Neti Srinivas, VP Sales and Marketing at Maiyas, elaborates on product innovations, expansion to 20 outlets this fiscal through franchisees, and extending reach across North India.
Tell us about the products that Maiyas launched after 2009 and their current performance.
The first thing that we launched in the processed food segment was the savouries (Indian sweets and snacks). Once we had ended the non-compete agreement with Orkla in 2012, we launched instant mixes and ready-to-eat products. We broadly operate across savouries and snacks with products like soan papdi, which we introduced two years ago and gulab jamoon, which we launched about two months back. We also offer spices, beverages and frozen foods.
Snacks currently comprise 45 to 50 per cent of our turnover, which makes this category our largest moving product; it has been in the market the longest, that is, for almost three years. The other categories are only 18 months old. Instant mixes and masalas give us close to 12 per cent each, and Indian sweets 10 per cent. Beverages give us 12-13 per cent. We launched frozen food about four months ago; the category is yet very small as we are still supplying directly to the market from our manufacturing unit in Kanakpura, and we have to start proper distribution.
Which are Maiyas highest performing regions?
Karnataka, Kerala, Andhra Pradesh and Tamil Nadu are our highest performing states. We have launched our snacks in the north, north-east and the west. We are geographically based in the south and these products, which are authentic south Indian food, are the largest sellers in India. Our brand is like the Haldiram’s of north India. When they launched 15 years ago, they were considered a north Indian product; now they are available in every region across the country. Like them, we are also taking our product assortment across the country
The North-East is a very large market for us, especially for our beverages, sweets and snacks. The only problem is there is no proper distribution channel in the region, so we follow the CNF model for redistributing our products. In the other regions we have our own sales force and offices in Tamil Nadu, Kerala, Kolkata, Andhra Pradesh, Guwahati, Delhi and Mumbai.
Maiyas had recently announced an investment of `120 crore in technology and innovations. Innovations were mainly in our snacks category, wherein we developed a process of removing the oil after frying (which nobody else does), with the result that we have a cholesterol-free, healthier product. We also innovated in our ready-to-eat/ frozen foods. For example, the Mangalore bajji (a popular south Indian snack), can go sour within half and hour. So, we made a batter, which, once fermented, is used to make the bajji and we do not add any preservatives. The result is that we are now able to make the product in large batches, and it is available across more stores. The latest product that we launched is the ragi ball (a Karnataka dish) in a ready-to-eat format.
What are your manufacturing strengths?
All our machines are imported and custom designed. For example, our Kodubale machine is made in Italy, and was originally designed for making Italian dough mix. The Kodubale involves a highly laborious (manual) process of cooking. When we saw the Italian machine, we had to customise it in order to use the required flour mix of wheat and rice. Now we have an incredible capacity to make Kodubale, which is extremely difficult to prepare manually. We also have a machine for making chutneys. However, a lot of these machines are not readily available. We had also invented many machines when we were with MTR.
What’s more, we offer the same products across all regions, and they are truly authentic products. We do not believe in tailoring the products to suit any particular region; we are making the products the way south Indians enjoy them and this has been our USP, and it differentiates us from the competition.
We have a 28,000 sq.ft. factory with separate units for each product category. Our manufacturing capacity is up to 700 crores. Currently, we are a `70 crore company, and we hope to reach `100 crores this fiscal, and `200 crore next year. When we started operations in 2010-11, our total turnover was `3 crore, so it definitely has been a steep climb.
While at MTR, there were close to 600 people involved in various activities from frying to packaging. Now that we have mechanised the entire process, we actually require only 10 per cent of the workforce. Currently, our total factory strength is about 100 people. We are now investing more in creating a strong sales force so as to extend the brand’s reach across the country.
What are the major challenges?
Reach is a major challenge and so is educating consumers. Since we are introducing products for national consumption, it is a challenge to educate consumers from all the regions about our ready-to-eat products and assure them that they are of good quality. We have invested heavily in customer engagement and in creating awareness. For the past one year, we have been going house to house giving cooking demonstrations so that consumers can experience our products first hand. We also have skilled chefs on board.
All our products are packed in carton boxes, which are transported from the factory to a CNF, who redistributes the stock across the country. South India is not a challenge since products can be made available across stores within three days, but the challenge is extending the brand’s reach to north India.
Another issue is putting in place an efficient cold chain for our frozen foods; in fact, we are in the process of setting up our cold storage points across south India, Mumbai and Delhi, all of which have recorded the largest sales. Within Bangalore, we have invested in our own express model for distribution of the frozen foods, which have a shelf life of two years but can extend to five years if you maintain a cold chain below 18 degrees. Our frozen food range is currently available in Hyderabad, Bengaluru, Chennai, Mumbai and Delhi, and we are exporting to Australia, Japan and USA.
Tell us about Maiyas outlets.
Our stores are part retail store and part restaurant, measuring 1,500 to 2,000 sqft, where we display our entire range of over 300 SKUs. This model enables us to showcase our entire range of products as well as the food served in the restaurant. So, in view of branding and creating more equity for our business, this is a brilliant model for us. The genesis of this company is Maiyas Restaurant that started in 2008. Today, it has become a landmark, and is visited by around 8,000 people in a day. We sell about 15,000 cups of coffee per day. Each outlet gives a sale of Rs one lakh per day, and it goes up during weekends. We function as neighbourhood restaurants – in areas where we want to take our cooks to the households to demonstrate our products and drive traffic into the restaurant.
We currently have four such (franchised) outlets, and plan to open 4 to 5 by March and April and 20 by the year end. We have one in Malleshwarm, Indiranagar, JP Nagar and V. V. Puram and our first outlet still stands at the HP campus in Whitefield. These are all standalone, but we may consider opening in a mall if we get the right location.
A franchisee would have to invest Rs 40 to 50 lakhs. We choose the location for the franchise. We are trying to minimise the number of employees; at the restaurant we have a self-service model with 10 to 15 people serving 10 tables and working in shifts, and four in the kitchen. A lot of the food comes from the Jayanagar outlet, which is why the first few outlets that we opened are very close to Jayanagar. Breakeven could happen within 6 months given that a 1,600 sqft outlet would incur a monthly rent of Rs1 lakh. We are looking at expanding in the north as it is a larger market, and are also looking at different ways to popularise the brand.