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“Cloud kitchens are now a reality, and here to stay”
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Monday, 20 September, 2021, 08 : 00 AM [IST]
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 Cloud kitchens give brands the potential to scale up easily, improve efficiency, maintain the quality of food, save in terms of overheads, enable multiple brands to operate within a centralised system. As an industry, cloud kitchens have been performing well even in the pre-Covid era, while the pandemic has given the concept the much-needed push as it resulted in shut down of brick-and-mortar restaurant brands, and pave way for more cloud kitchen brands, said Ankur Sharma, co-founder and chief business officer, Rebel Foods, in an email interview to Nandita Vijay. Excerpts:
How did the pandemic spur demand for cloud kitchen setups in the country?
The pandemic and the subsequent lockdowns caused a great deal of damage to the businesses in the food and beverage industry, especially brick-and-mortar restaurants. Restrictions implemented to ensure safety meant restaurant brands saw fewer footfalls. Cloud kitchens have disrupted the food industry the same way Netflix did for home entertainment or what Uber did to the traditional taxi industry. Traditionally, the food industry has seen large QSR (quick service restaurants) chains opening huge eating places where customers would come and dine in. For a food business, this model is high on overheads and not profitable, especially in India which has a high rent-to-sales ratio. This is where cloud kitchens disrupt the market of food services. Not only do cloud kitchens enable us to save in terms of overheads, but they also enable multiple brands to operate within a centralised system. As an industry, cloud kitchens have been performing well even in the pre-Covid era, while the pandemic has given the concept the much-needed push. The pandemic also saw a lot of the brick-and-mortar restaurant brands shut down, and pave way for more cloud kitchen brands. With multiple restaurants entering the delivery space, a completely new universe of options opened for the consumers, giving them an all-new experience, at the comfort of their home. Cloud kitchens are now a reality, and here to stay for a variety of reasons.
How many kitchens do you have in India? What kind of food and beverages come out of your cloud kitchen?
Rebel Foods, operates the largest number of Internet restaurants worldwide and on this network, it has built 15+ brands across 10 countries: India, Indonesia, Dubai, the United Kingdom, Singapore, Malaysia, Thailand, Hong Kong, the Philippines and Bangladesh.
The big turning point came in 2013 when we found out that our web and phone delivery business was growing independently of the stores. We decided to lease low-rent spaces for kitchens and transition from being a QSR to a kitchen with only online delivery. The shift changed the entire economics of the business. The rent-to-sales ratio dropped from 15% to 4% in the next 2 years. More importantly, there was no worry about finding great locations & location fatigue which previously hampered our scale-ups. We also realised our ability to build multiple brands from the same kitchen. The first brand launched after Faasos was Behrouz Biryani. Soon, Behrouz Biryani went national and is delivering over 2 lakh biryanis a month, all of this within a year and 18 months into launch, Behrouz had skyrocketed to become a $12 million business. Banking on the success of Behrouz Biryani, we launched a pizza brand called OvenStory Pizza. We now are home to brands such as Faasos, Behrouz Biryani, OvenStory Pizza, Mandarin Oak, The Biryani Life, Firangi Bake, Sweet Truth, The Good Bowl and LunchBox with 350 kitchens in India.
Share more details on the Rebel Launcher Operating System, culinary expertise, technology and supply chain across the 350+ kitchens across India.
Rebel Launcher is the platform to allow big restaurant brands utilise our cloud kitchen network to scale pan-India and even abroad. From finalising a location, infrastructure, getting the kitchens running, seeking legal and compliance, to setting up a supply chain, there are constant challenges to overcome while establishing a restaurant. Not forgetting, the latest challenge Covid-19. The pandemic has heavily impacted dine-in sales and given further impetus to the pre-existing food delivery business. This is where the Rebel Operating System (ROS) comes in.
ROS comprises a full-stack technology from inventory, kitchen management to demand management and fulfilment. It has supply chain capabilities for sourcing, warehousing, and moving input materials safely in any shape and form. It has culinary expertise and capabilities to break down menus into small SOP-driven steps that don’t require additional skills.
