Davos-2022
Davos-2022
Davos-2022
Davos-2022
business | IST

BACKSTORY: What the ID Fresh founder learnt from a case of exploding batter

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Every entrepreneur dreams about the market for his or her products exploding. But what if the product itself is exploding?

PC Musthafa and his four cousins started ID Fresh Foods in 2005, out of a 50 square feet kitchen in Bengaluru, with an investment of Rs 50,000, one mixer, one sealing machine, one weighing machine and a second-hand Scooty.
But it was only some months later that Musthafa and his team understood the importance of food technology in packaged foods.
"On a hot day in April 2006, I got a call from a store near Indira Nagar in Bangalore -- they said 'there's a bomb blast in my store; come immediately’," Musthafa recalled in an interview to CNBC-TV18 in 2018.
Every entrepreneur dreams about the market for his or her products exploding. But what if the product itself is exploding?
Musthafa and his team initially thought that the store manager was joking.
"We laughed. We said if you have a bomb blast in your store, please call the nearest police station, we don't handle bombs,” Musthafa recalled telling the store manager.
But it quickly became clear that the manager was furious.
"My team rushed to the store. The manager was very angry. He said ‘go clean my fridge, take all the leftover batter and go home’.”
Musthafa’s team – consisting his cousin and a salesperson – however was not keen to give up easily.
The salesperson took a pack of batter to the store manager to try to explain to him about the quality of their products.
"Before my salesmen could finish – boom! This pack of batter exploded as well – with white batter on his (manager’s) face," Musthafa said.
It did not take Musthafa and his team long to figure out the reason for the “explosion” and the solution to it.
"Batter ferments during summer. It expands, it forms gas and beyond a point, it explodes. We had no idea about food technology before we started this business. In fact, I learnt about this term called fermentation after this incident," Musthafa said.
A desire to succeed against all odds and a deep rooted value system are not mutually exclusive, as far as Musthafa was concerned.
The goal to make a mark for themselves in the Chennai market — considered to be the Mecca of idli — in particular posed the toughest challenge that the team had faced till then.
"We thought we had created world's best batter brand and then naturally we thought why don't we go to Chennai–the Mecca of idli," he said.
ID Fresh started operations in Chennai and quickly realised that it was a very tough market to break into.
To Musthafa's dismay, he found that unbranded batter was available for Rs 10 a kg, compared to the one sold by ID Fresh at Rs 45 a kg.
Curious, Musthafa and his team tried to find out how their rivals were able to sell batter so cheap.
He found out that the unbranded players were buying rice from ration shops that was available at one rupee per kg and making the idlis fluffier by adding large amounts of soda.
There were three options available for Musthafa & co.
"One was to follow this unethical, unhealthy practice but we didn’t want to take that shortcut. Second option was to take money on interest basis. We can’t take that route also because it was against my value system. Third option was to shut down the factory," he said.
And while Chennai undoubtedly was a lucrative market for idli batter, there was no way ID Fresh could have competed in a fair manner. That left Musthafa with just no choice but the toughest one.
"We decided to shut down the factory, sold all the assets, machineries and we decided to come back. We had to accept such tough decisions in our life but the courage to take such tough decisions in life helped us to create a strong brand that we're today," he said.
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