Startup Stories: iD Fresh Food’s Long Road To Success

The lessons from failures have scripted iD Fresh Food’s success story, writes CEO and Co-Founder PC Musthafa.

An iD Fresh Food buffet served during an event. (Photo: iD Fresh)
An iD Fresh Food buffet served during an event. (Photo: iD Fresh)

There is an entrepreneurial spirit in each one of us. Yet, not everyone dares to venture out of their comfort zone, exploring different avenues, taking endless risks. Looking back at my early life in a small village in Wayanad, sans electricity and basic material comforts, I’m pleasantly surprised by the turn of events.

In 2005, when my cousins—Abdul Nasser, Shamsudeen TK, Jaffer TK, Naushad TA—and I decided to start iD Fresh Food, we had no idea that one day we would be clocking monthly revenues to the tune of Rs 21 crore. And, our ambition would be to become a $10-billion company! Back then, we were just driven by the desire to do something on our own, to make a difference to people’s lives—even if in small ways.

Startup Stories: iD Fresh Food’s  Long Road To Success

The Eureka Moment

About 15 years ago, when my cousins ran a kirana store in Bengaluru and I worked with a top multinational, we used to spend hours discussing prospective business ideas. Even as a child, I was bitten by the entrepreneurial bug. From setting up a rickety candy shop in my Kerala village to saving up to buy three goats—and then, a cow—and selling milk, the want of capital was never a deterrent for my business plans.

The idea of starting an idli-dosa batter venture first popped up rather casually by my cousin Shamsu, while I was pursuing my cherished dream of getting an MBA from IIM Bangalore. It was a common sight back then to see readymade idli-dosa batter being sold in unhygienic plastic covers sealed with rubber bands.

Customer complaints about poor quality notwithstanding, the demand was palpable.

So, we thought, ‘Why don’t we do it better?’ And that’s how iD Fresh was born.

PC Musthafa (left) and the ID Fresh Food team. Photo: iD Fresh
PC Musthafa (left) and the ID Fresh Food team. Photo: iD Fresh

The Real Challenge

We soon realised that it takes more than an idea—no matter how brilliant—to run a successful business. With an initial investment of Rs 50,000 and a 50-square-feet kitchen with a grinder, mixer, weighing machine, sealing machine and second-hand scooter (for delivery), the five of us started making the idli-dosa batter and delivering it to neighbourhood stores.

Of the 100 packets delivered, 90 were returned—and this continued for three agonising months!

We decided to give ourselves six months to turn things around. In the meanwhile, we started supplying the returned packets to B2B stores (before the expiry date) at a reduced price, thereby helping us stay afloat until the retail sales picked up. We continued to push our product with retailers as well as consumers. By the ninth month, we were selling 100 packets daily.

The Big Fail

The thing with success is that it is infectious. In no time, we scaled up the business. We made conscious efforts to hire young talent from remote villages and small towns, and trained them in manufacturing and sales. By 2009, we were supplying 3,000 kilograms of batter to stores in Bengaluru, clocking an annual revenue of Rs 1 crore.

And that’s when we decided to expand to Chennai. For, where else would we find a bigger market for idli-dosa batter! We put in all our profit into the Chennai plant, only to realise that the competition there was fierce. And the only way to survive was to compromise on quality—which went against our company policy of adopting only a 100 percent-natural, home-made style of preparation, without the use of any chemicals, preservatives, synthetic stabilizers, artificial colours, or flavours.

Shutting down Chennai operations was one of the toughest decisions, but it was also the most prudent one.

The Rs 10 lakh loss hurt the business, but what worried us more was the likely loss in morale. How do we emerge stronger?

The Priceless Lessons

Our biggest asset has been our team. At a time when the company was facing its worst financial crisis, employees continued to work diligently—at one point, without any salary for three months. Their faith and dedication have driven us to greater heights. In 2012, within months of exiting Chennai, we expanded to Mumbai, Hyderabad, Pune, and Dubai. We also introduced new ready-to-cook product categories, including Malabar Parota, Whole Wheat Parota, and Whole Wheat Chapati.

The lessons from failures have scripted iD Fresh’s success story. While the whole world was looking to increase the shelf-life of products, we focused on selling fresh batter. When traditional manufacturing failed to match our business expectations, we collaborated with a German company to co-develop a machine that could make 4,500 kg of batter an hour—100 times the output of traditional machines! We used common sense to be at the forefront of innovation. Whether it’s our award-winning, boat-shaped, reusable packaging for the idli-dosa batter or our authentic South Indian Filter Coffee that comes in a unique ready-to-use liquid form, we are always trying something new.

Even our patented, squeeze-and-fry vada batter packaging design, that blends the complex art of traditional vada making with the simple science of modern technology, was an important milestone.

Similarly, re-entering the Chennai market, as a parota company and then slowly building a trusted network with retailers, was a strategic victory.

Patience is crucial. Especially with key decisions, such as deciding on investors.

With Helion Ventures (2014) and Premji Invest (2017), we have been incredibly fortunate to find partners who share the same vision and ethical values.

The Journey Ahead

The world recognises us today as a brand that cares. Whether it is the iD Trust Shop—world’s first branded shop with no salespersons—or #ShareTheGoodness initiative launched on World Idli Day, or social campaigns such as #KhaanaKhaaya for Mother’s Day, #iDPledge for Independence Day, or ‘Meet Your Neighbour’ initiative, iD Fresh has become synonymous with trust, tradition, and community. The journey hasn’t been easy though; it has been fraught with myriad tricky decisions—often at the cost of lucrative deals.

Participants of the ‘Meet Your Neighbour’ initiative. (Photo: iD Fresh)
Participants of the ‘Meet Your Neighbour’ initiative. (Photo: iD Fresh)

Now, our vision is to become a fully organic company that makes organic food affordable and accessible for all. For a healthier and greener future, we need to invest in smart packaging, facilitated by cutting-edge technologies. iD Fresh is determined to find a sustainable replacement for plastic packaging—even if it is at the cost of profit margins.

For, as the son of a daily wage labourer for whom three meals a day was once a luxury, money will always be the means to an end. Never an end in itself.

PC Musthafa is CEO and co-founder of iD Fresh Food.

The views expressed here are those of the author and do not necessarily represent the views of Bloomberg Quint or its editorial team.