It used to be a widely believed notion that for a brand to have national appeal and outreach, it needed to rely heavily on traditional strategies and physical structures more than anything. But the truth is that physical markets typically account for the highest expenditure shares towards rental and business expenses and pose different challenges in expansion processes.
When the COVID-19 pandemic started, many restaurants had to close because they could not pay the rental and administrative fees. And that is where cloud kitchens became the game-changers. Cloud kitchens are a reality today and will continue to exist for various profitable reasons such as accessible scaling capacity and low operating costs. The cloud cooking industry had also performed well in the pre-COVID era; the pandemic gave this idea the boost it needed.
What are cloud kitchens?
A cloud kitchen is a commercial facility explicitly designed for the preparation of takeout meals. Cloud kitchens are sometimes also referred to as virtual kitchens, ghost kitchens, or shared kitchens.
A cloud kitchen is a concept of a delivery-only restaurant with no physical space, no dine-in space, or takeaway counter.
A cloud kitchen is a restaurant kitchen that only accepts takeout orders. There are no traditional restaurants or dining-in facilities, but only a functional kitchen that serves as a unit of culinary production. It’s called cloud kitchen because customers can order online through the online food aggregator app or the restaurant app.
Rebel Foods – The precursor of new era food tech in India
Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Rebel Foods is a physical restaurant chain with an online ordering service. It launched the first cloud kitchens in 2015 and became a pure cloud kitchen company in 2016.
In 2018, the company launched the Rebel Launcher programme to outsource its cloud cooking platform to other restaurant chains. Its service regions include India, Indonesia, United Arab Emirates, UK, Singapore, Malaysia and Bangladesh.
Starting with Faasos, Rebel Foods has grown into a multi-brand food company well-positioned to help other brands expand their digital presence. It is the largest cloud restaurant chain in India. As of July 2021, the company operated over 320 cloud kitchens in India. It has opened kitchens in 15 tier-II cities in India and is also expanding internationally.
Investors in the company include Sequoia Capital, Coatue Management, Goldman Sachs, Gojek, and Travis Kalanick. Following the 2020 Series E funding round, the company is valued at $820 million.
Rebel Foods is the leader in the segment
Based on its “customer first” philosophy, Rebel Foods has become the world’s largest online restaurant chain operating in the cloud kitchen segment. The food company’s business model aims to expand and grow brands significantly. It has built a wide range of brands by understanding the market gaps for customer needs.
From the final decision on location, infrastructure, kitchen commissioning, the promulgation of legal regulations, and compliance with the creation of the supply chain, there are many challenges in the planning and opening of a restaurant. This is where Rebel Foods steps in, and assists brands identify their value and grow business.
How is the large umbrella company model helping Rebel Foods?
Rebel Foods’ brands include Faasos, Behrouz Biryani, Oven Story, Mandarin Oak, Lunch Box, The Good Bowl, Sweet Truth, Firangi Bake, The 500 Calorie Project, Navarasam, and Slay. In 2020, Rebel Foods launched EatSure, an integrated food supply for its brand and restaurant chain. It also started operating a food cart called the EatSure Express.
In December 2020, Rebel Foods entered into a partnership with the American fast-food chain Wendy’s, under which it will start and operate 250 cloud kitchens for the brand in India. The company’s revenue in the fiscal year 2020 increased by Rs. 561 crore ($79 million). It currently has 6,000 employees.
The brand of Behrouz Biryani
The Behrouz Biryani brand by Rebel Foods became an almost instant success, creating a market based on trust and love for food. Behrouz Biryani exceeded its parent company’s expectations and helped them see customer service potential across all industries.
The relationship between Biryani and Bengal is unique in history. In May 1856, Awadh’s Nawab Wajid Ali Shah came to Calcutta (present-day Kolkata). The British had seized his lands and treasures and banished him from his fortune in Lucknow. On the outskirts of Calcutta, the Nawab reconstructed a replica of his precious former capital, including grand Islamic buildings, a beautiful parikhana of damsels, a zoo breeding exotic animals and, quite naturally, foods from the royal kitchen.
Since the royal family did not have much wealth, Nawab’s culinary craftsman found a clever way to compensate for the lack of expensive meat. They added potatoes and eggs to the royal feast and, thus, Kolkata Biryani was born. Perhaps the success of Behrouz Biryani only supports this Bengali connection with founders Jaydeep Barman and Kallol Banerjee Bengali heritage.
Food tech industry insights
Several reports indicate that the concept of cloud kitchens is making headway in the food and hospitality market with the highest annual growth rate and is considered the most innovative way to manage recreational activities and restaurant businesses.
According to RedSeer Management Consulting, the cloud kitchen industry in India is estimated to reach $2 billion by 2024, with an average annual growth rate of about 39%. That is more than the $400 million valuation in 2019.
Compared to traditional restaurants, cloud kitchens are tailored to the needs of long-distance social customers. It can help entrepreneurs save on expenses, such as rent and wages for the waiting staff, as it is not required.
What can others learn?
The pandemic has shifted more focus to food safety and cooking processes. Upcoming food business operators must ensure this safety and stay true to high-quality, safe, easily accessible and affordable food sources for gaining customers. Adhering to health and well-being while preparing food will help many small businesses and start-ups achieve significant growth while serving many customers.
In addition to food safety, companies must use the latest technologies in the food industry, such as artificial intelligence (AI). Using an easy-to-use app program interface, voice commands to order food, and other easy-to-use technologies will benefit long-term entrepreneurs. The simplicity of apps in the cloud kitchen segment allows start-ups to harness the power of artificial intelligence in various ways. AI can recommend customers as per their tastes and likes on numerous dishes while ordering, thus helping businesses grow and chart future policies successfully.