Capturing the home dining trend: what works in a dark kitchen biz

With more and more people wanting to open a dark kitchen or a delivery concept, it has become the new go-to model for everyone. And, there’s no denying that dark-kitchen is a food service business but it cannot be a consumer interface business. It can be viable or profitable for the operator if he works on the efficiency of a factory operations- well controlled environment, there is a production cost which is very efficient, and there is shift kind of work culture, no downtime. If you think a dark kitchen business at scale, it can be thought of a FMCG company that knows it clients, USP and area of investment very well.

Who’s the eater of the future?

According to a report by BCG, “Overall online spending in India is rising rapidly and expected to grow at 25% over the next 5 years to reach over $130 Bn. Riding on the wave of rapid digitization and steadily growing consumption, the reach of Food Tech companies has grown six times over the last couple of years and will continue to increase further.”

“The eater of the future remains same as today; it’s just that the frequency of ordering goes up. So, we might see in 2-3 years that customers who are ordering once or twice a week will order once or twice a day. So, that in it will make a 7x growth in their ordering pattern,” said Tushar Anand, Co-Founder, Chefered Foods who believed that in years to come kitchen will slowly become obsolete in a lot of metro cities as people will find it more convenient to order food online.  

The convenience factor in the business has upped so much that food comes with a click of a button, it comes in 20 minutes. It’s not the usual fare that we had 5-6 years back where people use to wait for their food when ordered online for at least an hour or so and there were only a small number of players offering delivery at home.

Know your market well

Most of the restaurant fails because they themselves are not sure about the market, their product etc. One has to be very confident with his product if launching it in a city/area.

“We have to understand our catchment very well and closely. Eater of the future might change in tier-I cities, metro city. There is a huge shift happening in tier-2 cities also. But we have to understand our catchment, market very well and we have to invest in understanding what the customer need is. So, it is very important to listen to the customer and then define your product rather than taking a product into the market and waiting for the customer to accept it,” pointed Vineet Manocha, VP- Culinary at Lite Bite Foods that owns some of the top restaurants in India and has entered into the cloud-kitchen space during the pandemic.

Getting the right investment done

Every restaurateur or entrepreneur dream of getting the best investors and funds on boards but it is also important to know what sort of investment you need? What is your USP that will make an investor invest in your brand and also why he should pick you over the other brand? So, if you have all this answer you can reach out to the right set of investors and expand the brand further.

“As investors we are looking at two things in a brand- do you know who your customer is because you are not just competing with the pizza guy but also with everyone who is offering the food in the same price range. Secondly, the USP and why you are doing this and what makes you different, uniqueness in the space- be it a cuisine, target customer or even the price point,” added Nandini Mansinghka, Promoter, Mumbai Angels Network.