MTR: An appetite for growth - by Naresh Kumar Back   Home  
If you are new to Bangalore, and you are anywhere near Lalbagh Front Gate at around noon, a slightly curious sight meets your eyes. Across the street from the main gate, there is a building. At the front of the building, there is a wooden door that is closed.

Just in front of the building, there is a stone bench. And there is a queue of people, sitting on and standing around the bench, occasionally glancing wistfully at the door, quite obviously waiting for the door to open. You raise your eyes to the nameplate above the door and see the sign “Mavalli Tiffin Room”.

Then you hear anecdotes about a senior executive in one of the most respected corporations in India who never eats on Bangalore-bound flights because he is saving his appetite for MTR. Which is when you begin to wonder why there is so much of an aura around a restaurant?

There is some charm to great stories that have beginnings in small places. Parampalli is one such place. It is a sleepy little hamlet in Karnataka, near the more famous Udipi. Few people have even heard about it, even today. Certainly very few would imagine that it has any claim to fame. And yet, as it turns out, it is the birthplace of the founder of one of the great stories of retailing.

If someone had said this to the two young men who were packing their bags in 1924 to go to Bangalore, they would probably have laughed. Ganappaya Maiya and Yajnanarayana Maiya, two brothers, were leaving their joint family, consisting of two more brothers and their mother, to supplement their income through some work in Bangalore.

In Bangalore, they decided to put their primary skill — cooking — to use. Both became cooks, one of them — Yajnanarayana — in the house of a British judge. In the same year, probably in order to get additional income, they started a restaurant near Lalbagh Fort. It was a small place which served coffee and snacks like idlis and was called Brahmin Coffee House. It remained that way for the next 26 years or so.

In 1936, one of the brothers in Parampalli passed away, and Ganappaya Maiya decided to go back. Yajnanarayana Maiya then left his job with the British judge and assumed full charge of the restaurant, and ran it well for the next 14 years.

In 1950, Maiya decided to undertake a European tour to see for himself how restaurants in other parts of the world functioned. Not being very conversant in English, he took a journalist friend along with him to help him overcome the language barrier.

What he saw there opened his eyes. The cleanliness, the preoccupation with sanitation and health — all came as a revelation to him. He resolved that his restaurant would adhere to the same standards of cleanliness and sanitation.

When he came back to India, the first thing he did was to set new standards of hygiene in his restaurant. He gently exhorted customers not to leave food scraps — for example, curry leaves — on the table as they were wont to.

He distributed small booklets on health, proper eating habits and recipes. He introduced the system of sterilisation of kitchen items. He also introduced the system of opening up the kitchen to the scrutiny of any customer who was interested.

In fact, for a long time, customers entered the restaurant through the kitchen, so that by default they saw with their own eyes the hygienic methods of food preparation in his restaurant. He also changed the name of the restaurant to Mavalli Tiffin Room — MTR for short.

After this customers started thronging MTR, curious to experience the place that had ostensibly made a fetish of hygiene. There were other novelty values as well — for example, the restaurant started serving food and water in silver cups. In 1960, the restaurant had to shift to its current premises, near Lalbagh Front Gate, to accommodate the crowd.

In 1968, Yajnanarayana Maiya passed away, and the next phase of the restaurant’s life began. His son, Sadananda Maiya, was studying engineering at the time. The reins of the restaurant were initially taken over by his cousin, P Harishchandra Maiya, and Sandananda used to go to the restaurant merely to help out as a replacement for his cousin between 6 pm and 9 pm.

In 1971, he finished his engineering course, and then the love of food took over. In 1971, he joined the restaurant as an apprentice cook in the kitchen. He worked full-time in the kitchen for two years till 1973.

By his own admission, his stint in the kitchen was the foundation on which his future success was based: it was a period when he learned most of what he knows about food today. He expresses his gratitude to Sreenivas, the man who taught him all he knows about cooking.

Characteristically self-effacing, he draws no attention to his own considerable talent, bordering on the extraordinary, when it comes to cooking. Between 1973 and 1976 the restaurant touched new heights under his stewardship, gaining a reputation for high quality, extremely tasty food, made with the purest ingredients, in the most hygienic manner possible.

