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UAE: Idli-dosa 'batter king' Musthafa sees huge growth opportunities for his food brand in Emirates

The country contributes to 25-30 per cent of the overall revenue, says CEO

Idli and dosa, staples among Indians, have seen a surge in consumption in UAE homes during the pandemic, thanks to P.C. Musthafa, the CEO and co-founder of iD Fresh Food, who has revolutionised the healthy and fresh food business with the batter used to make the dishes.

The son of a coolie (daily-wage worker) from a village in Kerala, Musthafa had to drop out of school but went on to complete his engineering and topped it with a management degree. His is an inspiring story of beating the odds.

Today, the company's idly/dosa batter products are sold in more than 30,000 stores in India and abroad, including the UAE. “We are passionate about innovation that benefits our customers, our farmers, and society. Making healthy Indian food accessible and affordable for people across socio-economic strata is as much about embracing state-of-the-art technologies as it is about keeping things simple,” he says in this interview.

iD Fresh is expanding into new markets after India and the UAE. I understand you have a unit in Ajman. Do you see your Gulf foray as a homecoming back here as an entrepreneur?

UAE is an important market for iD Fresh. We see huge growth opportunities and have aggressive expansion plans for the region.

As far as homecoming is concerned, you are right. Saudi Arabia and Dubai were home to me early in my professional life. I have beautiful memories of those times. In fact, it was during my stay in Dubai that I finally mustered the courage to quit my lucrative corporate job and pursue entrepreneurship in India.

Are you obsessive about innovation in the fresh foods sector that you are a pioneer in?

Honestly, when we started our modest operations in a 50-sqft kitchen in Bengaluru in 2005, we had no such aspirations!

Back then, it was a common sight to see idli and dosa batter being sold in unhygienic plastic covers sealed with rubber bands. My cousins, Abdul Nasser, Shamsudeen T.K., Jaffer T.K. and Naushad T.A., and I were perturbed by the poor hygiene standards and thought, ‘Why don’t we do it better?’ That’s how iD Fresh was born – as a simple solution based on common sense.

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 based on the same principle. We thought – ‘How can we make it easier for people to enjoy scrumptious home-made vadas?’

As I see it, innovation is nothing but understanding people and solving their problems using common sense. It’s the job of entrepreneurs like me to identify great business ideas, execute them well, and scale up. And, yes, I take my job very seriously!

iD has narrowed losses after the worst phase of the pandemic. Is it a growth versus profitability scenario here?

The business has to be profitable, otherwise, it is not a business. However, profit has never been the end goal for iD Fresh. Growth and innovation drive us towards creating a business that makes a positive difference in people’s lives.

At a time when companies across the globe were looking to increase the shelf-life of food products, iD Fresh 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 1,500 kg batter an hour – 100 times the output of traditional machines.

Whether it is our award-winning, boat-shaped, reusable packaging for the idli and 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.

We are committed to exploring the benefits of adopting 930 natural packaging. Not only does the food stay fresh for longer, but the environment stays greener too. Our Smart Sip Tender Coconut and Grated Coconut in a Coconut are completely plastic-free products. They come in ‘God’s own packaging’, taking us one-step closer to a plastic-free future.

At iD Fresh, we are passionate about innovation that benefits our customers, our farmers, and society at large. Making healthy Indian food accessible and affordable for people across the socio-economic strata is as much about embracing state-of-the-art technologies as it is about keeping things simple.

What are the revenues from the UAE market? How big is the UAE to your business and growth? How many dosa and idli packets do you sell in the UAE?

UAE contributes to 25-30% of our overall revenue. Last financial year, we clocked Rs100 crore (Rs1 billion) from our UAE business and sold around 2.5 million idly-dosa batter packs serving approximately 50 million idlis or 30 million dosas

Break-even by this year? You have been in the business since 2005.

We’d like to keep this information for a later stage. Our current (revenue) run rate is Rs5 billion. Currently, the company caters to over 45 cities, across 30,000 retail stores in India, UAE, the US, and the UK

Ready-made food is a tough business. The competition is fierce. What sets you apart?

Yes, packaged food is a tough business. However, over the last 17 years, we have been at the forefront of revolutionising the fresh food segment.

For starters, we are synonymous with 930 natural and nutritious food prepared in hygienic kitchens, not laboratories. All our products are prepared without using any chemicals, preservatives, or artificial colours.

Positioned as your professional assistant in the kitchen, our products help you rustle up healthy and authentic Indian meals in a jiffy.

It's also important to note that we own the entire supply chain, thereby enabling us to maintain agility in meeting changing consumer demands while exercising strict quality control and faster speed to market.

You are self-made and come from humble beginnings? Does it keep you and your business grounded?

Our early years in life shape us in countless ways. As the son of a daily wage labourer in a remote village in Kerala, life wasn’t always easy. Our village had no electricity, no roads, and only one primary school. For high school, children had to walk miles. So, they usually dropped off after the 7th Grade and worked in paddy fields, coffee farms, and tea shops.

I dropped out of school too in 6th Grade but later with the motivation from my teachers, I got back to school. Eventually, I went on to pursue computer engineering in Coimbatore before graduating from IIM Bangalore. My humble beginnings taught me gratitude, patience, hard work, perseverance, and resilience.

My decision to quit a well-paying corporate job and become an entrepreneur was driven by the desire to make a difference in people’s lives. My cousins, Abdul Nasser, Shamsudeen T.K., Jaffer T.K., Naushad T.A., and I wanted to build a better world that is powered by kindness, empathy, trust, and equality.

Your business has some major backers, including Azim Premji. Any new round of funding as you eye growth?

Earlier this year, we raised Rs 507 crores (Rs5b) in Series D round of funding, led by Asia’s leading secondary private equity firm NewQuest Capital Partner, along with existing investor Premji Invest.

We look at growth as a constant process and we will definitely be raising more funds in the future. However, there are no concrete developments on that front for now.

An offbeat question: Do you make a good dosa?

For the longest time, I couldn’t. But with our new iD Dosa Maker, even I can make perfectly round, crispy dosas. We plan to launch it in the market soon.

How do you gain and retain employees during the pandemic and great resignation?

Our endeavour is to become one of the most sought-after companies to work for. We have been at the forefront of offering ESOPs to employees beyond the senior management. In fact, 48% of the ESOPs offered till date is to junior management, while the mid-management constitutes 20% and senior management 15% of the company’s ESOP pool.

During the pandemic, for instance, we supported our employees, appreciated their efforts, and assured them that there will not be any layoffs. In fact, we hired 100 employees across functions.