Why ID’s PC Musthafa Blindly Trusts His Customers And Countrymen
In a world ruled by distrust, Priya Ramani finds out what makes PC Mustafa’s “trust-based” business model work for ID Fresh Food.
Sometimes, communal hate doesn’t have the effect its perpetrators were hoping. It can rally existing and new support, and cause no more than a blip in business. When ID Fresh Food India (Pvt) Ltd. faced a co-ordinated misinformation campaign on social media in September saying the company uses animal extracts in its products (of course, it doesn’t), many consumers made it a point to go out and buy ID products and then posted about their support on social media. Now the company has raised Rs 507 crore to fund its scheduled expansion plans in India and abroad.
“It’s a nice feeling when your customers, vendors, employees, the whole world, stands with you in the midst of false propaganda,” says PC Musthafa, co-founder of ID, who in 2005, famously began a multi-crore business with an idea, Rs 50,000 savings, four cousins, a mixer-grinder and a weighing machine. “Everyone knows what we are, even if someone is trying to malign us.” And that’s all he will say on the subject.
This year the company will launch two new Indian plants – a smaller one in Delhi, and one in Hyderabad, along the lines of its Bengaluru unit, which began in 2021 and which has the daily capacity to produce batter for 2.2 million idlis. A batter manufacturing unit will be set up in New Jersey, U.S., later this year.
In a world where so many of us desperately look for hope, Musthafa describes himself as “very optimistic”. He lives in an alternate India, one in which people trust each other. In a country where neighbours increasingly feel alienated, ID positions itself as an honest, next-door neighbour.
It took some experiments, a strong belief in his countrymen, and a key learning to create this “trust-based” business model.
That’s also probably why the misinformation campaign against ID backfired badly.
Musthafa often shares his stunning son-of-a-daily-wage-worker-to-IIM-educated-Make-In-India-tycoon story at talks and conferences, sometimes to a standing ovation. But invariably, after his talk, at least a couple of audience members, usually women, will sidle up to him and say: “Bachcha, what do you add in the batter to get that soft idly?”
Despite the labelling, people refused to believe the batter is “100% natural”, he tells me. “We have always fought a war against preservatives but people still didn't trust us. We tried various ways to educate people, and earn customers’ trust but nothing worked.”
ID Fresh Food's idly-dosa batter packaging facility in Bengaluru. (Photograph: ID Fresh)
Until the company decided to try something radical: Trust people first.
“Can we trust customers,” company executives asked themselves. This was back in 2017-18, and they experimented by starting 35 unmanned “trust shops” in apartment complexes where people could pick their favourite ID products and pay without being monitored. In the spirit of fraternity, the company told consumers to invite their neighbours over for breakfast – ID would supply its food products free. “Some misused it of course, but we said, ‘no problem, we will trust’,” he says.
During the 2020 lockdown, they scaled up the ‘trust shop’ idea by offering it to 650 apartment complexes in Mumbai. “We said we will keep our products next to your security gate in a chilled box. Come down, pick up what you want and leave the cash or transfer the amount to our account,” says Musthafa. “Nobody was watching, yet 97% of the 20,000 or so people who came here daily, paid up.”
Thanks mainly to this experiment, he adds, the company has tripled its revenues in Mumbai in the last one and a half years. “What I’ve learned is, trust has to be blind trust. If you trust someone, they will trust you back,” he says.
An iD Fresh Food buffet served during a Meet Your Neighbour event. (Photo: iD Fresh)
The trust extends to other areas too. Customers who complain get a refund, no questions asked. Employees are never asked to verify attendance. Salesmen sell identical products with different pricing for corporates and retail, but nobody polices whether or not they are misusing this for personal profit. “We believe our employees won’t cheat us,” says Musthafa.
It’s not like Musthafa hasn’t encountered people who cheat. One time, from a trust shop in Chennai, the company received Monopoly money for weeks. They ignored it, until finally, one week, they got a five hundred rupee note. They surmised that the Monopoly player felt guilty.
When Musthafa first tried to get approval for the trust project from the residents’ welfare association of a gated community in Bengaluru, the retired men laughed at him and asked: “Were you working in the U.S.? This is India, this won’t work here.”
“Indians are trustworthy if you trust them,” Musthafa reiterates. His inspirations for this project were similar experiments from around the world and in our backyard: the open doors of Auroville and the harvested veggies kept outside homes in the northeast, where anyone passing can pick what they want and leave the money.
Participants of the ‘Meet Your Neighbour’ initiative. (Photo: iD Fresh)
The son of a daily wage worker, at 12 Musthafa had failed class six and was working on a ginger farm alongside his father, uprooting ginger, cleaning the soil around it, filling it in a sack, and loading the sack on a vehicle. His teachers helped him get back on track and he graduated, worked abroad, then decided to quit his well-paying job and be an entrepreneur with his cousins.
Few years into running the business as a partnership, when times were hard in 2014-15 and there wasn’t enough money to pay the 24 or so blue-collar employees on time, the cousins took a decision. They held a meeting in the canteen to share the news. “I told them we are going to give you shares. They thought I had called them to give them biryani and they were upset.”
When Musthafa told them the shares would be worth a crore in a few years, nobody believed him, but they stayed on in the company anyway through that difficult time.
On Jan. 3, he announced to these employees that they had indeed become “crorepatis”. “It’s not a gift, it’s your right,” he said. Once again, trust had yielded concrete returns.
Priya Ramani is a Bengaluru-based journalist and is on the editorial board of Article-14.com.
The views expressed here are those of the author, and do not necessarily represent the views of BloombergQuint or its editorial team.