Born in Kerala, Musthafa PC is a Computer Science engineer who went on to get an MBA from IIM-Bangalore. He could have gone ahead and picked the highest paying job but the foodie in him made Musthafa do something he loved but had no background in - food and manufacturing. The year was 2006 and the place was Bengaluru. All across India, batter for idlis and dosas is sold in plastic bags with a rubber band to seal it. And there are millions of households that buy this batter to prepare food items. This is where the idea took birth: the plan was to put some structure to the batter industry. Musthafa got along with his four brothers and decided to start with a small pilot.
They bought a couple of machines for the batter and packagingand iD Fresh was born. “The idea was simple. We wanted to get hygienic, nicely packed batter to Indian households,” says Musthafa. Within a few weeks, this small factory in a suburb of Bengaluru was running full steam and the idea was validated. iD Fresh started a larger factory with a vision of building a food company that made preservative-free food that can be cooked at home.
“We made sure that we focus on the product quality and packaging. The market is anyways huge,” says Musthafa. iD Fresh was also sure about the distribution channels. There are more than 65,000 retail stores in Bengaluru, of which about 12,000 have refrigeration. They had to increase bandwidth and get their product into as many stores as possible.
After a few years of steady growth, iD Fresh decided to raise funds and expand its reach. The company raised Rs 35 crore from Helion Venture Partners in 2014. At that time, the company was 600-people strong and the new funds are to be used to scale up and introduce more products.
Now, iDfresh is a 1000+-member team with seven factory locations and eight offices. “We now manufacture 50,000 kgs of idli/dosa batter per day which is equivalent to a million idlis,” says Musthafa. Besides batter, iDfresh has also introduced Malabar parotas and chutneys which have become a household item in south India. Idli/dosa batter is their most popular product followed by Malabar parota. Talking about the process, Musthafa says, “Batter is made, seal packed and loaded into chiller vans as early as five am. It is then supplied to stores across Bengaluru and other cities we operate in. We have partnered with thousands of retail stores and the supply to all these areas are completed by two pm latest.”
The company has reached a scale where the company can also estimate the demand in each of these stores and stock accordingly. Its is a great example of a new brand that has built a strong, sustainable venture in the food industry. The company also has partnerships with grocery delivery portals like Bigbasket, Grofers etc. “These new channels are great for the customers to order what they need on demand but when it comes to our sales, online is still only a fraction of the overall market,” says Musthafa.
There are a lot of startups in the food delivery space and after a big splurge of funding, we are seeing a correction in the market. There are various models- delivery from restaurants, Internet-first kitchens etc. The market is large but there are too many players and consolidation seems like the only way ahead. For iD Fresh, the path ahead is clear: build on the product line and expansion across cities. The company has also gone international with sales in the Middle East. “We are confident about the space we are in and want to maintain our market leader position. We are targeting to be a Rs 1,000-crore company by 2020,” says Musthafa.
- Helion Venture Partners
- retail stores
- Indian breads
- rubber band
- Andhra cuisine
- Tamil cuisine
- iD Fresh