The pandemic was of course a big shock for most of the people in the business as people had no idea how to manage it. And probably for a lot of restaurateurs, the entire thought of building delivery and cloud kitchens using their existing premises or maybe cutting out or carving out a portion of their business to delivery actually came because of the same.

According to the latest report released by restaurantindia.in and FranGlobal, India’s cloud kitchen market is anticipated to grow with approximately 15.5 percent to 17.5 percent CAGR value during the forecast period 2024-2028.

The online food delivery segment in India operates mainly under two business models: Restaurant food through consumer delivery, in which meals are ordered online through a restaurant website and delivered directly by the restaurant without any intermediaries (e.g., McDonald’s, Domino’s Pizza, Burger King). And another is through a consumer delivery platform where the meals are booked online through a third-party network that handles delivery independently of the restaurant (e.g., Zomato, Swiggy, UberEATS)

Pivoting the Delivery Biz

“We had a slightly different kind of problem. We have a company where we had restaurants and catering as well. And when the pandemic hit, of course, catering was even more affected. So we decided to kind of pivot immediately to delivery,” shared Varun Tuli, MD at Yum Yum Tree Group who created a couple of brands to overcome the challenge. For him, the most affected kitchen departments were the Indian and the bakery. And, since he had his restaurant in the Asian segment, it was easy for him to adapt to the delivery model and that’s when he started delivery through his brand ‘Noshi’.

“Now to summarize, our business has gone up by 230 percent since pre-COVID and our revenue is almost 2.5 times what it was pre-pandemic. So just to give you a perspective, the pandemic actually was an opportunity for us to kind of build an alternate kind of business,” added Tuli as he did brands that were specific to packaging but at the same time they also started delivering from their existing restaurants.

Delivery to Dine-in: Evolution of a Biz

“We started off as a delivery brand first and then we started thinking about the dine-in ecosystem. It was a fairly deliberate attempt because when we started seven years ago we wanted to stay away from the competition of McDonald's and Burger King and wanted to create a delivery-only brand. But it was until the time Zomato and Swiggy jumped into really burning money and changing consumer behavior. And then we really didn't have a very defensible strategy because everybody was delivering. So for us, moving towards a dine-in format was a general evolution,” shared Kabirjeet Singh, Founder of Burger Singh that India’s one of the fastest home-grown burger chains.

So strategically, Burger Singh has 40 or 42 odd restaurants within Delhi NCR, of which 27-28 are storefronts where people can actually come and experience the brand, but the rest are still cloud kitchens.

“We're still very conservative as far as rentals are concerned. So, we'll open a cloud kitchen in an area that has high rentals and for us, the delivery has moved into making sure that everybody has access to Burger Singh,” added Singh.

People Dependency has to be Low

Customer is an important part of any business and in today’s time, every customer is important. And to make this happen, brands are going out of their way to make customers happy and innovate as much as possible.

“When we started in 2015, our focus was very clear that we need to build the building blocks for scale which means the people dependency has to be kept minimal because you cannot build scale, it’s great on excel sheet but it’s not going to get executed. So our approach has only been about processes. So, the skill levels that are required get dramatically low,” added Anurag Mehrotra of Charcoal Eats by adding that when you are building a brand you need to ensure that the predictability and consistency from the customer's point of view are at a higher level. So, that’s what you are able to deliver.

Experience is the Key

Most of the time a restaurant fails because it is unable to create an everlasting experience for a customer. No matter how much money you invest in design, or how perfect is your food and menu, a customer is always looking for an overall experience and not just one factor when he thinks of visiting a restaurant or for that matter in today’s day and age getting the food delivered at the comfort of the home.

“There are different kinds of consumers that we have and they engage with the platform very differently. One key driving factor for any brand is how can you integrate your on-premise experience into your off-premise experience and I think a lot of brands create value through just going off that role where you have markers like the packaging. So, there are customers who see value there, then there are consumers like any of us. The point is not so much that how deeply you discount but how can you provide innovative constructs to the consumers to keep getting them back on your platforms and also to the brand,” pointed Sidharth Bhakoo, VP & National Business Head, Swiggy.

He also added that it’s not so much about giving the percentage of consistency through and through but we can make it more exciting by having different constructs like a flat offer or one plus one offer or a freebie.