How Gujarat-based HyFun Foods uses AI and IoT to process potatoes for frozen snacks

Pre-made or processed foods have become a part of our diet, thanks to the many fast food outlets at our disposal. According to Research and Markets, the frozen food market in India, valued at Rs 14,618 crore in 2023, is projected to grow at a CAGR of about 15.72% between 2024 and 2029.

This increasing adoption of processed food items among Indians is driven by evolving consumer preferences and increased urbanisation. And banking on this growth is Gujarat-based HyFun Foods. 

Founded in 2015 by Haresh Karamchandani, HyFun Foods serves business-to-business (B2B) and business-to-consumer (B2C) segments, specialising in frozen potato-based snacks, including French fries, burger patties, and cheese poppers. 

Belonging to a family of potato traders, Karamchandani, Managing Director and Group CEO of HyFun Foods, was kept away from the family business by his parents, who wanted him to explore other professional opportunities. 

However, in his third year of college, he found himself drawn back to trading. He even explored new ventures, ranging from a multiplex theatre chain to a Maruti dealership and a textile business. However, none of these worked out.

In 2010, he finally had a breakthrough. "At that time, there was only one major potato processing company in India, and the equipment for this industry was largely imported from the US and Europe. This piqued my interest, and I decided to explore further." 

He travelled to the Netherlands and other parts of Europe to study farms and cold storage techniques, as well as engage with processing equipment suppliers. In 2015, his cousin, Kamlesh Karamchandani, joined the venture to help with the sales.

"Back then, no one imagined that India could establish a French fries processing industry. The infrastructure was limited, and there was scepticism about whether high-quality frozen products could be produced domestically," he tells YourStory, as he recalls how he shifted to manufacturing frozen potato-based food from trading. 

Today, HyFun Foods supplies to major quick service restaurant (QSR) brands, including Burger King, KFC, Pizza Hut, and Domino’s, while also expanding its retail footprint in India. The company also exports its products to over 40 countries, including the US, Canada, Japan, New Zealand, Qatar, and Saudi Arabia.

Scaling operations and expanding presence

For Karamchandani, who had no prior experience in large-scale food production, establishing a processing plant was a big financial risk. "Setting up this plant wasn’t just about producing high-quality products; it was about finding the right market for them."

He sourced an initial investment of Rs 65 crore, comprising "a loan of Rs 37 crore, a Rs 10 crore subsidy from the Ministry of Food Processing, and the rest through equity."

Starting with 200 farmers, HyFun Foods adopted a contract farming model, which has now grown to 7,500 farmers across Gujarat and Madhya Pradesh. 

The company plans to expand to 10,000 farmers by FY26 and aims to have a network of 30,000 farmers across Gujarat, Madhya Pradesh, Uttar Pradesh, Punjab, and Himachal Pradesh by FY29.

HyFun Foods follows a ‘seed-to-shelf’ business model, starting with contract farming for seed multiplication and procurement of crops through a buyback agreement. According to Karamchandani, the company processes 350,000 million metric tonnes of potatoes annually, holding a 13% market share in the processed food segment. 

To maintain potato quality, the company invested in advanced cold storage infrastructure, incorporating state-of-the-art handling techniques, as well as introduced digital tools to streamline farmer interactions. 

"Since we deal with thousands of farmers and the harvesting window is short, managing procurement and payments efficiently is critical. Last year, we introduced a tech-based solution, including a dedicated farmer app," Karamchandani tells YourStory.

HyFun Foods launched HyFun Paathshala to enhance agricultural productivity through regenerative farming practices and modern technology. The initiative serves as a knowledge centre, educating contract farmers on best practices for cultivating high-quality potato varieties. 

With 30 model farms and 3,000 farmers across Sabarkantha and Banaskantha districts, it provides hands-on training through three seasonal sessions and virtual guidance via the Farmoji app, which connects farmers with global experts through AI-driven insights. 

Additionally, it has incorporated soil moisture sensors and IoT devices to help farmers optimise resource utilisation, reducing cultivation costs while increasing yields.

He adds, "This year, we introduced Weatherways, an AI-based weather alert system, and Soilala, a soil monitoring system. These tools help farmers optimise resource use and make informed decisions.

Additionally, we’ve developed an AI-based harvest quality assessment tool to evaluate potato quality during procurement."

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Future growth

In FY24, HyFun Foods reported a turnover of Rs 1,200 crore, with exports contributing 70% of its sales. He expects domestic sales to account for 50% of total revenue by FY29, with overall turnover projected to reach Rs 5,000 crore.

It competes with domestic and global brands, including McCain Foods, Lamb Weston, and Cavendish Farms, in the frozen or processed food segment.

The company has already invested about Rs 1,000 crore in infrastructure and operations and plans to invest an additional Rs 1,000 crore in scaling production capacity. 

"Our working capital investment stands at Rs 500 crore. While we have relied on debt financing so far, we are considering private equity funding before potentially launching an IPO in the next two to three years," Karamchandani reveals.

As part of its expansion, the company plans to introduce a new range of frozen foods, including pizzas, kebabs, momos, and processed vegetables. "This diversification will help us tap into a broader consumer base and accelerate our growth trajectory."

Meanwhile, replicating its potato model, HyFun Foods is also expanding into onion processing with contract farming in Maharashtra and Madhya Pradesh. 

“A trial plantation will begin in November 2025, with plans to produce frozen onion cubes and slices for the HoReCa and QSR industries within three to four years. We have been active in the Malwa region, covering Indore, Ujjain, Shahjahanpur, Dewas, and Chhindwara,” he says.