iD Fresh Food, the brand synonymous with wet idli-dosa batter in the country, is rapidly expanding its product portfolio. The brand entered the diary segment recently and added ghee to its offerings in August 2022.
The brand is eyeing doubling its revenue to Rs.1,000 crore ‘very soon’ and is set to launch a packaging initiative, which it promises will be a “first to market cut through innovation”.
In conversation with Medianews4u.com at the company’s Bengaluru office, Rahul Gandhi, CMO – India & UAE, iD Fresh Food, spoke about sales expectations from the dairy segment, marketing plans, market share and more.
iD has forayed into the diary segment with the launch of paneer a few years back. In August 2022, you entered the ghee market. Reportedly, the segment clocked Rs.100 Crore in 2022 via sales of paneer and curd. By adding ghee to the product portfolio, how do you assess the segment performance? What are your sales expectations from the segment?
Before foraying into any new sector, iD takes a few things into consideration. The first one is whether the sector is large enough.
Second factor is whether there is a differentiation available for us to enter the sector. Diary is a very large sector. We haven’t entered into all the product segments. The first product with which we entered the segment was paneer, for which the difference we had was that we are possibly the softest paneer in the market. It is not actually a differentiator, but a category necessity. iD Paneer is made from lemon juice and not from citric acid. There are a set of consumers who are willing to pay a premium for natural ingredients, especially the urban population.
Then we entered in the curd segment. The two products have done very well for iD, both put together are close to Rs 100 crore in FY 22.
Third factor we consider during the launch of any new product is whether it is married to our supply chain because the iD supply chain is probably the biggest USP that keeps the competitors away.
Ghee is a natural extension and is a market pegged at between Rs. 8,000 and 10,000 crore. Ghee which we consume is made from butter. If we see how it’s getting manufactured, some of the butter is stalled for over a year in blast freezers and then converted to ghee and served fresh. I wasn’t aware of this as a consumer. What iD did or is doing is that we take the milk, skim the cream out of it, convert to ghee and provide it to the consumers. We have launched it in Bombay and are yet to launch in our main market, Bangalore.
Dairy is a category which has challenges of competition. When competition is high, profitability is a challenge. We are trying to make dairy business profitable by charging a premium through the differentiator we offer.
By adding ghee to the portfolio, we plan to achieve Rs.150 crore in the segment in the short term.
Reportedly, the wet idli-dosa batter is valued between Rs.1,500 to 4,000 crore. What is the market share of iD Fresh? How do you see that growing?
The numbers which you have mentioned include home-made and unorganised segment products as well. The branded segment of wet idli-dosa batter is valued between Rs. 400 and 500 crore.
In the branded wet-idli dosa batter segment, iD holds a market share of around 75 to 80 pc. It goes as high as 90pc in markets like Mumbai.
Bangalore is our biggest market which is 40 pc, followed by Mumbai and Dubai, then Hyderabad, Chennai, and Pune.
Delhi is going to cross some of the markets like Pune very soon. We are on the verge of launching a factory in Delhi. While we were transporting the products from Mumbai to Delhi, the Delhi market alone is doing Rs.8 to 10 crore.
The ready-to-eat (RTE) and ready-to-cook (RTC) brands have witnessed huge growth during the pandemic period. Can you throw some light on the brand’s growth in terms of numbers during the pandemic period?
Pandemic made people very conscious of their health. Supply chains of many companies shut down, iD luckily has its entire supply chain in-house iD, since launch, has been talking only about one thing: eat preservative and chemical-free food. That narrative got amplified globally. We got some tailwinds there. We were fast to latch on to e-commerce and had a joint venture with Big Basket, launching a brand called iD Fresho at that point of time. We amplified our marketing spends during 2020-21 which was higher than the previous year. We tripled our marketing spends in 2021-22 compared to the previous year.
We are currently clocking a two-year CAGR in excess of 45 pc.
Within the iD Fresh product portfolio, you have wheat chappati, Malabar parotta, wheat lachha paratha. How’s this segment faring for the brand and how do you see that growing?
Dubai is the largest market for iD Malabar Parotta, followed by Bangalore, Chennai, and Hyderabad.
In the overall iD portfolio level, if you add India and the UAE, Malabar Parotta and the wet idli-dosa batter are fighting a battle every month. Both of them are 35 to 40pc of the business each.
How are the other South Indian markets like Chennai and Kerala faring? How are UAE and the US contributing to overall sales?
Chennai market has had 100pc growth over the last one and half years to two years. We have launched an economy dosa idli batter named Super Batter which is doing very well for us. Parottas are also doing very well in the Chennai market.
Kerala also has a growth of 90pc and we have taken this year’s growth target as 100pc.
As a percentage, they have a smaller base, but they are doing very well. The fact is that our largest and smallest markets are growing at a rapid and strong pace.
Our UAE and the US markets contribute 30 pc to our overall sales.
Can you throw some light on the online sales of id Fresh products?
Online sales for iD products are growing upward.It is giving very good ROI for the spends we are doing.
Online’s sales are 4 to 5X up compared to 24 months ago.
What are your broader marketing and ad strategies?
Bangalore is a market where iD products are very well distributed and it is a big enough business to afford broadcast media. We advertise in all top channels in Kannada and are as loud as the largest FMCG food brands in Bangalore. This has yielded very good results for us.
From a marketing perspective we do a lot to drive brand salience. There are two aspects to it. One is that you build a core iD mother brand for what it stands for and communicate the value to the consumers. The other is the market for the category.
Ours is a brand which has been built on consumer trust. In terms of innovative packaging, we are coming up with something new, which will be a first-to-market cut-through innovation.
iD embodies the caregiver of the house who cares for the family health. We tend to communicate our values and ethos that we want to make the world a better place while making sure that people are eating healthy, which comes through our various campaigns.
On the digital front, we advertise on major OTT platforms like Voot, Disney+Hotstar, Zee5, SonyLIV, and more. OTT platforms and Youtube are a very big part of our campaigns.
Lots of our spends go towards e-com platforms like Swiggy Instamart, Big Basket, Zepto, Dunzo, Blinkit, Amazon etc. These are good trial drivers, a lot of modern brands are built out of these channels.
65 pc of our marketing spends are skewed towards digital and 35 pc towards broadcast media, print etc.
What’s the revenue target for 2023?
We are clocking a Rs.500 crore run rate as we speak. Hopefully, this year we will be close to Rs.600 crore and will continue on the growth rate to reach Rs.1,000 crore very soon.
