Cloud-kitchen business or dark-kitchen business has not grown by itself. It goes beyond the lines on how customers’ are evolving and their consumption pattern is changing. And, how do you imagine the next session of the food business. Sagar Kochhar, CMO, Rebel Foods that owns some of the most recalled brands like Faasos and Behrouz Biryani in the segment talks about building a dark kitchen business whose revenue increased to 108% to Rs 310 crore in FY19. Excerpts from his speech:
Imagining the Future: There’s no denying that businesses are built on a thorough innovation. All top brands of the world understood well in advance that where is the customer headed. They understood the value of time value and convenience and that’s how they brought in the disruption in their own space. Now, when it comes to food the largest sale that you would think of will be McDonald’s of the world. That’s how few years back we thought that we need to imagine this vary part of the business. The customer’s lifestyle was undergoing a change, their consumption pattern were changing that’s what we imagined at Rebel foods. Like any other restaurant business we started 8 years back by coming up with an Indian side of the menu by doing Wraps and Rolls throughout the country. We will not build a 2000 sqft restaurant very heavy on capex, higher payback period and high rentals. We rented 200-300sqft area across the country. After, few years doing 40-50 stores we realised that being across space doesn’t make you to the food space. That’s how when we looked back seeing how consumer needs are doing a change. We looked at few data points and almost above 67 per cent of business was happening through delivery, 73 per cent of our customers have not even seen the store frontal yet they were ordering from our brand. That’s where we thought that if consumers are consuming us in this format why do we just constraint with the fact that we had to do the physical store. That’s when we started doing the dark kitchen model and in just one and half years we were at 150 locations setting 150 kitchens and that’s when we stumbled upon the big realization, going back to the same that we want to be the largest in the food space. So, to be the largest in food space you do not need just the footprints but you need to have an answer to every other craving that the customer has. You have to be present on each of those occasions when the consumer wants to order some food. We wanted to be the largest by creating unique memorable delightful experiences for every other occasion in the life of a user and with that as the core of it, as a mission statement came our next turning point.
Cuisine and Brand is Co-Related: If we as an organization wanted to cater to every other need in the life of a user let’s try and understand from their lens. How would a user consume food- on a regular day verses some special days? People move during these occasions. The fact that when it comes to food it always start with cuisine first. And, when you start thinking of the cuisine then you think of the very place i.e the brand. Basically, the category and the brand have a very special co-relation. Every time you order for your favourite cuisine you think what new can I try. Brand loyalty exists but people are bound to try new recipes.
Growth of Multi-brand: When we look at single serve brands we have Faasos, Lunch Box, for regular meals. For special occasions we have brands like Mandarin Oak serving speciality Chinese, Behrouz serving royal biryani and Oven Story Pizza serving the best pizzas. And, the motto still remain how do we create unique, memorable experiences.
Build a Brand and not just Labels: As a brand you need to have co-relation of what does a brand stand for? You need to have a brand story that consumer would recall every time they order food from you.
Hence, we can say that cloud-kitchen as a model is built on the fact that he has a recall value. With no capital risk, quick payback period of less than 12 months, 3-5% rent to sales ratio, it surely is an infinite game of relentless execution.