As a culinarily-challenged newlywed in 2011, I remember the joy of discovering iDs ready-to-cook batter packs at the local supermarket. Soft idlis and crispy dosas were now possible and I could avoid the dense, sticky mess that inevitably occurred when making our own batter.
An increasing number of South Indian homes, which once soaked rice and urad dal and ran wet grinders to make their batter, are buying fresh, stone-ground batter in a ready-to-cook pack from iD Fresh Food.
Founded in 2005 by PC Musthafa and his four cousins in a 50 sq.ft. kitchen in Bangalore’s Thippasandra, iD now clocks Rs. 600 crores in annual revenue, is profitable, and has a 70% market share in its key category of dosa batter.
While iD’s flagship products are idli/dosa batter in India and Malabar parotas in Dubai, their range has expanded to Squeeze & Fry vada batter, whole wheat chapatis, homestyle parathas, filter coffee decoction, bread, paneer, curd, and more. Their biggest market is Bangalore, followed by Dubai, Mumbai, and Hyderabad.
Identify a lucrative, unorganised category, set up scalable operations and enter with a convenient branded product: FMCG companies have been following this playbook for decades. Seen this way, iD’s business model does not seem particularly unique. How then is the brand such a runaway success? We spoke to Rahul Gandhi, Chief Marketing Officer, iD Fresh Food to get the inside story.
The Brand Promise
iD makes three promises to their customers:
- Consistent taste and quality year-round
- Convenient to use and readily available
- No added chemicals such as preservatives, stabilisers, acidity regulators, etc.
The ‘no chemicals added’ stance makes delivering on the other two promises challenging, especially for an unstable fermented product such as batter. It also comes at an extra cost, tricky for a brand like iD that wants to remain affordable.
To deliver on their promise, iD has chosen to innovate on every part of the business, from manufacturing to supply chain and even HR policies.
iD’s Many Innovations
The hardest part of making a medu vada is the hole. From this simple insight, came iD’s viral product, the Squeeze & Fry Vada Batter. It comes in an umbrella mechanism-inspired pack that automatically creates the hole as you squeeze the batter into the oil. No hand-wetting or shaping needed!
From free-standing batter packs to grated coconut in an actual coconut shell, iD’s products are the poster-children for innovation, with each one rooted in solving a customer pain point.
During this interview, for example, Gandhi shares with us the prototype for a butter stick – butter in a glue stick-like a roll-on format. The objective is to make it easier to butter your toast, without the need for extra implements.
This commitment to thinking out-of-the-box also pays off in terms of brand perception.
“Because innovation by definition implies something done for the first time, brands that innovate not only get talked about, but are also perceived as leaders. This gives you a psychological edge in the consumer’s mind”Rahul Gandhi, Chief Marketing Officer, iD Fresh Food.
iD’s innovations go beyond product, to every part of the business. Here are some examples:
Traditional wet stone grinders make the best batter. However, they are slow and labour intensive. Most high-performance industrial food processing machines are made in Germany, but there was no ready equivalent for the Indian stone grinder. iD identified a mustard paste machine that worked a similar way and customised it to grind 5000 kilos of batter per hour.
To make flaky, layered Kerala parotas at scale, the company adapted pastry sheet machinery from Greece.
Transporting batter over long distances affects the taste and quality of the batter. Inspired by the ready-mix concrete model, iD transports packed batter pre-fermentation, allowing it to ferment in a controlled environment along the way.
( You can read more such stories on iD founder PC Musthafa’s LinkedIn profile, one of the brand’s highest engagement channels.)
iD launched triangular, homestyle wheat parathas, but noticed that with traditional packaging, the paratha corners were breaking off. To deliver the parathas intact, they changed their packaging to sealed triangles.
Unlike most FMCG companies, ID has no distributors or agents. Their drivers double as salespersons and deliver iD products to retail outlets on a daily basis. All staff are iD employees, not contract workers or hired from trade unions. This increases employee loyalty, with many staying on with the company through lean years.
In 2016, iD ran unmanned Trust Shops in 35 apartments in Mumbai, allowing customers to take what they want and pay on an honour system. During the COVID-19 pandemic, iD did the same to facilitate no-contact delivery of essential goods to those stuck at home. Gandhi says that at the end of the initiative, the company didn’t lose any money – most people ended up paying for the products they took, even though they could have escaped without doing so. “The idea was to reiterate that our relationship is built on mutual trust,” he says.
Here’s another example of iD’s out-of-the-box approach. A print ad on World Idli Day (30th March) urges viewers to ‘skip ad’ with product claims and instead join founder, P Mustapha on a live tour of the factory.
Together, all of the above make it hard for even a larger competitor to replicate iD’s success.
“Coming up with a unique product or marketing campaign is relatively easy. But building innovation into every part of the business model to create interconnected systems is like a unique jigsaw puzzle. You need every piece to be just right — and that is hard for competitors to replicate,” says Gandhi.
Not All Successes
iD has had its share of product mis-steps and a number of seemingly great ideas had to be axed.
These include ready-to-eat chutneys which were withdrawn after a market launch, as was a pilot with fresh grated coconut sealed with a cork in natural coconut shells. An experiment with extended shelf-life parotas, with preservative layers built into the packaging, also did not work.
The iD team accepts that these failures are part of the game and many of these ideas have gone back to the R&D desk for improvement. “Not all innovative ideas are winners. But every winner was once an idea. So never stop thinking out of the box,” writes iD founder PC Musthafa.
Here’s Rahul Gandhi’s advice for brands who want to build a culture of innovation:
- Set the bar for ideas and solutions higher each time.
- Don’t penalise people for trying new/different things.
- Remove the fear of being criticised or looking silly.
- Award risk taking, whenever possible. Fun fact: in January 2023, iD instituted a Winning Failure award for the most spectacular failures. The quarterly award aims to encourage their people to try big, bold ideas.