five years, Maiya plans to take the company’s revenue to ₹ 500 crore.
Though he remains tight-lipped about future sources of funding, according to two people familiar with the company’s plans, another round has been authorised to fund expansion of new products and marketing expenses.
“There is a lot of scope for regional packaged food companies because of diverse food palates and preferences of Indian consumers," said Ankur Bisen, senior director, retail and consumer at Technopak Advisors, a consultancy. “However, product innovation will be key."
According to a 2014 report by ratings and research agency Crisil, regional food and beverage companies such as Balaji, Haldiram’s and Bikano have increased their market share from 20% in 2008 to 30%. The number is expected to expand to 40% by 2019. At ₹ 1.2 trillion, food and beverage companies account for 50% of the country’s fast-moving consumer goods market.
The Indian snacks industry alone expanded nearly six times to ₹ 47,000 crore in 2013 from ₹ 8,000 crore in 2004, according to market researcher Nielsen India.
Clearly, Maiya wants to take a bite out of that opportunity. “Actually we want to grow very fast now... we have everything ready, the only thing left is take-off."