Norwegian investment firm Orkla stated that India’s food tastes align with those of certain European countries. However, the Indian market is more intricate and competitive due to a growing preference for branded spices.
The consumer goods supplier owns MTR and Eastern Condiments, with three-fourths of its sales coming from the southern states.
“In India, engaging the consumer is more challenging than in European markets that we are familiar with. The competitive environment is more intense. “Just as there are significant differences between Italian and Scandinavian cuisines, similar distinctions exist between South India, East India, North India, and even more nuanced regions,” stated Atle Vidar Nagel Johansen, CEO of Orkla Foods Europe. “We have defined the role of each portfolio company within Orkla, and India is certainly categorized as ‘grow and build’.”
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While the spices market in India is valued at over INR 90,000 crore, only a third of it comprises branded products. Among organized spice brands, Everest holds the top position, closely followed by MDH. Additionally, in the segments of masala, herbs, and spices, domestic players like MTR, DS Foods, Ramdev, and Eastern maintain dominance in specific regions. Nevertheless, other FMCG companies are increasingly establishing their foothold in both spices and ready-to-cook categories.
Two years back, Dabur acquired a 51% stake in Badshah Masala for INR 588 crore, while ITC completed an all-cash acquisition of spices manufacturer Sunrise Foods four years ago, valued at INR 2,150 crore.
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With sales reaching INR 2,300 crore in the last calendar year, MTR derives approximately 70% of its revenue from spices. “The significance of spices in the Indian kitchen far surpasses what we see in European markets. The spice consumption here is much more developed and diverse. While the shift from unorganized to branded spice markets may take some time, the trend is evident. As suppliers, our focus should be on promoting our brands and meeting consumer expectations,” Johansen further commented.
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The company consolidated its Indian operations last year under a single business entity, Orkla India, comprising three business units: MTR, Eastern, and International Business (IB). This restructuring aimed to harness their collective business capabilities and foster accelerated growth. Orkla initially ventured into India in 2007 through the acquisition of MTR Foods. Approximately four years ago, it further expanded its presence by acquiring a majority stake in Kerala-based Eastern Condiments.
Unlike other FMCG companies aiming to expand into new states, Orkla has chosen to concentrate primarily on southern India. “Our goal isn’t to capture the entire Indian market but to excel in the states where we operate. We emphasize local growth and the development of local brands. Therefore, with MTR, our focus is on Karnataka and Andhra Pradesh, and with Eastern, we concentrate on Kerala,” stated Sanjay Sharma, CEO of Orkla India.
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