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iD Fresh sees demand for whole wheat parota apart from signature idly-dosa batter in lockdown; Co-Founder PC Musthafa

Work-from-home culture increases demand for filter coffee. iD Trust initiative, under which products are dropped off at apartments without asking for payment, growing in popularity.

July 16, 2020 / 03:29 PM IST

“I can tell you ‘fresh’ always sells. One just needs to crack the model,” says PC Musthafa.” Figures do support what the Co-founder and CEO of iD Fresh Food says “from experience”.

Even after scaling down operations and providing only essential products during the initial lockdown period, iD Fresh Food has clocked in Rs 88.30 crore in sales during March-June 2020. In comparison, the company’s sales stood at Rs 73 crore during March-June 2019.

The company sells various packaged ready-to-cook (RTC) products such as idly-dosa batter, parotas, vada batter, chapati and paneer, among others, to more than 30,000 retail outlets, under the brand iD Fresh.

“Of course, the challenges we had to overcome during the initial lockdown period were even greater,” Musthafa told Moneycontrol in an interview.

“Right from procuring raw materials to supporting business continuity to the farmers to delivering products to COVID-19 hotspots, the pandemic has taught us invaluable lessons,” he said.

Now, for some lockdown trends

With more people working from home, iD Filter Coffee sales have doubled, followed by an increase in ready-to-cook foods like iD Chapati and Malabar Parota.

Whole wheat parota has found favour with customers, especially with the health-conscious ones. It recorded three times sales over the last three months (April-June 2020 against April-June 2019.)

Since the lockdown was first announced, the company has seen a surge in demand for almost all products. The maximum demand was for idly and dosa batter. On an average, iD Fresh sold around 65,000 kg of idly-dosa every day.

Musthafa said that the company saw a lot of new customers opting for idly-dosa batter across cities, indicating a perceptible shift from local unbranded players to trusted food brands.

Let figures speak

iD Fresh clocked sales of Rs 23.8 crore in March 2020, Rs 20.6 crore in April 2020, Rs 21.6 crore in May, and Rs 22.3 crore in June 2020.

While the sales in March 2019 was Rs 18.8 crore, in April 2019, it was Rs 17.56 crore. Sales for May and June (both 2019) were Rs 17.75 crore and Rs 18.78 crore, respectively.

Overall, the company’s revenue was Rs 240 crore in FY 2019-20. In FY21, iD Fresh Food is targeting over Rs 400 crore.

In tie-ups lie the success recipe

Collaborations with online players such as Swiggy, Big Basket, and Supr Daily helped to cater to growing customer needs. “Our focus has been to cater to the growing demand – even in the worst-hit pandemic areas.

“Data for the last three months shows that iD had the highest penetration in the worst-hit cities -- Mumbai, Chennai, Hyderabad, Pune and Bengaluru,” Musthafa added.

iD Trust Shop

iD Trust Shop 2.0 and iD Store Finder are two initiatives the company started during the pandemic – on June 25, 2020.

The company had first launched the Trust Shop model, in 2016 wherein customers could take products from iD chillers-unmanned by sales personnel and with no CCTV cameras- installed at 37 apartments across Bengaluru, Mumbai, Chennai and Hyderabad. iD trusted customers to drop off the money in a cash box attached to the chiller

iD Trust Shop 2.0 is an on-ground direct-to-consumer delivery of iD products to apartment complexes in COVID-19 hotspots of Mumbai, without following up on payments on any of their orders.

“We have reached out to over 350 apartments and close to 10,000 households through this initiative. Our sales team drop off iD products at the apartments and leave without asking for payment. Our endeavour is to trust our customers during these trying times so that they trust us back,” said Musthafa.

Here is how it works. The customers don’t need to step out of their  apartment complex to get hold of iD products. The Fresh Food Buddy (co-ordinator from the apartment complex) places the order with iD and within 24-48 hours, the delivery personnel drops the products at the security gate of the apartment complex and leaves. iD trust the customers to make the payment via e-wallets later through a link. There are no sales personnel or CCTV cameras to hold one accountable and zero verification on who has taken the products.

The company has been receiving many requests and soon iD will launch in other cities as well. At the peak of the lockdown, the company introduced the iD Store Finder after customers complained that they found it difficult to locate iD products.

With the Store Finder, customers can now find out the exact quantity of fresh iD products in their neighbourhood stores.

RTC/RTE segments

 According to Musthafa, the current market scenario presents an opportunity for the ready-to-cook (RTC) and ready-to-eat (RTE) segments to penetrate deeper into the country as the retail world is going through a ‘fresh food’ revolution.

Customers are looking for products that are healthy, natural and organic--  with no chemicals and preservatives, and nothing artificial.

While some companies invest heavily in R&D to increase the shelf life of products (usually with preservatives), Musthafa said “we need to invest in keeping products fresh with a shorter shelf life”.

“At iD, the products are devoid of preservatives with a shelf life of around 3-7 days. That’s one of our biggest USPs,” he said. “We invest heavily in technology to forecast demand at the store level and minimise wastage. We have created a zero inventory business model and built our own distribution network using technology and ‘common sense’ and have been incredibly successful,” he said.

Product launches, expansion 

 There are a few product ideas in the pipeline, but it’s too early to talk about them, he said. Currently, iD is present in India, UAE and the USA.

The company plans to expand to South East Asian and GCC countries.

Within Ìndia, the company has manufacturing facilities in Bengaluru, Mumbai, and Hyderabad. For the UAE market, it has one plant in Ajman.

iD had raised close Rs 200 crore from private equity funds such as Helion Ventures and Premji Invest in the past. It is not looking to raise any more funds right now, said Musthafa.

The beginnings

Musthafa is an IIM Bangalore alumnus. He founded the company with four cousins -- Abdul Nazer, Shamsudeen TK, Jafar TK and Noushad TA.

Started in 2005 as a little establishment in the bustling streets of Bengaluru, iD Fresh Food has come a long way and set several milestones along the way. It has a presence in over 45 cities across India, US and UAE, with more than 1,500 employees.  On an average, the order value per month per store is around Rs 9,000-10,000.

iD Fresh sells around 22,000 parota packs, 8,000 chapathi packs and 55,000 kgs of idly-dosa batter per day across India alone, says Musthafa.

Companies such as MTR Foods, Gits Food Products, Haldiram Snacks ITC Ltd and Bikanervala Foods Pvt also fall under the category of RTE/ RTC categories.

According to Research and Markets, the Indian RTE food market stood at $261 million in 2017, and is projected to grow at a CAGR of over 16 percent during 2018-2023 to reach $647 million by 2023.
Himadri Buch
first published: Jul 16, 2020 03:29 pm