iD Fresh Food Founder PC Musthafa Mints Millionaire Employees

PC Musthafa’s success shows that rising demand for healthy foods offers opportunities for entrepreneurs in India says Sunil Mani

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By Sunil Mani

Last month, during the festival of Diwali, in many upper-and middle-class homes in India, celebrants consumed sugar and fat laden ladoos and halvas along with healthier dried organic fruits and baked potato chips.

Indeed, consumption of healthy snacks and foods is rising in India, even as traditional snacks remain popular: from idlis, dosas, and appams in the south to samosas, kachoris, and chaat in the North, as well as a wide range of sweets from jalebis to gulab jamun and rasgoolas.

Typically, families cook at home as well as buy papads, potato chips and other snacks and also choley, pao bhaji and other prepared foods from local stores and via online platforms. During the COVID-19 lockdown, 2020-2021, there was a rise in purchases of snacks and prepared foods. This was in part due to wider adoption of online shopping by consumers.

The annual retail sales of snacks and prepared foods in India, including healthy varieties, is currently about Rupees 47,000 crores (US$5.3 billion), according to imarc. Sales are likely to exceed $10 billion over the next decade. Roughly 150 million Indians, or ten percent of the country’s population, have rising disposable incomes. They drive demand for a range of discretionary purchases, from fashionable Levi’s jeans to Johnnie Walker whiskey. In addition, there are about 35 million people of Indian origin living abroad, who have sizeable purchasing power and a taste for Indian food.

Not surprisingly, given the size and a growing market, there is intense competition among vendors of snacks and prepared foods in India. They include large multi-nationals like PepsiCo, Nestle and Norway’s Orkla. Also, major Indian firms such as Haldiram’s, Balaji Wafers, and Bikaji Foods. In recent years, several startups have emerged, in part due to rising demand for healthy foods. They include Farmley, TagZ, Bonvie, and TooYumm! Their advertising and packagaing is adorned with buzzwords like low-fat, gluten-free and no added sugars.

Farmley, for instance, markets a “honest snacking” range of dried fruits and nuts, with advertisements that feature Rahul Dravid, a former member of the Indian cricket team. The vendor’s online platform sells a 77 gram pack of farm-sourced Roasted and Flavoured Makhana (fox nuts) for Rupees 238, ($2.70), based on a four pack purchase. The flavors of the nuts, which have no added sugars, include Cheese & Herbs. Farmley’s prices are roughly 20% to 60% higher than traditional versions of the snacks sold by retailers like Big Basket and Jio Mart.

TagZ offers popped potato chips with 50% less fat. TooYumm!, a brand from the house of Guiltfree Industries, endorsed by Virat Kohli, another former member of the Indian cricket team, promotes air-fried alternatives as “zero guilt” snacks.

The visibility and distribution of such foods nationwide has been vastly expanded by online retail platforms like Big Basket, Blinkit and Zepto. Also, platforms such as The State Plate, Foodwalas and Oorla say they offer a curated selection of snacks and prepared foods.

(Photo: PC Musthafa, co-founder iD Fresh Food, right, with his parents.)

iD Fresh Food, a startup based in Bangalore, has emerged as a major vendor of healthy versions of traditional prepared foods. Its dosa-idli batter, for instance, is made with natural ingredients and purified water and has no preservatives. Last year, the preservative-free Malabar paratha overtook the dosa-idli batter as the company’s top-selling product. Priced around Rupees 60 ($0.66) for a pack of five, demand for the parathas is growing by more than 15 percent annually, in part due to new healthier millet-based products.

In fiscal year ended March 2025, iD Fresh’s revenue grew by 22 percent to Rupees 681 crore ($88 million), with profit rising more than fivefold to Rupees 26 crore ($2 million).

iD Fresh’s motto is “Stay Safe. Eat Healthy.” The company is “helping make home-cooked meals more convenient for home-makers and working professionals,” Chief Executive PC Musthafa told Forbes.

Since its founding in 2005, by Musthafa and his four cousins, the company has expanded into selling coffee, frozen fruit pulp, chutneys, paneer and breads, including chapatis and parathas. The products are sold via roughly 30,000 retail outlets in India, Saudi Arabia, the United Arab Emirates, Oman, the United States and the United Kingdom.

iD Fresh runs large automated kitchens, or factories, in Bangalore, Chennai, Mumbai, Hyderabad, Mangalore, and Dubai. The daily capacity at its flagship factory in suburban Bangalore is 100,000 kilograms of batter, for idlis and dosas, and 300,000 parathas.

Musthafa earned an MBA from the Indian Institute of Management, Bangalore, 2007. Earlier, he earned a degree in computer science from the National Institute of Technology, Calicut, Kerala.

He is the son of a daily wage laborer, who worked on a ginger plantation in Wayanad, Kerala. Since Musthafa’s family had no money, his school teachers collected funds to pay for his fees at a junior college in Kerala. Through a charity, he got free food and accommodation. “It was a humiliating experience as others (students) made fun of us. But that helped my determination grow,” he told Gulf News.

Musthafa, 52-years-old, founded iD Fresh after a cousin called saying, “Let’s create a quality batter company.” This was after the cousin heard a customer complain about the quality of the idli batter. Musthafa, who was then working in Dubai, invested Rs 25,000 ($300) to fund his cousins. In their 50 square feet grocery store in Bangalore, the cousins started making and selling batter after buying a grinder, a mixer, a sealing machine, a weighing scale and an old, used scooter for delivery. In 2008, Musthafa quit his well-paying job to return to India and run iD Fresh. “I always wanted to run a business” he told an audience at the Harvard Kennedy School in 2018.

As with iD Fresh, many food startups which have expanded across India, began in home kitchens or small-scale units, much like the halwais and papad makers of earlier times. Assuming their food is tasty and safe, entrepreneurs can reach more consumers by using online retail platforms.

Traditional vendors too are pursuing sales of healthy foods. Haldiram’s is selling baked and low-fat snacks while Balaji Wafers offers smaller pack sizes for calorie-conscious consumers. Also, startup brands are being bought by legacay companies. For instance, the protein-bar vendor RiteBite was acquired by Marico-owned True Elements. There are then collaboration and co-branding agreements between startups and large vendors.

While vendors and platforms aggressively promote healthy snacks and foods, consumers should purchase only from those with a reputation for quality ingredients which are not ultra-processed. Nutrition scientists warn that foods made from refined ingredients, additives, and artificial flavourings are linked to obesity, type-2 diabetes, cardiovascular disease, and even mental health issues, according to The Economist.

As iD Fresh found, some people spread false rumors about the quality of food sold by a vendor. In 2021, the company filed a complaint with the police and with WhatsApp seeking action against those who falsely alleged on the social media platform that iD Fresh products were made using animal extracts. As part of the measures to counter such rumors, Musthafa gave the media open access to the manufacturing plants, showing that only vegetarian ingredients were being used.

For the first eight years, iD Fresh had losses and, at times, had problems paying its 25 employees. Musthafa sought to motivate his employees by saying that one day they would be millionaires. “They laughed it off, but we gave them shares from our company and said, ‘Be patient!’.” Such sharing of ownership with employees is rare among Indian businesses.

iD Fresh, which has raised $119 million from venture capital funds, was valued at Rupees 2,200 crore ($290 million) at its last funding round, according to CNBCTV18. Investors include Premji Invest, the VC arm of Azim Premji, the founder of Wipro, a Bangalore based information technology company with a market value of $28 billion.

Musthafa told the media, “Finally, we fulfilled the promise we made to our employees; all of them are now millionaires,”