These elements are available across all 350+ kitchens across 55+ cities. Brands part of Rebel Launcher can integrate instantly with all distribution channels and have cost efficiency with shared resources. We partner with brands that reflect our promise of placing customers first, extend our expertise and scale them towards becoming a national brand on delivery.
With Natural Ice Cream, Mad Over Donuts (MOD), Anand Sweets, The Brooklyn Creamery, Baskin Robbins India, Slay Coffee, The Belgian Waffle Company, Sodabottleopenerwalla from the Olive Restaurant Group among other brands now operate as a part of the Rebel Launcher program and scaled up easily within the network. There is no need to create additional awareness by building offline stores which is time-consuming and capital-intensive. The Rebel Launcher Operating System enables plug and play while using our world-class kitchen.
Our milestone in 2020, the Wendy’s partnership which will be scaled-up pan-India with an aim to make America’s leading burger brand a household name in India.
What is the timeline on the scale-up for brands such as Wendy's, MOD and Naturals?
With Rebel Launcher, it takes 15 days to on-board brands covering from initial discussions to the date of the first sale from Rebel kitchens. Technology adoption in our kitchen covers software, automation, and robotics that help serve best quality dishes in no time. Rebel Launcher, offers top-of-the-line tech systems, tech-driven kitchen operations, and an integrated order management system along with embedded systems, artificial intelligence (AI) , IoT in collaboration with certain partners. We are also building smart kitchen appliances and machinery, operational in some kitchens like robotics-led smart frier that detects food shape and basis that shape, it automatically adjusts the oil temperature without human intervention. This end-to-end full-stack platform in the food-tech space gives the advantage to integrate solutions innovatively. The growth story of a few marquee brands from Rebel Kitchens are Natural Ice Creams with 23 outlets in September 2020 and currently present in +60 outlets in +10 cities. MOD now operates in 50+ locations in +5 cities in India. Anand Sweets, a powerhouse in Bengaluru, has moved to Mumbai with us. We have scaled up Wendy’s in 50+ locations in the last four months and will reach 100 locations by 2021 end. With ROS, we scale up and expand globally, in a short span which is impossible for brick and mortar restaurants.
What is your strategy to scout for partners and which cities are you looking to expand?
We mainly look to partner with local or national brands that are keen to scale up or for international brands to make inroads into India. Our partnering brands need to be customer focussed, ensure adherence to our high quality and safety standards.
We have opened kitchens in 15 cities across India in 2021 and the international expansion is underway. During the lockdown, several customers returned to their hometowns which helped our expansion plans. We are now present in Amritsar, Jalandhar, Rohtak, Guntur, Trichy, Mangalore, Ranchi, Agra, Madurai, Kanpur, Dehradun.
Which of your kitchens have given you the maximum sales? How easy is it to get the right manpower?
In India many of our kitchens are best performers in terms of orders and sales. The pandemic also pushed people to move back to their homes in tier 1 and tier 2 cities where we witnessed rising demand.
We are fortunate to find the right talent and have built an organisation with people who have envisioned the future of the food tech space. We are also always looking for talent keen to grow in this exciting food-tech industry.
Where does India stand in cloud kitchens globally and what are the aspects we need to strengthen?
India has a huge potential to develop and create brands that are based on the cloud kitchen model. The cost to operate dine-ins is extremely high and isn’t always profitable. Cloud kitchens give brands the potential to scale up easily, improve efficiency, and maintain the quality of food.
We are strengthening use of Artificial Intelligence (AI) across the food industry. For instance, voice-command features to order food are expected to hit the scene soon. AI’s intuitive nature enables multiple ways to recommend customers as per their tastes and preferences of dishes during online orders.
Going forward, what are the growth prospects you see?
We will continue to expand in newer markets in India and globally. With Rebel Launcher, we are focussed on finding partner brands that align with us on our ethos. We will on-board brands not just with the ambition to scale up, but solve customer needs. We have created conversations with the biggest brands to the smallest local brands in India and internationally. In the coming months, we will on-board some leading brands which will include regional favourites. We believe 2021 will help us enhance our offering to and scale -up variety of brands on the Rebel Operating System.
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