Rebel Foods, India’s largest cloud kitchen chain, which operates Faasos, Oven Story, Firangi Bake, and Behrouz, is planning to use its kitchen infrastructure to expand beyond its own cooked meal brands, a top executive told ET.
This will be done by diversifying into ready-to-cook kits, meats, packaged snacks, as well as scaling other restaurants by investing in 12 brands this year, Jaydeep Barman, CEO of Rebel Foods, said in an exclusive interaction with ET.
The food company speculated to be valued at about $1 billion, said growth in India is increasing by 10% every week, but it is still slow compared to international markets and may take five months at least to reach numbers seen before the Covid-19 outbreak.
“(In India) I think there’ll be a natural tendency towards more at-home cooking and consumption…We are creating an umbrella under a program called Eat.Sure and giving this platform for other food entrepreneurs to come on board and build brands around ready-to-cook, ready-to-eat, ready-to-use, and so on,” Barman told ET.
The idea is to extend cases beyond restaurants and create products for customers for use in homes. “ We will be onboarding brands which adhere to the overall principle of great ingredients, no adulteration, no preservatives, no added color, …follows hygiene protocol and so on,” he said.
Globally, demand for food delivery apps have spiked since dine-in is no longer an option.
However, in India, people have started cooking at home fearing they would be infected if they go out, Barman said. Since this trend is likely to last, expansion to adjacent complementary categories was the need of the hour, he added.
The move will give Rebel Foods an opportunity to leverage its existing kitchen infrastructure across 35 cities to add new use cases for consumers at a time when food delivery volumes at dominant players Swiggy and Zomato are down by at least 70% and only marginally increasing over weeks.
It also comes at a time when both platforms have significantly downsized their cloud kitchen infrastructure citing poor utilization of properties. “In times of crisis, people gravitate towards their core competence…which for many of these guys (Swiggy and Zomato) has been logistics, marketplace models, delivery,” Barman said. “We run a much tighter, more efficient ship.”
According to him, even when Rebel Foods’ revenues were down by 50%, the company did not face challenges to its survival.
In April, Rebel raised an additional $50 million from existing investor, US-based hedge fund Coatue Management. This came in months after the Mumbai based firm closed a $125 million round from Coatue along with the participation from the investment arms of ride-hailing major GoJek and Goldman Sachs.
International expansion
The company will, however, continue to launch in new geographies including Saudi Arabia, Brazil, and Thailand by partnering with restaurants that already have a strong connection with consumers but struggle with online ordering, he said.
“We are actually seeing significant partnership opportunities across the world. And these are all sorts of incoming queries to us, like — ‘can you help us, can you help us pivot to a cloud kitchen model where we can have our own brands as well as your brand, using your technology and you know how to scale fast?’.”
“Nothing is concrete yet, but the opportunity has opened up, which was not there before Covid-19,” Barman said.
In UAE, Rebel said its sales are up 25% citing that culturally a lot of UAE expats don’t cook at home. Even in Indonesia, the firm only saw a 15% drop in sales while India was down more than 50%. Just last week, Rebel partnered with Travis Kalanik owned-Cloud Kitchens to launch operations in London.
“Any new market we go to, we try to collaborate like for example in London we’re actually operating out of FoodStart Kitchen…In India we don’t see it happening as much because we are still at that footprint,” he said.
Even as businesses diversify, health, and hygiene will continue to remain the top priority across the food delivery space. “People are more cautious about safety, hygiene, ingredients, the overall quality, than ever. So maybe pre COVID, pricing, discounts, variety used to play a big role. I’m sure some of that will continue. But safety, security would probably be the most important thing,” he said.
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