iD Fresh Food working on multi-pronged US strategy to become a global brand

© Swathi Moorthy
Exclusive | iD Fresh Food working on multi-pronged US strategy to become a global brand

Last year in September, Bengaluru-based iD Fresh Food India Pvt. Ltd, known for its ready-to-cook offerings, was accused by a social media post of using animal extracts in its products. The company filed a police complaint against the “misleading and false information” with the cybercrime division of the Bengaluru police, and soon, the social media campaign against the brand fizzled out. Founder of the company, P.C. Musthafa, in an exclusive interview with Moneycontrol, says this was just one of the many battles he has had to face while building the company. Excerpts:

What were your thoughts when the social media crisis happened last year? What did you learn from it?

When the social media crisis happened, we realized that every crisis is an opportunity. All the customers, partners and employees supported us in this crisis. While some people tried to pull us down on social media, many others came forward to support us. The crisis taught us the importance of trust. We realized that we are a trustworthy brand that enabled all our stakeholders to rally around us.

The world has been fighting the pandemic over the last two years. Many businesses were badly hit. How was the period for iD Fresh Food, businesswise?

The pandemic has led to healthy cooking. People have become more health conscious. They are spending more time at home these days, utilizing work from home options. They are also experimenting a lot more with their cooking. We have almost doubled the revenues during this period.

At iD Fresh we don’t have any finished products and consumers can always customize them. We have also continued to be innovative on our packaging.

What’s your goal for the brand, something like an ultimate objective?

My dream is to make iD Fresh one of the world’s best known fresh foods brands. The mission is to make Indians stay away from junk food, by promoting more consumption of idlis and dosas.

As you are aware, iD Fresh Food had recently raised Rs 507 crore from investors. We gave a 10x return to our investor Helion Ventures in just six years. We are on a great path.

There is plenty of backroom action happening as far international expansion is concerned. Can you give us a glimpse?

We are working on expansion plans within India and overseas. We will have our Delhi plant ready by May this year and the Hyderabad plant, which will be a large facility like our Bangalore one, will be up by the end of this year. The US, UK, Singapore and Malaysia facilities will be ready by year-end as well. We have plans for Gulf countries too. Our Ajman plant will enable distribution into other GCC countries.

Your expansion in the United States will be key to your global growth US strategy. Can you please talk us through that?

The first move would be to popularise the coffee decoction in the market, for which we did a market-research in the US among south Indians. Awareness about iD products was around 62-63 percent, so one can say the brand is already known in the market. And among the north Indians, the awareness was around 32-33 percent. We had launched coffee decoction in the US last year through a few distributors and the same is available on Amazon.

Second step would be the launch of frozen parathas, in the next two months. In fact, we have already shipped four containers to the US in the last one month.

Third step would be to launch the batter in key markets like the New Jersey belt, the Texas belt and then the California belt.

We also did a quick study around the availability of idly makers in their homes. We found that almost 77-78 percent Indians had an idly maker at home. Our fourth approach, would be to launch our dosa maker.

Our fifth step, would be the street-food approach. Street food is quite popular in the New Jersey/New York belt, so we could probably look at partnering with some of the street food vendors. We are looking at a batter plant in the New Jersey/New York area. So, this sums up our 5-step strategy for the US market.

My thinking is if burgers can become a global food choice, why not idli or dosa?

So, you are basically saying that if Indians and South Asians can enjoy burgers, then why not think in terms of making Americans and Europeans enjoy idlis.

A single brand cannot do that. You will need a consortium to do this and bring about visible change. But I can tell you that people are becoming more health-conscious and they are gradually moving away from junk food, globally. So, from that perspective it helps us to sell such safe and nutritious food. The one thing that we need to work on would be, innovations in packaging, ready-to- serve kind of packaging with chutneys, etc.

Convenience along with health and safety play a very important role. If it’s compact and safe, then it becomes easier for consumers.

You have always wanted iD Fresh Foods to be a world-renowned brand. How do you plan to go about achieving that?

A food brand which is not available in the US is not considered a global brand. So now our main agenda would be to make our products available in the US market and then penetrate further.

Secondly, we cannot just keep going on going with idly/dosa batter. We need to bring new products/innovations into the market.

Then we have to focus on distribution expansion all across.

And finally, with the Gen-Z culture of eating out, we need to find ways of delivering them home-cooked food and a chain of QSRs may be able to do it.

Would you also consider launching such quick service restaurants (QSRs)?

A QSR model could be an option to make iD Fresh a global brand. This could be a few years away, but to be a global brand, the QSR route is a must.

You did mention that iD is a brand that thrives on IT and that you have a data-driven approach which helps you identify customer issues. Please elaborate on this.

The biggest challenge for a fresh-food business is wastage. So, if a store can sell seven packets tomorrow, then I should be able to supply the exact numbers, neither less nor more. We have around 30,000 outlets today and every store is geo-tagged, and based on that we do route optimization, route planning, etc.

Secondly, every store is geo-fenced, so that transfer has to happen within the store’s premises and that ensures service quality. We have captured data from the last 10 years of the store, items, sales and wastage details on a daily basis. Sitting in my office I’d know that this particular store in 12th Main, 6th cross, in Indiranagar, on Friday, February 3, sold X quantity and this is what iD Fresh needs to supply. Now, this is the kind of analytics that we have built. Obviously, the other verticals too play an important role but IT is the backbone. Our distribution network is robust and is one of our biggest strengths. Our last mile distribution is especially good.

iD is showing an annual recurring revenue (ARR) of Rs 500 crore in the last 12 months, right?

That’s based on the monthly run rate. In January, we did around Rs 41.4 crore, so that gets us close to a run rate of Rs 500 crore. In fact, we have already exceeded last year’s revenue in the first nine months of this financial year. We will go for an IPO (initial public offering) only when we hit an ARR of Rs 1,000 crore and that may take another 3-4 years.