your password has been reset successfully, Please login again.

How Food-Tech Companies are Adopting Cost-effective Business Models

The food-tech companies have recently found cloud kitchen as one of the mediums to gain traction of the Indian consumers and offer lip-smacking food at customers’ doorstep.
BY Jaspreet Kaur
Feature Writer, BusinessEx
Aug 01,2019

In recent times, the Indian food-tech industry has evolved immensely and engineered new ways to make profits. Prominent companies viz. Swiggy, Zomato, and Uber Eats have built up new business models, which enable them to serve better, besides merely focusing on the food delivery business. According to Statistas report, revenue in the online food delivery segment amounts to US$107,438 million in 2019.

By shifting the focus from the core food delivery business, food tech companies are working on slashing costs and serving good quality food. In that quest, the companies have found cloud kitchen as one of the mediums to gain traction of the Indian consumers and offer lip-smacking food at customers doorstep.

Cloud Kitchen is the New Business

A cloud kitchen is the latest modification of low-budget restaurants, who could not offer seating space to the customers. Under this model, an outlet prepares food as per the customers demand and then, delivers food at the customers chosen space. The outlet fundamentally works a unit where food is retained, cooked and packed. This kind of model is quite effective as it brings a restaurateurs focus on creating quality food instead of concentrating on dining facilities and space available for customers.

This concept is new in the Indian industry while in foreign countries, giant food-tech firms are employing it massively and expanding their footprint in the cloud kitchen niche. NOSH, Sweetgreen, and Keatz are some of the cloud kitchen brands running in foreign nations.

Successful Cloud Kitchens in Indian Territory

Witnessing the cost-effectiveness of cloud kitchens, many food tech companies have forayed in this niche. Behrouz Biryani, which is operated by Rebel Foods, offers food to the customers via cloud kitchens across India. The company presently owns over 200 cloud kitchens throughout the country, as reported by the daily news, Bloomberg.

Rebel Foods offers a wide range of food, ranging from biryani to Chinese cuisine to dosas. Earlier in July, the company received $125 million funding from Goldman Sachs, Coatue Management, Gojek, and other investors, according to the cited report.

Rebel Foods, which currently operates Behrouz Biryani, used to run a restaurant chain named, Faasos. However, the restaurant business closed down due to high rental expenses three years ago. Seeing the cloud kitchen as a cost-saving model, the company initiated its business from enclosed kitchens.

Besides Rebel Foods, there are several other food tech companies that are enhancing its business via the cloud kitchen concept. In 2017, food-delivery giant, Swiggy established its cloud kitchens under the name, Swiggy Access.

Initially, Swiggy established its primary Access Kitchen by collaborating with two restaurant partners and a few other FB (food and restaurant) brands viz. House of Dabbas, The Bowl Company and Punjabi Rasoi and worked collectively in 3,200 sq. feet. Further, the company housed more than 30 brands, encompassing Krispy Kreme, Truffles and Paradise Biryani, as reported by the Indian daily news, Mint.

Apart from the cloud kitchen, there is another concept that is relevant at the present time i.e. virtual restaurant. In the previous year, Uber Eats initiated a virtual restaurant in collaboration with CCD, named Home Cravings. The food-tech company has been administering virtual restaurants in other countries as well; the company did not launch its virtual restaurant in India until 2018.

Since competition has become stiff in the food tech industry, cloud kitchen and virtual restaurants have become the newest segments for the food tech business to enter in.




Please add your Comment
SIMILAR Articles
August 16, 2019
With Series D Equity financing round, the valuation of ShareChat has incremented to $650 million. ...More
By Jaspreet Kaur
August 14, 2019
By making a transaction with Amazon, the Indian retailer plans to increase its valuation by INR 20 b ...More
By Jaspreet Kaur
August 08, 2019
The hyperloop company, Virgin Hyperloop One, and DP World will be developing the line in India. ...More
By Jaspreet Kaur
August 08, 2019
By discarding “special status” provision to J&K state, the economy in the province will boom and in ...More
By Jaspreet Kaur
August 05, 2019
For developing a connection, an employer needs to convey the ‘human consequences’ of a work to the e ...More
By Jaspreet Kaur
August 03, 2019
Apart from RBI’s non-permittance to source data outside India, WhatsApp Pay had a fallback because o ...More
By Jaspreet Kaur
August 02, 2019
The leading food-tech company, Swiggy is trying to close a $700-$750 million round syndicated by Sou ...More
By Jaspreet Kaur
July 31, 2019
According to media reports, CCD’s founder had leapt into Nethravati River, Mangaluru and after 36 ho ...More
By Jaspreet Kaur
July 30, 2019
The edtech company has raised its bars anew by closing its $150 million round of funding and in turn ...More
By Jaspreet Kaur
July 29, 2019
Amongst all, performance appraisal is one of the most crucial elements to motivate the workforce. ...More
By Jaspreet Kaur
July 29, 2019
In the last six-years, Bansal has made several investments – equity investments, debt investments an ...More
By Jaspreet Kaur
July 23, 2019
Since small and medium-sized enterprises contribute a significant number in the economy, it is vital ...More
By Jaspreet Kaur