Chennai-based Idli Factory sells up to 200 boxes a day

For a large part of his professional life, he was working for overseas clients. But when RU Srinivas decided to turn an entrepreneur, he wanted to do something for the domestic market. His argument: not too many people were taking the domestic consumers seriously enough.

And, being a self-confessed foodie, what better than get into the food business, catering to consumers at home. The dish that he decided to serve them: the ageless and timeless idli, re-shaped, packaged and served to eat on the go.

As to why the focus on the domestic market, a peek into Srinivas’ career provides the insight. He studied for CA during the day and attended evening college for a B.Com degree, then studied M.Com by correspondence, went to the US for an MBA and worked in a bank in Boston for three years as a loan analyst. He returned to India in 1993 and worked for companies that would allow him to, as he says, “have one foot in India and one foot in the US.”

He was largely in the IT/BPO space with his last job being CEO of Caliber Point, the BPO arm of IT company Hexaware. His job meant that he had to travel a lot and found that being a vegetarian, food was a major limitation. “It was beginning to get a little tiresome and I wasn’t enjoying myself as well. I decided to quit and do something else,” says Srinivas, in his first-floor office in the same house he grew up in, in what was once a quiet residential part of Chennai. The ground floor serves as his “factory”.

Triggering point

But the trigger, he says, for getting into the food business and deciding to make idlis was a trip to a restaurant in Chennai, when he had to fork out ₹77 for a plate of idli. He thought that was exorbitant and without any reason. He realised that a large part of the cost was the real estate and salaries for the numerous waiters hanging around, all of which were getting billed into his idli.

So, even as his mind was made that he would get into the food space, he was sure that he would not set up a restaurant, but would have a central kitchen and thus substantially minimise the real estate cost. This obviously meant that the food could be enjoyed even if it was not hot. His mind went back in time, to the train journeys that his mother and grandmother would go on, when they would pack food that would last the entire journey. And, one of the items was the idli, which would be made fresh, soaked inmilagai podi (chilli powder) mixed in gingelly oil. The longer it soaked, the tastier it would be. Bingo, he had the dish that he would make in his central kitchen and sell. And, thus was born his venture Idli Factory, which he started with friend Rajan.

Various combinations

The two partners tried various combinations of rice and urad dhal, till they were convinced that they had got it absolutely right. Both were keen that they make something that was world class. But, then Srinivas felt that the “idli market needed some shaking up.”

They thought the easiest thing would be to change the shape of the idli. Only later did they realise that this was easier said than done. Moulds to make idlis were available only in the circular shape. For good reason, they realised. “Getting the right sort of mould was a nightmare. It is only then we realised the wisdom of the current shape, because you are able to scoop it. After a lot of effort, we worked on a mould that allowed us to get consistently shaped products,” says Srinivas.

Srinivas and Rajan persisted and then came up with a rectangular shaped idli, coated with milagai podi(chilli powder) mixed in gingelly oil. What did they call it? Madras Bars. Then there were the small, circular mini idlis coated in curry leaf powder and garlic, branded Madras Roundtana. Srinivas credits the Chennai-based Firebrand Labs, which he says is “our marketing arm for the branding and packaging.

“They have been pretty much joined with us at the hip right from the beginning.” It was in April that Idli Factory took off. The products are available only in Chennai through select retailers. They sell up to 200 boxes a day and can make around 1,000 boxes a day if there is demand. Srinivas would like to get into other similar traditional foodstuffs that are popular in different regions.

Challenges

But he is aware of the challenges. Distribution and shelf-life are a challenge. The idlis do not have any preservatives and though they can last for a couple of days, retailers prefer to return unsold boxes the next day. “Is there some way where I can work on the packaging to improve shelf-life without adding anything, without altering the composition of the products,” wonders Srinivas.

How does he reach out to more retailers in the city, especially when he offers an attractive 20 per cent margin? Is there somebody else in a similar business? Can he pool logistics resources with them, he asks, listing out the challenges.

Spreading beyond Chennai would mean that he should either set up central kitchens in different cities or adopt the franchise model. “Is franchise the right route? I don’t know,” confesses Srinivas. “We seem to have made a mark by being paranoid about quality. Can I expect the same sort of thing? Do I know how to drive quality in a remote location in manufacturing? All our lives, we have driven quality in remote locations. But this is a new game for us,” he says, adding that both Rajan and he are in the process of learning and growing their business.

source: http://www.thehindubusinessline.com / Business Line / Home> Features / by N. Ramakrishnan / November 03rd, 2014