Orkla India Eyes Double-Digit Growth, Bets on Digital and Convenience Foods

The investors of MTR spices maker Orkla India are not happy with the company's single-digit revenue growth. Since the listing of the Indian subsidiary of Norway-based Orkla ASA, its shares have been on a downward trajectory. Its market valuation has also declined from a listing high of about ₹10,000 crore to just over ₹8,000 crore. The company's Managing Director and Chief Executive Officer Sanjay Sharma has a plan to address this.

"Since the IPO, if there was one thing that the investors are not happy with us is the top-line revenue growth...the time has come for us to deliver what we had promised to the investors," Sharma told Outlook Business. "We are undergoing a cycle at this point in time, but when we come out of the cycle... we have the ability to deliver strong double-digit growth consistently."

Orkla India, which sells spices and packaged food products under its basket of brands including MTR Foods, Eastern Spices and Rasoi Magic, has clocked about 5% compound annual growth rate (CAGR) in its revenue between FY23 and FY26. Sharma blames it on a long period of declining prices of spices in India.

Now, Sharma plans to address this slow growth with a boost to the company's convenience foods portfolio, which he says is "meant to resonate with millennials and Gen Z." But packaged breakfast, meals and desserts are just part of this Bengaluru-based FMCG firm's plan to bring back growth. Orkla India also wants to drive deeper into its existing customer base using digital sales channels and build its South Indian expertise to push more of its products across the top 20 Indian cities.

But before we understand how, let's talk about what's behind the current cycle of growth slowdown.

Spice Deflation

Since taking over MTR Foods in 2007, the Norwegian conglomerate has been able to grow the company in double digits for a long period of time. Between FY15 and FY22, the company's total revenue surged from just ₹573 crore to ₹1,853 crore. In between, the company also expanded its market by acquiring Rasoi Magic in 2011, and Kerala-based spice maker Eastern Condiments in 2021. But post that, the company's rapid growth moderated. It added just over ₹650 crore in the last four years to end with ₹2,509 crore consolidated revenue for FY26.

While analysts blame multiple factors, including a weak demand environment and rationalisation of the portfolio post the acquisition of Eastern Condiments, the key issue seems to be a steep decline in prices of pure spices. According to reports, the deflation was triggered in 2024 by a sharp decline in Indian spice exports, which led to a build-up of domestic inventory.

According to an analysis by agri-business consultant Dr Hanish Kumar Sinha, in June 2024, the average export price of turmeric dropped sharply by 18% in the first six months of that year. Black pepper and cumin prices also plummeted 15% and 20% respectively in the same period. That decline continued in 2025.

"When you're facing that kind of deflation, it's important to pass it on to consumers — because it's very easy to make a powder (spice mix) in your house," the Orkla India CEO says. "When the prices of a commodity fall, we have to mirror that price, and as a result, we've had relatively soft revenue growth."

But he defends their FY26 performance, noting that revenue from product sales grew about 5.7% (excluding other income). Within that, volume grew 5.9%, meaning prices actually fell slightly, by about 0.2%. He points out that FMCG companies typically get a 5–7% boost from inflation-led price hikes in a market like India. "If I deliver 5.9% volume growth and add 5% for inflation, I'd be at 11%, and everyone would say that's a great performance. Without that price-driven boost, you end up with 5.9%."

This deflationary pressure is expected to ease starting FY27, according to a report by brokerage firm ICICI Securities in late December last year. Its analysts expect the spice maker to grow its revenue by 9% CAGR between FY25 and FY28, with the help of its fast-growing convenience foods portfolio and even faster growth in exports to key Indian diasporas.

New Growth Levers

Even as analysts project high single-digit growth for the MTR owner, its MD Sanjay Sharma is aspiring for more. He explains the company's growth strategy in two parts.

"Our first strategy is that whatever are the core local markets that we are in, we want to continue to grow our presence in these. We still have scope for driving penetration. We still have scope for driving frequency of consumption. We still have scope for driving a higher number of products in households," Sharma says.

The company currently makes 65% of its revenue from spices, with a massive market share in South Indian states like Karnataka (31% market share), Kerala (42%), Andhra Pradesh (15%) and Telangana (15%).

"We still have scope for extracting more price through more value-added offerings to consumers. It's a huge market. Still, 60% of the market is unorganised. So there is still scope to continue to organise the market as a whole. And we are continuing to work in that direction," Sharma adds.

Its other major revenue segment is ready-made mixes and ready-to-cook packaged meals, which are growing fast. To expand this, Orkla India wants to focus on its digital commerce strategy.

"Our digital commerce is a four- to five-year-old channel. In 2021, when we came out of COVID, we just started that segment. At this point in time, that has rapidly expanded. If you look at FY26, we delivered about 38% to 40% growth in terms of digital commerce sales. Digital commerce went up from roughly 6.6% of our portfolio to 8.8% of our portfolio," Sharma notes.

To further expand here, the company in Q3 FY26 announced "Project Bolt."

“This is part of a broader effort to accelerate our capability development. As a brand and business, we already have a strong presence, but there is significant headroom to improve further. Digital platforms are particularly strong for new product discovery, especially in convenience foods, where visibility on user screens can significantly boost purchase likelihood," he notes. Adding the project will focus not just on selling their existing portfolio, but also to develop channel-specific SKUs and products.

Sharma says that digital commerce audiences tend to be more affluent, digitally savvy, and largely comprise millennials and Gen Z consumers.

"In cities like Bengaluru, penetration is already around 40%, which is substantial. The top 28 metros contribute nearly 90% of sales, and this is where our focus lies. Strategically, we see two clear opportunities. First, we are positioned as a South Indian food expert—so the aim is to scale these offerings across the top metros. Second, we are investing in convenience-led formats tailored to younger consumers, spanning breakfast, meals and desserts. As part of this, we have recently launched products such as a high-protein dosa,” the CEO adds.

Though the Orkla India CEO recognises that putting products upfront on quick commerce platforms like Blinkit, Instamart or Zepto comes at a cost.

“In general trade, we sell more spices, whereas digital channels skew towards convenience foods, which carry better margins. However, this is offset by higher advertising and customer acquisition spends in digital. As a result, net margins are currently diluted," he notes. But Sharma expects this to be "a short-term impact" and adds that sustained investments in the channel should start yielding benefits over the longer term.

What he expects will further help his cause is a stable consumption environment in India despite geopolitical volatility causing fuel prices and raw material prices to spike.

“If you look at the current Indian business environment, consumption demand is beginning to pick up. The policy measures taken over the past year—such as inflation control, lower interest rates and GST adjustments—are now starting to reflect in the market. In the last quarter, most FMCG companies reported strong performance, and the broader sentiment, which had remained muted for a while, is showing signs of recovery," Sharma says.

Adding that even as the company has rolled out two rounds of price hikes across its portfolio of products in the first two quarters of 2026, consumer sentiment remains positive.