We have seen an absurd increase in the food delivery business in the last six months. With people sitting at home, ordering food at home has become a trend, pushing even the top industry leaders venturing into the delivery, dark-kitchen business. Brand like Lite Bite Foods, Speciality Restaurants, Bercos etc have already joined the cloud-kitchen race competing with the likes of Freshmenu, Rebel Foods and the likes.
What was appealing?
“In 2014 when we started the business, there were lots of on-demand apps that were coming across the world. Also, in India everybody had a smart phone. So, there was a clear idea that everyone can order from their phone. Similarly, on the QSR side we have seen that lots of brands in India have tried to become the Domino’s, McDonald’s and Yum! Brands of the world but high street rentals, labour cost which only keeps growing etc were some of the hurdles and the physical model have seen all ups and downs. So, we were working on a model wherein you get money from the customer but do not incur the rental cost. And, we were trying to avoid the rentals. Cloud-kitchen was not even the word then when we started Freshmenu,” shared Rashmi Daga, Founder, Freshmenu that is the pioneer of dark-kitchen business in India way back in 2014.
Delivering for growth
The food delivery industry has shown stronger signs of recovery. It continues to grow back steadily to pre-COVID levels, with the overall sector clocking ~85%+ of pre-COVID GMV (Gross Merchandise Value), up from ~75%+ last month,” shared a Zomato blog in September.
“The food delivery business has grown in last six months for sure but for us it is recovery rather than growth. The industry has grown from March where we saw the business was shrunk to 10% to 20% of GMV but we have come back on track not just at Zomato but the industry in general,” said Rakesh Ranjan, Chief Sales Officer, Zomato. Not only this, there is high offline to online contribution during evening. “If we say in February the dark kitchen was at 40% of the new supply, today it is at 55%. So, there is a 15% increase but it is largely coming from establishments themselves who is looking at expanding or large establishments who are looking to convert their kitchens in to dark kitchen,” he added.
Bringing experience at home
One of the major issues that delivery joints have been experiencing in the past is about creating restaurant like experience at home. But with everyone venturing into the segment and more and more people preferring to order food at the comfort of home this has even become easier for players during the pandemic.
“One of the challenges that we see in dark-kitchen business verses restaurant is the number of boxes you do in the same time. I am running a dark-kitchen on biryani which is doing extremely well during the pandemic. Pizza, Biryani and dosa are some of the most ordered item while placing an order online through an aggregator or directly from a dark kitchen brand,” added Chef Koushik Shankar.