The ready-to-cook (RTC) and ready-to-eat (RTE) categories flourished during the pandemic as people looked for both convenience and restaurant-style food at home. This has given a boost to iD Fresh Food, which has been in the idli-dosa batter business since 2005, to expand into newer categories and geographies.
In October this year, the company commenced operations in a few cities in the US including New York, New Jersey, Dallas and San Francisco. Aiming to achieve a Rs 450 crore revenue target this fiscal, up from Rs 294 crore in FY21, iD Fresh Food plans to bolster its presence in the Middle East by expanding to Saudi Arabia, Kuwait, and Qatar. Its operations in Bahrain are expected to commence in December this year. After establishing presence in the idli, dosa and parota categories, the company now wants to sample the bread market.
iD Fresh Food has been trying to bring the benefits of standardisation and convenience to food items that are typically made at home. Apart from batters, the firm now manufactures and sells packaged paneer, chapati, parota, filter coffee decoction, tender coconut, and curd. Malabar parota and idli-dosa batter are among the company’s bestselling products.
iD Fresh Food’s co-founder and CEO, Mustafa PC, says that as the company grows, it is looking to add products that can be made without preservatives, have a sizable market, that can be disrupted through innovation, and align with the company’s current distribution network. It has, hence, launched bread with a ‘clean products’ proposition (free of chemical ingredients) in Bengaluru at Rs 50 for a loaf.
According to research firm Mintel, consumers who live alone (50%), working women (40%), and working men (37%) are the most prominent users of RTC/RTE foods. iD Fresh Food is targetting these consumers who are less likely to make breakfast from scratch. Rahul Gandhi, the company’s CMO, says people living in urban metros who don’t mind paying a premium for products that offer convenience and health benefits are its prime consumers.
Mustafa says Bengaluru is the biggest market for iD Fresh Food, followed by Dubai, Mumbai, Hyderabad, Chennai and, most recently, Delhi. The company is yet to establish a strong presence in tier II and III cities.
Introducing hygienically packaged products to disrupt a market that was unorganised and dominated by home chefs selling freshly made idli-dosa batter in simple plastic pouches has been the company’s go-to strategy. Interestingly, Chennai, where idli and dosa are breakfast staples, has proven to be a hard market to crack. “We are unable to meet the quality expectations of consumers in Chennai, and people still make batter at home there,” explains Mustafa.
The company had introduced coconut chutney and appam batter; both of these did not take off, and were discontinued. “It is particularly hard to get traction when a brand attempts to take on a product that is traditional or specific to a particular region, because the product could fail on taste expectations which is the number one consideration in the food category,” points out Samit Sinha, founder and managing partner, Alchemist Brand Solutions.
iD Fresh Food looks to identify product categories where the dissatisfaction with the homemade version is high. “The conversion in packaged curd and paneer categories has been very quick,” observes Gandhi, as people are often unhappy with the success rate of setting curd perfectly at home. Mustafa compares the mainstreaming of idli-dosa batter, and the other products the company makes, to that of packaged wheat atta.
Analysts say that the convenience value proposition in food products is yet to take off in India because of the general perception that these packaged foods are not healthy. While the brand has tasted success with batters and parotas, adding more regional food items will be challenging, analysts say. “It would be hard to sell a product in the region it originates from, more so if that market is highly homogenous,” says Saurabh Uboweja, managing partner, BOD Consulting. This is also why the brand is less likely to have a big market in tier II and III markets, he notes.