What is Orkla Foods India experiencing regarding commodity prices?

Orkla Foods India is navigating an unusual two-year commodity deflation cycle where input prices have dropped significantly, impacting value growth despite strong volume increases.

How is digital commerce impacting Orkla Foods India's sales?

Digital commerce is a key growth driver, particularly for the breakfast category, with e-commerce sales rising about 45%.

What is Orkla Foods India's growth strategy for international markets?

The company is strengthening its international business, particularly in the GCC, by expanding its reach to Arab consumers with an Arabic spices portfolio and establishing itself as a leading Indian spice brand.

Home / Business and Economy / Spice Giant Orkla Navigates Price Drop Despite Volume Surge

Spice Giant Orkla Navigates Price Drop Despite Volume Surge

15 Feb

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Summary

Commodity costs declined nearly 30%, impacting value growth.
Digital commerce drove 45% growth in breakfast category sales.
International business grew 16.4%, expanding beyond diaspora.

Spice Giant Orkla Navigates Price Drop Despite Volume Surge

Orkla Foods India, owner of MTR and Eastern brands, is navigating an unusual commodity deflation cycle that has compressed realisations over the past two years. CEO and Managing Director Sanjay Sharma noted a significant drop in input prices, with commodity costs falling by nearly 30% and chilli prices by approximately 50%. This deflationary environment has weighed on value growth, even as volumes in spices increased by 10.1% in the recent quarter, while value growth was only 3.1%.

Convenience foods continue to be a strong performer, with breakfast and meals showing robust double-digit growth. Digital commerce has become a crucial growth engine, especially for the breakfast category, which saw approximately 45% increase in e-commerce sales. Geographically, growth is widespread, with North and West India outperforming traditional southern markets, indicating successful expansion.