P.C. Musthafa: The breakfast king7 min read . Updated: 23 Nov 2018, 09:54 AM IST
The co-founder and CEO of iD Fresh Food tells Mint that technology, design and innovation are essential ingredients for a packaged food company
Midway through our conversation, as we discuss the popularity of new-ish food trends (like the ultra-low-carb keto diet), P.C. Musthafa takes out a steel dabba from his bag. Nestled inside the shiny square box are four idlis, perfectly round and puffed up like new pillows. “The most nutritious food in the world," says Musthafa, CEO and co-founder of iD Fresh Food, with a flourish. “I can have idlis for breakfast, lunch and dinner."
It can’t be denied that idlis are healthy. Made from parboiled rice and urad dal with a pinch of methi (fenugreek) added to the batter, which is fermented overnight, idlis are steamed, not fried. Each idli delivers a mere 40 calories with approximately 2g protein and 2g fibre for 8g carbohydrates, with zero saturated fats and cholesterol.
Musthafa wants to convert all Indians (potentially, the entire world) to an idli-dosa breakfast—of course, made using his company’s zero-preservative batter. The company is setting up four world-class plants in Bengaluru, Hyderabad, Mumbai and Dubai, with the 5.5 acre Bengaluru plant set to open in January, and the others later in the year. It will be able to process 200,000kg of iD’s signature idli-dosa batter every day—enough to make five million idlis. But is there enough demand for that many idlis in Bengaluru? Musthafa does the math quickly: “The population of Bengaluru is 12 million, of which say 80%, or 10 million, people eat idli and dosa every day. That’s easily over 20 million idlis per day (with a per capita consumption of 15 idlis per week). That’s the opportunity." Supply creates demand, he believes. “When we started, the market for ready-made batter was 300kg per day. Today, it is 40,000kg per day in Bengaluru alone," he says.
Till the plant is set up on the outskirts of the city in Attibele near the Tamil Nadu border, Musthafa and team are working out of a co-working space in Whitefield. “I like the energetic and youthful vibe here. It keeps me young," he says. Not that he faces any major challenge in the looking young department: the 45-year-old Musthafa is trim and sprightly with a boyish face and demeanour.
iD Fresh Food India Pvt. Ltd was founded by Musthafa and his cousins out of a small kitchen in 2006. The company also sells ready-made Malabar parotas and chapatis (whole wheat and refined flour variants), ragi and oats idli-dosa batters, paneer, curd, vada batter and filter coffee decoction (the last two have been packaged for the first time). Belonging to a close-knit community of Malayali Muslims, the cousins used to run a small supermarket in Bengaluru’s Indiranagar area, where Musthafa, who was working in an IT company, would often hang out. Seeing a demand for ready-made idli-dosa batter, Musthafa’s cousins had contracted a local vendor to supply it, but it was erratic and of poor quality. “There were hygiene issues. Sometimes customers found cockroaches in the batter," recalls Musthafa.
He convinced his cousins to start a company selling well-packaged, well-regulated products with a solid supply chain to ensure reliable delivery to supermarkets and stand-alone stores in Bengaluru. The initial investment was around ₹ 50,000, pooled in by all the cousins.
Today, iD’s investment into the upcoming plants alone is around ₹ 100 crore, and when PremjiInvest, the private investment office of Azim Premji, picked up a 25% stake in iD Fresh in 2017 for ₹ 150 crore, it valued the company at ₹ 600 crore, The Economic Times reported in March 2017. The company, which has 1,600 employees, is eyeing ₹ 350-crore revenue in 2018-19, Mint reported earlier this year.
During a lecture delivered at the Indian Institute of Management, Bangalore (IIM-B), from where he completed an executive MBA programme in 2007 and where he was awarded a distinguished alumni award in October, Musthafa talked about building the company from scratch, and how his life had changed from the time he was a schoolboy. Born in a lower-middle class family in Kerala’s Wayanad region, his biggest ambition was to wear a clean white shirt to school every day, like some of his more privileged classmates.
“Forget a nutritious breakfast, we were lucky to have some breakfast. We ate anything available. Today, even as we fight a war against preservatives and junk food, I can’t forget that there are still people who cannot afford breakfast," says Musthafa.
