A Coolie's Son Who Went On To Build Rs 100 Crore Company By Selling Idli Dosa Batter

A Coolie's Son Who Went On To Build Rs 100 Crore Company By Selling Idli Dosa Batter

Origins

In 2005, PC Musthafa and his four cousins, Abdul Nazer, Shamsudeen TK, Jafar TK, and Noushad TA, founded iD Fresh Food (India) Pvt. Ltd. Food. Musthafa, the son of a daily wage laborer, defied the odds to start this venture. They began their business in a modest 50 sq.ft. kitchen in Bangalore’s Thippasandra, making small batches of idli and dosa batter. Their first sale in 2006 marked the beginning of what would become a remarkable entrepreneurial journey.

Initial Challenges

In the early days, iD Fresh Food (India) Pvt. Ltd. faced several significant challenges:

  1. Hygiene Issues: Operating from a tiny kitchen made it difficult to maintain cleanliness. The cramped space was prone to bug infestations, which posed a serious hygiene problem.
  2. Packaging Problems: The batter was initially sold in plastic bags secured with elastic bands. This method was not secure and led to frequent spills, compromising the product’s quality.
  3. Shelf Life Concerns: The batter had a very short shelf life due to the risk of over-fermentation, especially in hot weather. This made it challenging to keep the product fresh for customers.
  4. Consumer Perception: Many consumers were skeptical of packaged batter, preferring to make their own at home. They were concerned about preservatives and the quality of ready-made products.

Overcoming Initial Hurdles

To address these challenges, Musthafa and his team implemented several key improvements:

  1. Enhanced Hygiene: They invested in building high-quality manufacturing plants, which allowed them to maintain strict hygiene standards and ensure product safety.
  2. Innovative Packaging: iD developed a patented packaging solution that resolved the issues of spillage and product freshness. This new packaging was more durable and better protected the batter during transport.
  3. Preservative-Free Products: They marketed their products as completely free of preservatives and other chemicals, appealing to consumers who valued natural, homemade-quality food.
  4. Efficient Supply Chain: They created an efficient supply chain that ensured fresh deliveries to retail stores every morning. This approach helped maintain product freshness and reliability, crucial for customer satisfaction.

Brand Promise and Innovations

iD Fresh Food committed to three core principles to differentiate themselves in the market:

  1. Consistent Taste and Quality Year-Round: They ensured that their products maintained the same taste and quality regardless of the season.
  2. Convenience and Availability: Their ready-to-cook packs made it easy for customers to prepare traditional South Indian dishes like idlis and dosas at home.
  3. No Added Chemicals: They avoided using preservatives, stabilizers, and other chemicals, even though it increased their production costs.

One of their notable innovations was the Squeeze & Fry Vada Batter, which allowed customers to make medu vadas easily. The packaging automatically created the hole in the vada as the batter was squeezed into the oil, simplifying the cooking process.

The Trust Shop Initiative

A significant breakthrough in iD’s marketing strategy was the introduction of Trust Shops. This initiative aimed to build trust with customers by showing that iD trusted them first:

  1. Concept: Trust Shops were coolers placed in local societies, apartment complexes, and tech parks. These coolers were stocked with iD products, and customers could take a packet and pay later.
  2. Objective: The goal was to allow customers to try the product without any upfront payment, thereby demonstrating its quality and freshness firsthand.
  3. Outcome: This strategy proved highly successful. Over 90% of customers paid for the products, confirming their trust in iD’s quality. This initiative not only built customer loyalty but also resulted in a higher profit margin compared to traditional retail stores.

Financial Analysis

Comparing the profit margins between retail stores and Trust Shops highlights the financial benefits of this innovative approach:

  • Retail Stores: With a profit margin of about 20%, iD earned INR 22 per packet sold, totaling INR 22,000 per 1,000 packets sold in a month.
  • Trust Shops: By recovering over 90% of the MRP, iD achieved a 40% profit margin. This was significantly higher than the margin from retail stores, making the Trust Shops a more profitable venture.

Growth and Market Share

iD Fresh Food experienced substantial growth over the years:

  • In the fiscal year ending March 2022, their operating scale grew by 36%, reaching Rs 381.6 crore in revenue.
  • Their flagship products, idli/dosa batter and parotas, contributed significantly to their income, with each product accounting for around 33.5% and 35.6% of total operating income, respectively.
  • Over 71% of their revenue came from the Indian market, with the rest from overseas markets, primarily the UAE and the US.

Recent Developments

In FY21, iD Fresh Food achieved Rs 294 crore in revenue, a 23.5% increase from the previous year. For the fiscal year ending March 2023, they expected their revenue to reach around Rs 700 crore, indicating continued strong growth.

Conclusion

iD Fresh’s journey from a small kitchen operation to a leading player in the ready-to-eat food industry highlights the importance of addressing customer needs, maintaining product quality, and building trust. Their innovative Trust Shop initiative played a crucial role in gaining customer loyalty and improving profit margins. iD Fresh’s success story serves as an inspiring example of entrepreneurial determination and strategic adaptation in a competitive market.


#Entrepreneurship #StartupSuccess #Inspiration #BusinessGrowth #FoodIndustry #Innovation #CustomerTrust #IDFresh #SuccessStory

Vandana Tolani

Abhimanyu Gupta

Student at St. Xavier's College

4 个月

Thanks for sharing !!

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