In any great story, there are one or two definitive moments in time. In the case of MTR, this was in 1976 when Emergency was declared. The government called five of the most well-known restaurants in the city — including MTR — and told them in no uncertain terms that they had to lower the prices of the food at their restaurant in accordance with government-approved rates, to bring it within the reach of the common man.

The prices of items were to be same in all the restaurants: dosas were to cost 50 paise regardless of whether it was MTR or Udipi restaurant. Some restaurants paid up. Others started compromising on their quality so as to be able to still operate profitably. MTR did neither.

MTR kept the quality of the food as high as ever, and put up a board stating its losses for the day outside its restaurant. It must have been considerable — for example, dosas that previously used to sell for Rs 1.25 were now forced to sell for 50 paise.

To make matters worse, as word spread that the same quality MTR dosas were now available for less than half the price, queues started building up outside the restaurant — sometimes almost 2 km long!

Ironically, the sight that any businessman would love to see sent shivers down the spine of MTR’s owner: as crowds poured in, the cumulative losses grew huge. MTR continued in this fashion for 16 days. On the 16th day, it closed down.

The story might have ended there had it not been for Sadananda Maiya. He realised that this would have serious implications for his staff. He paid them full wages for the time the restaurant remained closed. But since this could not go on forever, he started making and selling mixes for rava idli, a popular delicacy in Karnataka.

For the first 10 to 12 days, he barely sold 1 kg a day. Then sales picked up and he started selling upwards of 5 kg a day. In the meantime, he also opened a small departmental store, which sold provisions, crockery, utensils and cutlery. In November, the Emergency was lifted. Sadanand Maiya did not want to reopen the restaurant again, but intense public pressure made him succumb. The restaurant was reopened, and it continues to flourish to this day.

And this is where it becomes a bit of a conundrum for some retail theorists. Why, they wonder, do queues of eager customers wait outside its doors everyday, long before its doors are opened for business? A meal at MTR costs Rs 75 — not a small amount. The place is squeaky clean, but it is not posh or luxurious — certainly it does not give the impression of being a premium eatery. But one has to have food at MTR to truly understand the MTR phenomenon.

The food is made from the purest ingredients, in the finest traditions of south Indian cooking, and the results are obvious manifestations of the labour of love that has gone into making the food. It is a veritable feast, consisting of some 26 items that are served generously.

Each item is testimony to the widely-held belief that cooking is far more an art than a science. One could take the same ingredients, in exactly the same proportions, and still not have anywhere close to the final taste of an MTR preparation. In short, it is fantastic fare.

And therein lies the key to the conundrum. Service, ambience and so on are differentiators when there is some sort of parity between offerings by different entities. But when the product offering is a high involvement one — as food is — and it is perceived to be surpassingly superior, the add-ons, as long as they meet a certain basic level of expectation, really become second-rung concerns.

What makes the food so special in MTR? Part of the secret is Maiya’s passion for food. One has only to talk to him on the subject of food and to see the joy he exudes when holding forth on his favourite subject.

It is a passion that has its roots in a remarkable depth of his understanding of the role, nature and effect that every ingredient plays in every dish. An example: “In the south, when we make rasam, at the end we heat a little oil in a ladle with a few mustard seeds and a little asafoetida, and pour it on top of the rasam. The reason is that in the olden days, there was no fridge, and rasam used to get spoilt if kept till evening. The oil forms a thin film on top of the rasam, which prevents it from coming in contact with the atmosphere with all its germs. So the rasam does not get spoilt. Asafoetida is added as it helps in digestion.”

Sadananda Maiya is of the view that making any food is not just a matter of throwing together a few ingredients — one has to know the exact proportion, quality and purity of each ingredient, and adjust proportions accordingly in order to get the same result consistently. Even the method of how the ingredients are prepared makes a difference.

For instance, “Chilli powder that is made by grinding invariably has a proportion of powder that has got burnt or charred in the process of grinding. This will affect the final taste. That is why we always use chilli powder that is made by pounding, not grinding, red chillies.”

Maiya spends at least an hour each day even today coaching his apprentice cooks so that the product at the restaurant is as consistent as possible. In spite of this, he avers, some consumers know the difference. “There are some customers who still insist on having dosas only if they are made by me,” he chuckles.

Obviously, such consistent adherence to quality and hygiene standards can come about only with the total dedication of all the employees concerned to uphold the standards that MTR demands. And such dedication can come about only with total employee satisfaction.

