According to global market researcher Technavio, India’s ready-to-cook market is expected to grow by $582.2 million between 2024 and 2028, with a compound annual growth rate (CAGR) of 7.83 per cent. iD Fresh Foods has long carved its niche in this market with its natural “free-of-preservatives” products, most popular among which are its idli and dosa batter. Today, the Bengaluru-based company is all set to foray into spices in September (a few months later than planned), take its production bases off-shore and launch an aggressive market expansion plan from the third quarter the company’s CEO, Rajat Diwaker told DH’s Sonal Choudhary and Abhilash Reddy, during an exclusive free-wheeling conversation. Edited excerpts:
What is your outlook for the current fiscal year and how has the financial performance been in the recent quarters?
Last financial year (FY24) was a milestone for us because we crossed Rs 550 crores in turnover, globally, out of which 70% comes from India. This year is also going well and we should be comfortably doing Rs 700 crores with double-digit earnings before interest, tax, depreciation and amortisation (EBITDA).
When do you plan to launch your spice business? Wasn’t it supposed to happen in June? Any innovations planned to enter this competitive market, especially in light of recent international bans on some leading Indian spice brands?
Spices is a very large category and that’s what excites us. We'll be launching spices in two phases. In the first phase (by mid September), we will launch blended spices which will have a QR code on the back for the customers to read about the quality and the pesticide test that the batch has gone through. The second leg of innovation would be wet spices (six months down the line).
We started working on our spices innovation much earlier than what transpired very recently with the brands. As a principle, we do only clean label products and therefore, our product portfolio will always remain preservative-free.
The company recently announced an expansion into 11 cities. How many stores do you plan to open, and how much investment went into this expansion?
I will not be able to disclose the investment that went into it, but by the end of this year we'll have 50,000 stores in total. Once we complete the entire expansion plan in these 11 cities, we will begin our second phase, sometime in the third quarter of this fiscal with a plan to expand to the next 40 cities. This effort will be led primarily through South India and then the rest of the country.
You raised Rs 501 crore in a Series D funding in 2022. When do you plan to go public?
Yes, we do have concrete plans to go public in another three years with a target of Rs 1,100 crores in turnover and 20% EBITDA. Additionally, we are expecting to grow at a compound annual growth rate (CAGR) of 26% every year, for the next three years. The confidence comes from our plans of distribution and manufacturing footprint expansion as well as a pipeline of new innovations.
Are there any specific regions or cities where you're seeing a surge in demand for ready to cook food products ?
The household penetration is high in south Indian cities. Having said that, in North India, our manufacturing is growing upwards, 25-30% every year. The propensity of consumers to have healthier food has increased with idli becoming a prominent breakfast option in north, west and east India.
What is the revenue wise breakdown of the business coming from quick commerce, e-commerce, online and offline stores in the latest quarter?
For us, it's a pretty much evenly spread business. There are four different channels in which we operate - general trade, modern trade, quick commerce, and B2B as well. So we are not heavily dependent on any one channel.
What is your outlook on the overseas market? Do you see a demand uptick there?
Yes, we have a pretty ambitious global expansion plan over the next one and a half years. We are planning to have a manufacturing footprint in Singapore, Saudi Arabia and USA by the end of fiscal year 2024-25.