3. Introduction
ID Fresh Food, a private limited company, was
founded in 2005 by P.C Mustafa and his four cousins -
Shamsudeen TK, Abdul Nazer, Jafar TK and Noushad
TD.
ID Fresh foods is a food products company based in
Bangalore, India. The company manufactures a range
of fresh foods including Idly/Dosa Batter, Parotas,
chapatis, curd, and paneer.
Creating a position for itself in the unorganized
business of idli-dosa batter was not easy. So, iD
offered a unique value proposition to its customer
that of “Freshness” which resonated with customers.
4. Products
Idli Dosa batter
Cottage cheese(paneer)
Curd
Parathas and Chapatis
Filter Coffee decoction
Tender and grated coconut
Vada batter
5. Distinguishing
Itself from the
Competition
Made with Fresh raw materials of specific quality
100% natural
No Chemical preservatives
Low sodium salt and water purified by reverse osmosis method
Idli Dosa batter packaging in the form of pouch(Transformer
pouch)
Paneer was made using the traditional method of adding lime to
milk instead of the commercial method of adding citric acid.
Ethically very strong
6. Major players in Packaged Food Market
•MTR- Established in 1924, 72% south Indian Market share, served both domestic
and international market like USA, UK, Australia, NZ, Japan, UAE
•Gits – 1st to Introduced instant mixes in India and gained popularity in RTC. Wide
range product in RTE and RTC segment
•ITC- Served in Two category of RTC foods- Ashirvaad offering a range of daily
delights and Kitchen of India offering gourmet food in India. Huge portfolio in
multiple categories of staple food like staples, spices, biscuits, confectionery,
snacks, noodles, pastas, chocolates
•Nestle – Dominated RTE , baby food and bottled water to cereal and healthcare
nutrition products. Other RTE and RTC brands include Nescafé, KitKat, Nespresso,
Maggi, and Milo.
•Bambino – Another giant in RTE with market presence especially in Vermicelli ·
Roasted Vermicelli · Wheat Rice · Macaroni Elbow · Macaroni shapes · Premium
Pasta
7. Challenges
The fresh-food business was risky because of
product’s short shelf life as well as problem of
logistics which was their USP.
Chennai debacle had taught the founders that even
more than a food business, iD was about logistics.
Change in mindset required for farmers to adopt the
required bio-pesticide, bio-fertilizers.
Shortage in the availability of workers and
infrastructure during Covid-19.
9. ● Young people are intended to spend more money on their lifestyle than
aged people. Aged people tend to consume less energy-dense sweets and
fast foods, and consume more energy-dilute grains, vegetables, and fruits
rather than young people.
● Generally, educated & solvent people wish to improve the condition of
living. Educated households person purchased significantly more
vegetables, fruit, and less meat relative to households with the lowest
education level
● Convenience indicates a consumer is inclined to save time and energy as
regards food preparation. Food preparation is a time- consuming activity.
So, a person wants to minimize the time that is spent on meal preparation
10. ● There will always be a taste difference between homemade food and
purchased Ready-to-Eat product
● Those buyers who look for a low price are not stable, they switch every
time to other lower priced product
● In contrary, some consumers think the price is a signal of quality. They think
quality products’ price is high. In a recent study, it has been found that
consumers are more willing to pay the premium price to ensure good
quality of the food products
11. Model used to tackle challenges
Mustafa and its co founders made three
decisions:-
1) ZERO INVENTORY BUSSINESS MODEL
2) DIRECT STORE DELIVERY MODEL
3) THEY STARTED INVESTING IN TECHNOLOGY.
12. DCS (Driver Cum Sales person)
LOAD THE TRUCK
WITH
APPROPRIATE
QUANTITY OF IDLI
VISIT EACH STORE, TAKE THE
ORDER, SUPPLY QUANTITY.
CREATE THE INVOICE AND
COLLECT THE PAYMENT.
13. DECISION TO INVEST IN TECHNOLOGY:-
They made an app to capture data on a real time basis reducing their
wastage by 1.6%.
In 2012, using a nokia phone, they started capturing stores, item and day
wise sale and wastage data.
they then used data from previous Eight years to predict demand and plan
their daily production accordingly to supply the magic number to the right
store on the right day.
14. Questions
to
Discuss:
What are the diversified products launched by Id-Fresh and how
it's helping in reducing the effect of diminishing marginal utility?
What are the factors influencing demand for ready-to-eat food
items
What are the supply challenges faced by Musthafa and solutions
for those challenges?
What are the pricing strategies to increase the consumer surplus
What are the future strategies to create more business and
revenue for ID fresh
15. Diversified Products Launched by ID and how
it reduces Diminishing Marginal Utility?
What is Diminishing Marginal Utility:-
In simple words, satisfaction decreases as consumption increases.
So,
Company grew it’s product portfolio to include Curd and paneer in 2016.
Other products such as Ragi and Dosa batter introduced in 2017.
Innovative vada batter and filter coffee packs in september 2018.
16. Simultaneously, ID explored newer channels of delivery
through partnerships with grocery delivery portals such
as Big Basket, Grofers, Dmart and others.
In 2019, ID decided to launch a economical variant of idli
Dosa batter, Daileez.
In 2020, ID Launched it’s tender coconut and fresh-rated
coconut products.
17. Pricing Strategies
Competitive brands were priced between Rs 20 - Rs 30 (including grocery stores margin)and used
preservatives to increasing shelf life.
iD kept the prices similar to the competitors while focusing on freshness & quality.
iD used special kind of packaging that increased the packaging costs, but it gave customers
convenience of storing batter in the pack itself instead of bowl.
It took 9 months to meet the target of selling 100 packets daily
Got defeated in chennai market as the local players bought rice at subsidized rate and were able to
sell batter at much cheaper price.
18. Pricing Strategies
In 2014, iD purchase a german machine for Rs 10 million. This increased manufacturing
capacity and hygiene, and decreased their overall cost.
Focused on consumer market rather than being third party manufacturers
Reduced wastage by predicting demand accurately on store basis.
Launched a new brand ‘Daileez’ for price sensitive markets(rural and small towns)
Increased prices for organic products as it had comparatively high input costs
19. Covid & iDFresh
Ensured workplace safety and smooth production amid the
pandemic
Due to challenges in procuring raw material, iD scaled
down its production and focused only on key products.
Decentralized decision making process in order to cope
with changing dynamics of the region.
Implemented ‘Trust Shops’, unmanned kiosks with people
expected to deposit value of products and pick them up
on their own.
20. Future
Strategies:
Diversifying into newportfolios such as Fresh Noodles and dairy
products
Introducing different types of chappatis such as triangular
paratha as this product line as increased for iD.
Market expansion by penetrating into new domestic markets such as Northern
and Eastern region and internationally into the countries such as USA, Bahrain,
Qatar and Saudi Arabia
Setting up a plant in Dubai to minimize the transportation cost
and leverage tax-free incentives provided by the Dubai Govt.
Acquisition of local players to rapidly increase production.
