IPO-bound MTR parent Orkla bets on ‘local’ as rivals go for national play
Norwegian firm Orkla, which owns packaged food and spices brands MTR and Great Eastern, is raising over ₹1,600 crore in a public listing next week. MD & CEO Sanjay Sharma said the company will focus on catering to local tastes and preferences as it expands MTR and Great Eastern into new categories.
Mumbai: Norwegian conglomerate Orkla, which owns ready-to-cook and spices brands MTR, Great Eastern and Rasoi Magic, will stay focused on growing its brands in their home states and catering to local consumer preferences as their primary driver of growth, Orkla India's chief executive officer Sanjay Sharma said.
“Unlike large companies that tend to take their brands across multiple nations… we believe in ‘local’," Sharma told Mint. “Even in Europe we’ve seen that tastes between Norway and Sweden change, even though they are very similar in culture."
Sharma said Orkla's success has been in recognizing growth opportunity in India’s foods business by accepting that the country is a collection of many cultures that must be addressed with individually tailored brands, rather than attempting to build a pan-India national brand.
“The business model we have implemented in India is pretty similar to the model we ran in Europe as well," he said. “In the Scandinavian region, our business has been a collection of family-run businesses. We realized that family-run businesses are local in nature and meet consumer needs much more efficiently and in an agile manner than larger companies. I think this is because they are more intuitive and they understand the local consumers very well, they’re more connected to the consumers."
Orkla entered India in 2007 by acquiring Karnataka-based foods and spices brand MTR Foods from the founding family; in 2020, it acquired Kerala-based spices brand Great Eastern founded by the Meerans.
Next week, the company will launch its public issue worth ₹1,667.54 crore; all of it is an offer for sale in which shareholders Orkla Asia Pacific Pte, along with Great Eastern founder Navas and Feroz Meeran, will offload shares. In FY25, Orkla India recorded revenues from operation worth ₹2,394.7 crore, up 1.7% year-on-year while profit after tax was at ₹255.7 crore, up nearly 13%.
The competition landscape
Orkla India remains focused on the southern Indian markets, where MTR and Great Eastern are strongest, even as large consumer packaged goods companies such as ITC and Tata Consumer attempt to build national brands in packaged spices and ready-to-cook segments.
In 2020, ITC acquired east India-based spices brand Sunrise Foods for ₹2,150 crore. Sunrise is dominant in Assam and has grown in West Bengal as well, ITC Foods’ executive director Hemant Malik told Mint earlier this year.
ITC also sells spices nationwide under its Aashirvaad brand, best known for packaged atta (wholewheat flour). In 2023, Dabur Ltd acquired north India-focused Badshah Masala, while Wipro Consumer Care acquired Kerala-based spice brand Nirapara a year earlier. Tata has been selling spices under the consumer staples brand Sampann for a decade; it also sells spices under private label brand bb, owned by BigBasket.
India’s packaged staples market was worth ₹3.7 trillion in 2024 and is set to grow to over ₹6 trillion by 2029, Orkla said in its IPO documents. Much of the growth in spices comes from customers converting from unbranded, loose spices sold in markets to branded, packaged goods and from focusing on getting a share of customers' daily consumption, Sharma said.
While Orkla has expanded MTR from Karnataka to neighbouring Andhra Pradesh and Telangana, it took more than a decade for the brand to get a foothold in those markets, he added. Acquisitions will remain important to Orkla's growth strategy.
“We generate about $3-4 billion rupees in cash a year, of which we keep aside some amount for growth-oriented initiatives, including acquisitions," Sharma told the press in a media briefing in Mumbai.
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