Food News

Recipe for growth – Brand Wagon News

It wouldn’t be incorrect to argue that in the post-pandemic world, cloud kitchens have lost a bit of their sheen due to the combination of high platform commission and consumers’ growing inclination towards offline dining. That’s one reason these players have focused on strengthening their offline play over the past year or so. Binny Bansal’s Three State Ventures-backed Curefoods, for example, plans to open 50 restaurants this year and take the number of offline outlets to 115. At the moment it is present in 20-plus cities, with 260 cloud kitchens across the north, west , and south of India. Going deeper into the markets of the south and breaking into the markets of the east, adding 5-7 cities to its expansion map is its biggest task at hand.

This is not a business with a low-entry barrier so rapid expansion is easier said than done. Says Ankit Nagori, founder, Curefoods, “As a lot of customers have gone back to eating offline, the growth in cloud kitchens as a long-tail category has gone away. Brands that have an offline presence and have offline ways to reach the customer will survive. It being a capital-intensive business, one needs to be present in a certain number of locations, and to be profitable, one must have multiple brands, besides technology muscle.”

Last year, Curefoods had raised Rs 300 crore ($36.5 million) and had said in a statement that it would use the funds to expand its geographical reach and diversify its brands into offline formats, from its then online-only presence.

Curefoods started its innings with Eatfit and Cakezone in 2020, and now has 20-plus brands in its portfolio including Sharief Bhai (biryani), Nomad Pizza, Frozen Bottle, Olio, Rolls on Wheels, Great Indian Khichdi, Home Plate and Juno’s Pizza. “We plan to open 50 to 100 locations, whether online or offline, over the next five years, to get close to $500 million in revenue by 2030,” he added.

Curefoods reported a more than fourfold increase in operating revenue to Rs 382 crore for FY23 and is aiming for profitability in FY25. “In terms of growth, we will continue to grow in the 70-80% range in FY24 and would like to have a 50% growth over this fiscal in FY25,” Nagori adds.

Niraj Bora, founder, Surmount Business Advisors and co-founder of Cheesiano Group, notes that the growth potential in India for cloud business is huge. Better delivery infrastructure will further improve the economics, and in turn, improve the overall market size. The industry is expected to be worth $2-3 billion by 2025, according to RedSeer Consulting. But rapid expansion is not every brand’s ball game, say experts.

Clearing the hurdles

First, growing competition in the segment demands that Curefoods carve a distinctive niche for itself. Sequoia Capital-backed Rebel Foods, for example, is planning to open 100 food courts in a big offline push. It operates more than 4,000 internet restaurants and 450 cloud kitchens already and has a portfolio of 45-odd brands under its umbrella, serving 10 countries.

By proactively catering to the diverse tastes across different regions, Curefoods can steal a march over competition. Maintaining uniform quality standards across locations will finally separate the men from the boys, say experts. “Stringent quality control measures must be in place to uphold the brand’s reputation, ensuring consistency in the culinary experience for customers across regions,” notes branding expert Vejay Anand, CEO, Ironhill India.

Experts also say that to take advantage of the opportunity it must optimize its delivery logistics, ensure a seamless online ordering experience and leverage data analytics to understand and cater to local preferences. Collaboration with popular delivery platforms and strategic partnerships can further enhance its market reach.

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