iD Fresh Food has a q-comm strategy and it is a no-brainer

In 2023, iD Fresh Food launched Frozen Fruit Pulp and Stick Butter and relaunched its ghee. It expanded its presence in the Middle East with Saudi Arabia. Meanwhile, its core products - batter, parota, paneer, and coffee - experienced robust growth. While batter continued to stand out, parota gained remarkable acceptance. 

According to Rahul Gandhi, chief marketing officer, iD Fresh Food, it is these three pillars- core expansion, new product launches, and geographic expansion- that has led to the company’s growth in 2023.

“With our core products expanding, the introduction of new items, and the exploration of new geographies, our growth narrative is compelling,” he says. 

The operating revenue has climbed from Rs 238 crore in FY20 to Rs 522 crore in FY23. During this period, the losses declined from Rs 42.80 crore to Rs 32.88 crore. In the three quarters of FY24, iD has witnessed nearly a 10% increase quarter on quarter.

For a business to navigate a successful journey, numerous external and internal factors play pivotal roles. External considerations such as the category's scale and competitive landscape, significantly impact a company's trajectory. In the case of iD Fresh Food, operating in a category with substantial scale and minimal competition created an appealing niche. Internally, the company’s strategy emphasised creating a model that is hard to replicate.

“ID's model stands out due to its uniqueness: no distributors, minimal warehousing, limited credit involvement, and sparse inventory. With multiple manufacturing locations, an in-house fleet, and dedicated on-site personnel, ID's approach is markedly distinct and challenging to imitate. This strategic distinctiveness became a shield against competition. The results speak for themselves, with turnovers nearly tripling, losses minimised, and the company achieving profitability in the current fiscal year,” Gandhi says.

Domestic Presence

At least 26% of its business comes from Karnataka and Bangalore remains its core testing ground. On an average, the company sells batter worth over Rs 100 crore in the city. 

“This city stands out as a pivotal market, boasting the maximum fleet, the longest-tenured team, and a wealth of experience dating back to 2005,” he adds. 

Beyond Bangalore, Delhi is its fastest-growing market. It has presence in 40 cities and the brand is also gaining prominence in Hyderabad and Kolkata. It is also growing its presence in cities like Lucknow, Chandigarh and Jaipur. It will soon be expanding to other cities. However, since its products are preservative-free, it faces the challenges of short shelf life. The further the city is from its manufacturing locations, the more uneconomical it becomes. 

Gandhi says that it is cracking this issue as channel partners are innovating. Quick commerce platforms have evolved as an answer. At least 35-38% of its business now comes from these platforms and is growing swiftly.

“The brand's partnership with these players facilitates seamless entry into new markets, making supply more accessible without the need for physical stores. As they order based on the consumption, the returns are also relatively lower,” he explains. 

A lot of its growth is driven from the top end of the market, which includes e-commerce buyers. “E-commerce has played a pivotal role in our success for four consecutive years, driving growth across various categories,” he shares.

International markets 

Currently, about one-third of the business is coming from the international market, mostly the Middle East, especially Dubai where the brand's turnover is comparable to Bangalore. UAE brings in a turnover of Rs 15-20 crore, while the Saudi market, where it launched recently, is already contributing around Rs 25-30 crore. Another 5% comes from the US and UK. 

The natural ecosystem of the Middle East is very different from that of India and presents some unique challenges. Thus, the company has adapted its strategy to suit the region. Unlike India, it is a desert. E-commerce is less prominent due to the region's long delivery times, hot weather, and extended distances. In this landscape, traditional channels such as modern trade and supermarkets play a crucial role. 

“Modern trade is particularly significant. So the shopping behaviour is fewer trips and monthly visits. Consumers tend to purchase in bulk, favouring items like frozen foods, as people often stock up during the scorching May to September period when venturing outdoors is less desirable. The local market's behaviour, influenced by the harsh climate, results in a preference for bulk storage options,” he says. 

The terrain and weather conditions define the SKUs. In addition to offering fresh products, it also sells frozen items in the Middle East. Currently, it supplies batter and fresh Parotas to the UAE and frozen Parotas to Saudi Arabia. As the prevalent tendency is to make bulk purchases, pack sizes are also larger.

Apart from Bengaluru, Hyderabad, Mumbai, and Haryana, the company has a manufacturing facility in Dubai. While the consumers are largely the Indian diaspora, the brand has observed in Saudi that the Arabs are also buying the Parotas. 

Marketing strategies

iD Fresh Food spent Rs 35.30 crore on advertising in FY23, a 25% increase from Rs 28 crore in the previous financial year. Its media plan mirrors consumer behavior, aligning with their habits across various channels. It employs a strategic mix of digital and TV advertising and allocates a significant portion of its marketing budget to conversion.

“After spending on digital and broadcast, we need to convert the consumer. The conversion is mostly happening online or at the point of sale, in the store. So we need to be very salient there and spend a significant amount of our budget there,” he adds.

In a bid to boost its expansion to other cities, the brand partnered with Sony LIV’s food show Masterchef India. 

“In the other cities, people don't really know the brand. So we associated with an impact property to increase awareness. Masterchef and Sony LIV seemed to have the right audience and it fit the brand's priorities very well. Also, it helped us establish the versatility of our brand,” he adds.

Gandhi says every integration decision revolves around determining its relevance to the brand, assessing the specific need for integration at that moment, considering the associated costs, and evaluating the target markets. 

“The choice between long-form and snackable content depends on the brand's priority. Whether to use long-form content to demonstrate the product or opt for snackable content to engage audiences escaping traditional advertisements hinges on strategic considerations,” he shares. 

The brand also spends considerably on influencer marketing. “People spend so much time on social media, that we can't ignore influencer marketing,” he says.