His first big break came when he cleared the engineering entrance exam with a good rank, and joined the Regional Engineering College in Kozhikode (now National Institute of Technology, Calicut). After graduating in 1994, he worked in Bengaluru, Ireland and Dubai with various IT and telecom companies, before returning to Bengaluru in 2004 and signing up for the MBA programme at IIM-B.
iD’s supply chain management techniques—the company sells an easily perishable packaged product with a maximum shelf-life of seven days without adding any preservatives, or even baking soda—is a case study at Harvard Business School today. The paper, titled Demand Forecasting For Perishable Short Shelf Life Home Made Food At iD Fresh Food, by Raman Narasimhan, Amardeep Sibia, Shirsha Ray Chaudhuri, S.R. Vigneshwaran, is available on the Harvard Business Review website. “When the whole world was trying to increase shelf-life, we created a zero-inventory business model," says Musthafa, who delivered a lecture at the Harvard Kennedy School in February on the subject. “Throughout the supply chain, we don’t keep stock. If you go to the factory, you will see zero finished product," he explains.
How did they do this? The company started capturing very granular data—store-wise, day-wise and location-wise—on the number of units supplied, sold, and left unsold, and created a predictive algorithm that tells them exactly how many units should be supplied to each retail point every day. It helps them stay quality-focused, because they believe it’s better to understock than overstock, and better for customers to return empty-handed than buy a substandard product or for it to perish on the shelf.
This approach became a bit of a challenge for the company earlier this year when it launched its vada batter. The batter comes in a specially designed dispenser that the innovation team at the company took three years to develop—not only does the bottle squeeze out the exact amount of batter required to make one vada at a time, it has a ring-shaped contraption at the mouth that creates the perfect central hole of the doughnut-shaped vada. The launch of this product was accompanied by a marketing blitzkrieg—with video ads and teaser campaigns—and for at least a month after its launch, the units would be consistently sold out at stores by the middle of the day. Other food innovations have followed—like the south Indian filter coffee decoction which has been “bottled" (it’s actually available in a specially designed plastic pouch). “Indians typically don’t like packaged, ready-to-eat foods. Mothers are the gatekeepers and they are suspicious of ready-made stuff. That’s why we supply only the base—not the finished product. We don’t want to take centre stage. The homemaker can customize the base—add oats, dilute it, ferment it more—but she cooks the idli and puts it on the table," says Musthafa.
Besides innovative packaging design, constant experimentation, and attention to detail, the company has also consistently focused on marketing—especially emotive, socially conscious marketing. To create more faith in their products, the company realized that trust should go two ways. “Trust customers so that they will trust you," says Musthafa. In 2016, the company ran a three-month project called “iD Trust Shops" in 35 locations in four metros where their products would be kept in coolers without any supervision—no security or cameras—inside apartment and office complexes, and customers could pick up anything and pay anything. “When we started, it wasn’t a great success. People were dropping Monopoly money," says Musthafa. “But soon, the same set of people started dropping ₹ 500. Within a month we were making 100% collection." Their other successful campaign was titled Khana Khaya?. “Millions of parents talk to their children every day, and of course, there’s not so much to talk about. So every day, they ask the same question—“Khana khaya (Have you eaten)?" We realized that Indian parents are not very demonstrative, and this was their way of saying ‘I love you’," says Musthafa.
His current obsession is finding a replacement for plastic containers used to package iD’s products. “I have an appeal for your readers," he says. “If you have a solution to replace plastic—a practical, workable solution—please write to me. If it sounds like a good idea, we will invite you to collaborate with us."
Favourite meal: Mangalorean fish curry and rice
Business mantra: A brand cannot be built without values
Weekend vibe: Spending time with wife Sajna, an interior designer, and three sons, aged 16, 13 and 9
Favourite sports and sportspeople: I play badminton, cricket and football. Lionel Messi and M.S. Dhoni
A book that stayed with you: ‘Connect The Dots’ by Rashmi Bansal
So if you want “the world’s best breakfast" without adding to the world’s plastic burden, you could write to firstname.lastname@example.org.