Exploring Uncontested Markets with Blue Ocean Strategy in Convenience Food Business-A Case of Id Fresh Food

By Shyam, Reena; Geevarathna | Journal of the International Academy for Case Studies, January 1, 2019 | Go to article overview

Exploring Uncontested Markets with Blue Ocean Strategy in Convenience Food Business-A Case of Id Fresh Food


Shyam, Reena, Geevarathna, Journal of the International Academy for Case Studies


CASE SYNOPSIS

The economic reforms in India has not only stimulated strong economic growth, but also resulted in fast paced urban lifestyles, rising disposable incomes, increase in the number of working women in the country also a significant change in its traditional social system. The upswing in the Ready-to-Cook (RTC) food business of India seems to be an important indication of changing economic and social lifestyles in India .The fast paced urban life styles often make the Indian cooking seem intimidating as it involves preparing homemade masalas and batters which some time ago was completely prepared in the kitchen to ensure quality and authentic taste. However in recent times with increase in dual income families for who work life balance is a major challenge, convenience food is a popular alternative. The Indian food market is the world?s 6th largest and accounts for approximately 31% of India?s consumption basket; (Maerschand, 2016). In the food category the RTC segment has emerged as the next best alternative to home cooked meal. The total processed foods market in India stands at Rs.1500 crore out of which the RTC segment share is 600-700 crores (barring noodles) and is expected to grow around 20-25 per cent over the next five years (Indian Brand Equity Foundation, 2017).

Innovation the Only Way to Stay Ahead-The RTC Sector and Strategic Moves of Id Fresh

The Indian convenience food business includes both packaged Ready to Eat (RTE) and Ready to Cook (RTC) food. An RTE meal needs to be heated before eating while RTC meal means food that has been seasoned and prepared but still needs to be cooked. Some of the choices in the RTE category range from gravies, dals, biryanis, sweets and desserts while the RTC group includes breakfast-mixes, idli and dosa batter, masala mixes and dessert mixes. (Chandran, 2016).The established players in the Indian RTC market include MTR Foods (Bengaluru), ITC Limited (Kolkata), Desai Brothers Ltd (Pune) and Gits Food Products Pvt Ltd (Pune). ABT Foods Limited (Coimbatore) is one of the emerging brands in the RTC food market. These popular brands have always gained attention from the consumers, mainly because they keep involving innovations in their product line (Food and Beverage News.Com, 2018). With the market showing signs of high growth potential, players like iD have left no stone unturned in responding to the expanding demand for its food products. Although iD started with batters, the company has expanded its product range of RTC products by adding parota, chapati, paneer, curd and a healthier option of ragi batter. iD has a total network of 20,000 stores spread across Karnataka, Tamil Nadu and other states. The revenue generation for iD has been highest from its outlets in UAE market. The company has been successful in attracting funding from Helion Ventures which invested around 23 crores and also raised 150 crores from Premjiinvest, the private investment office of Azim Premji for an equity stake of 25% in the company. The funding would be used for up gradation of its existing manufacturing facilities, establishing new distribution networks and R&D that would in turn help iD expand into international markets such as US, UK and Singapore (Balasubramanyam, 2017). The company, which test-marketed the coffee decoction products in the last three months of 2018, expects the business to generate about 2.5 crores in revenue in February itself. This, along with geographical expansion and related lines of diversification such as diet batter is expected to help the startup's revenue to grow 45% in 2019-2020 (Figure 1).

Over a span of 3 years the company's endeavors to constantly innovate has paid off with the new product development-vada maker, which promises "perfectly shaped vadas with a hole in the middle ".

It allows users to squeeze vadas directly into hot oil and avoid the messy, timeconsuming process of shaping them by hand. The vada maker has a unique umbrella nozzle for creating the round fluffy sphere with a cutter to ensure even sizes and a hole. …

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