ID Fresh Accelerates Global Expansion As Diaspora Craves For Parotas To Idli-Dosa
iD Fresh Food (India) Pvt., the maker of ready-to-cook parotas and idli-dosa batter, is preparing to scale up in the U.S. and the U.K. as well as enter new territories like Singapore and Malaysia by the end of this year.
It also plans to set up manufacturing facilities in overseas markets to capitalise on the pandemic-induced cravings for convenience food, PC Musthafa, co-founder and chief executive officer of iD Fresh Food told BloombergQuint in an interview. “We plan to make our fresh food available to the world.” The Bengaluru-based company, which also sells paneer, bread and filter coffee concoctions, already serves its coffee to the Indian diaspora in the U.S. According to Musthafa, their market research highlighted that 65% of south Indians in the U.S. know the brand, while among north Indians, the awareness was around 30-35%.
“That gave us the confidence to take frozen parotas in the U.S. and the U.K. markets. We are already in 200 stores across New Jersey, New York, Pennsylvania, London, Scotland, Birmingham, Leicester, Ireland, Bournemouth, etc. We will soon be available across the 2,000 plus Indian grocery stores in these two countries.”
The company plans to set up a manufacturing facility in the U.S. by this year-end, Musthafa said. “Next year, we are looking at a plant in the Malaysia-Singapore belt, and the year after that, we plan to have a facility in the U.K. and Saudi Arabia.”
iD Fresh has four manufacturing facilities in Bengaluru, Hyderabad, Mumbai and the U.A.E.
Its Delhi plant is getting commissioned in June, he said. “We are planning to set up one more plant in Kolkata, and that should be good enough to serve India.”
The expansion will be fuelled by an investment of as much as Rs 300 crore.
Recently, iD Fresh raised Rs 507 crore in a Series D round of funding led by Asia’s leading secondary private equity firm NewQuest Capital Partner, along with existing investor Premji Invest — the private investment office of Azim Premji.
The company had secured $5.2 million in a Series A funding from Helion Ventures in 2014, and $25 million from Premji Invest in 2017. “Helion Ventures exited with a 10 times return after a seven-year investment,” said Musthafa.
Parotas Pip Idli-Dosa
Demand for packaged and convenience foods grew at a steady pace over the last two years as Covid-19-led lockdowns prompted people to cook more at home.
With restaurants working under restrictions, products such as oats, packaged noodles and ready-to-cook foods saw brisk sales as consumers sought convenience in their daily meals.
For iD Fresh, frozen parotas became its top-selling item in the current year, contributing 35% to sales and overtaking idli-dosa batter which has a share of 32%, said Musthafa.
That’s despite prices being raised because of “significant” cost pressures. The company hiked prices of parotas by 15% as against raw material inflation of 30-40%, he said.
The potential to grow is huge. Revenue in India’s ready-to-eat meals category is expected to hit $55.6 billion (Rs 4.2 lakh crore) in 2022, according to Statista. It’s expected to grow 10.21% annually over 2022-2027).
iD Fresh expects to end fiscal 2022-23 with a turnover of Rs 700 crore, below its targeted Rs 1,000 crore. “If not for Covid-19, we would have crossed our target this year alone,” said Musthafa.
The company has, however, doubled its business from Rs 210 crore in FY19 to Rs 411 crore in FY22. “That gets us close to a run rate of Rs 500 crore.”
It also plans to scale up its distribution to 40,000 outlets up from the current 31,000 across 45 cities. It is also looking at more products in the fresh category. “Butter is the next innovation and it is likely to hit the markets in 2-3 months,” Musthafa said.
iD Fresh is also looking at scaling its curd and other dairy business but doesn’t see the big players, like Amul and Mother Dairy, as near peers.
“Nothing artificial, 100% natural and zero preservatives” — that’s how Musthafa describes the company’s product portfolio.
“We don’t want to compete with them (peers), as ours is a differentiated product and the mission is to become the world’s best known fresh foods brand.”