‘MTR working on new distribution models to tackle supply problems’
FMCG major MTR Foods, which waded into the wet batter category almost two months ago, is working on establishing new distribution models that would help with better coverage, which, according to its CEO Sanjay Sharma, the company has been struggling with. Talking about the business so far in the new category, Sharma tells TNIE that the company is facing challenges in every element of the supply chain. “There were challenges in terms of manufacturing, streamlining manufacturing. Largely, the challenge we are seeing is with the ability to supply to the market. We thought we would be able to scale fairly fast, but it took us 4-6 weeks to hit over 5,000 outlets,” he said.
So far with the new range, the company has hit in excess of 6,000 outlets in Bengaluru. The company is looking at building it to be a Rs 100 crore business in 3-4 years. In the first year, Sharma says, “We are looking at about Rs 30 crore.” We are still facing challenges with sales and distribution, he said, adding, “I am not very satisfied the level of availability that we have been able to establish. More needs to be done in improving the delivery models and ability to service the consumer demand.” Digital would be a focus for the company, according to Sharma. “When we started off, 2% of our sales were coming from online. During the pandemic, we saw it go up to 5% and then there was a period in second wave, when it went almost to 9%. In the third wave, it’s come and settled at 4.5-5%,” he said, pegging that in the next 18-24 months, it will go up to 8-10%.
Despite container shortage, exports business, which is about 10-12% of our revenues, has risen during the pandemic, as it was 9% pre-Covid. Sharma, however, says, “Over the last 12-15 months, we have faced significant issues due to container availability and the cost of transporting into international markets.” It has severely impacted the ‘profitability’ of the business, he said. The company has finished over Rs 110 crore of sales in exports in the current year.