After foraying into the dairy segment with curd and paneer, iD Fresh Food is now ready to introduce its range of ghee. This year, the company is poised to earn Rs. 100 crores from its dairy portfolio, and with the launch of ghee this month, it expects to take it to more than Rs. 200 crores in three to four years.
According to industry estimates, the ghee market is estimated to be worth Rs 10,000 crore. It is a crowded market, dominated by traditional players like Amul, Mother Dairy, and Paras Milk Foods.
But Rahul Gandhi, chief marketing officer, iD, says there is still space in the market for growth. Dairy is an attractive segment, and iD is a serious dairy player in the geographies it operates in. “We have had success with paneer and curd. An iD paneer on any ecommerce platform will have a market share in the mid to high 20s. Ghee is a natural extension of the dairy portfolio because it’s one of the large categories. In terms of category size, ghee is larger than curd and paneer put together”, he says.
“The category is still being created and is still heavily under penetrated.” “The category creation is probably going to take the next 15-20 years, and at that time we’ll think that iD was one of the early players,” he says.
Gandhi believes that people are constantly experimenting with food. They are always looking for something that offers them better value. Everything that offers them value seems to be successful. I don’t see why ghee should be any different”, he says.
Product Differentiator
When iD enters these markets, it looks for a consumer need that is yet unserved. In these categories, its strategy is to bring the manufacturing process as close as possible to kitchen practices.
Similarly, with the ghee, it will be made from fresh milk cream. Some brands make ghee from frozen butter, which may be stored for up to a year. But iD’s differentiation is its manufacturing innovation.
The iD ghee is currently available in the Mumbai and Pune markets in one kg pouch (Rs 689), 500gm pouch (Rs. 350) and 500gm pet jar (Rs. 375). This is slightly higher priced compared to its rivals in the market. A 1-litre pack of Gowardhan, Amul or Nandini ghee costs between Rs. 450 and Rs. 500.
Id is targeting consumers who are aware of the need to consume conscious foods and are willing to pay that slight premium for a better product.
Packaging Innovations
In every category that iD enters, it attempts to bring innovations and convenience to the consumers – whether it is the ‘squeeze and fry’ vada maker or the naturally packed grated coconut in a coconut. With the ghee, it has introduced a spout in the 500 gm pouch that enables one to conveniently pour out the ghee.
People tend to transfer the ghee from the pouch or metallic tin into a stainless steel container. We found that it can be pretty inconvenient. We are the first players to have a pout in the packaging. Ghee is used in very small portions. So it is very amenable to the pouch format where you unscrew it, take as much as you need and then keep the rest,” he adds.
In the dairy segment, iD has another innovation in the pipeline—a butter stick.
iD’s expansion
Launched in 2005 with idli-dosa batter, it has been constantly expanding into newer categories. It now sells paneer, curd, chappati, parotta, bread, filtered coffee decoction, tender coconut, and grated coconut. Currently, 70% of its revenue comes from batters and Indian breads and 30% from the rest.
“Both are equally big for us. Batter is big in India and parotta in the UAE. “After these two, our paneer has done really well,” Gandhi says.
While foraying into newer segments, the company looks at the attractiveness of the category in terms of size and profitability, how likely it is to succeed in it and whether it will be able to provide a differentiator. It also needs to align with iD’s brand ethos of offering fresh, healthy, and natural products.
Apart from experimenting in the batter and Indian breads segment, where it is attempting to be a category leader, it is also looking to innovate in food categories that have a long shelf-life, like cookies, spices, honey, etc.
“In the long-term iD wants to establish itself at the intersection of convenience and health. ” It’s a very ripe space right now, and iD is occupying it very well. Like we did with batters, we are looking at other food categories that the homemaker finds it difficult to make. We don’t want to give anything ready to eat because we want the homemaker to have control over the last ingredients,” he says.
A brand’s value resides in its ability to own a distinct association in people’s minds. That happens over time through a clear understanding on the part of the brand’s owner of what it essentially is and then a consistent manifestation of that core identity across all its various touch-points. The association need not be restricted to establishing it around a particular product or category.