MTR is today like a big family. Every employee is given wages that are nearly twice the prevalent norm. They are given free food and ESI facilities. Those who are not eligible for ESI facilities are entitled to medical insurance of upto Rs 1 lakh per year. This meant that MTR would bear any major expenses up to Rs 1 lakh for such employees and their family, including their parents.

Expenses for medical emergencies are also borne by MTR. MTR also bears the expenses of education for employees’ children after they have passed the pre-university course. Maiya is a governing council member of the National College in Bangalore by virtue of his yearly donations (he donates a certain percentage of MTR’s income to the college every year).

The seats that he is consequently entitled to are all given to the deserving children of his employees. The result? An astoundingly low rate of employee turnover. Among the 250 employees today, 17 have completed 50 years of service with MTR. Many others have completed 30-40 years.

Employees aren’t the only ones exhibiting this kind of incredible loyalty. There are customers who have been coming to MTR every single day of their lives for the last 50 years. There is a Friday morning club, consisting of people who had started coming to MTR together many, many years ago, who still make it a point to meet without fail on Friday mornings at 8 am. They don’t even bother to order anything anymore — they just come in and sit down, and their favourite breakfast is served. And they are the last word on quality. Because loyal customers are the lifeblood of any business, as Yajnanarayana Maiya, the original founder, also knew well (in fact, he used to call 10 of his loyal customers every Monday and offer them free lunch).

There is a little footnote here. Remember the rava idli mix? That innocuous beginning, born out of a necessity to keep his workers busy, signalled the start of what is today a multi-crore business — the MTR packaged foods business. From 1976 to 1983, MTR used to sell ever-increasing quantities of various mixes from a little departmental store next to their restaurant.

In 1983, for the first time, they started selling their product in the nine most well-known shopping store chains in Bangalore, such as Nilgiris and Vijaya Bakery. In 1984, it had become a serious business proposition in its own right, and Sadanand Maiya began distributing the packaged foods in Tamil Nadu and Andhra Pradesh.

By 1991 volumes had grown so much that a new plant had to be set up for manufacturing the packaged foods. Over the next few years, additions were made to the range of offerings. Today, MTR packaged foods has offerings in 5 different ranges — spices, instant mixes, ready to eat (RTE) foods, vermicelli and ice creams.

The story of ice creams is an especially interesting one. Maiya noticed that there was a certain seasonality in the demand for his spices and mixes — they fell during the summer months of April to June. To keep his sales steady, he introduced ice cream mixes.

However, it did not take off to the extent that he would have liked. Maiya then hit upon the idea of selling softy ice cream at Rs 18 to Rs 20 per cone. MTR introduced softy ice creams at Rs 10 per cone. For the first six months, he made a loss, and then volumes started slowly climbing. This enabled him to bargain for better rates with his suppliers.

Also, he bought a machine for making the cones, which further brought down his overall cost. He passed on all this cost advantage to the customer, and started selling it at Rs 5 per cone. It became such a huge success that it completely swept the Bangalore softy market, and became the entry weapon for new markets like Goa.

Maiya attributes his success with packaged foods to the unlikely combination of his technical knowhow from his engineering background, and his deep knowledge of food and food-making processes. “The key to success in packaged foods is in the consistency of the end taste. So many things can affect the end taste — for example, rava sourced from different suppliers can result in different tasting rava idlis, unless one recognises the difference and makes corresponding adjustments in the mix. Similarly, a small nut that is loose in the wafer making line can cause wafers to spoil quickly, since air comes in contact with the potatoes while making the chips.”

Today, MTR is an institution in Bangalore. The best part is that it has not yet realised its full potential. And it is largely due to one perfectionist who realised that cutting corners only takes away the edge.
Published in Business Standard, sent by Mr.Uday Kiran M.

The writer is brand strategist with Momentum Strategy Consultants, a four-year-old brand consultancy based out of Mumbai and Bangalore. He can be contacted at first of the series appeared on May 21 and profiled Santha Paint House, a paints and paints accessories retailing store in Thiruvananthapuram, Kerala. The second appeared on June 4, and profiled Dayaram Santdas, a petrol pump in Mumbai. The third appeared on June 18, and profiled Saravana Stores, a discount store in Chennai. These profiles are the by-products of research by Momentum Strategy Consultants.