Due to increase trust in the quality & freshness of food vs ‘Delivery Only’ Food apps, cloud kitchen has grown in last two years. The business model gives flexibility to keep experimenting with the menu and hence we have seen many local as well as brands like Swiggy, Zomato, Rebel Foods capturing the segment. The model also gives an ability to create multiple private brands at a lower marketing cost & higher operating leverage per brand.
Supply Chain/ Inventory Module is Extremely Important: “I think the top two things that any dark kitchen business need to look upon is how would they manage their supply chain and inventory,” shared Sahil Jain, Co-Founder, Dineout. Dark Kitchens are all about efficiency, high profitability, high ebitda. So, how can you minimize your prifilage etc from day one because it is a culture that you are setting in your business. So, how can one understand that data very well in terms of what are you supplying in terms of raw materials, what is the output of that and where are you optimizing the same in terms of cost.
Understanding your Customer: Understanding what are the dishes working for you and what are the dishes that aren’t working for you. It’s more important than not really interacting to customer face to face. You need to identify what are the items customers are loving, what are the repeat orders, where is it that you can optimize further in order to do the combos, looking at data and up-selling. So, the entire dark kitchen business is about optimization.
It’s All About Consistency: Primarily when you talk about any business, the key is about food and quality. But in online delivery what happens is that you are only putting orders in place and that has to be very clear. The image you are putting, description you are putting etc. These are the key things when you setup your delivery business. “For us our customer would get same kind of food at the restaurant and while he places the order online,” said Biju Thomas, CEO, Adigas.
Packaging is the King: Online business is all about right packaging. When you accept the product on time, it is made on time, packed on time, the freshness is maintained. “You would be amaze to know that today dosa is my fastest/ most selling item on the menu. And, it reaches customers with the same crispiness as we make it in our restaurant all because of the packaging we do,” added Thomas.
Efficiency of the Partner: If your partnering with a third party, you need to decide what are the solutions available in the market. Riding with delivery partners is a great choice however, if you want to do on your part you need to be very clear in the scale. “For a customer one can’t have 10-12 app at one point. All brands have to embrace the fact that they need to have 3rd party aggregator for efficient delivery,” pointed Dharmendra Singh, Director – Sales and Operations, Chai Point.
Partnering with third party/existing brand: “It is always helpful to partner with established players because they can reach to places where you may not reach. However, from the data shared by our third party it is very easy to build the model by analyzing what works and how,” shared Prianca Pereira, National Supply Manager (F&B), OYO.
Thus, we can say that cutting-edge technologies, innovative food concepts and a dynamic delivery system are pivotal to dark kitchens to enable them to live up to the expectations of their demanding audience. Dark kitchens economics work out in partnerships with third party delivery apps –which therefore represent an emerging market.