How India Swiggy’d Its Way Through 2024: A Deep Dive into the Nation’s Eatopia

On the occasion of International Burger Day 2024, Swiggy, India’s pioneering on-demand convenience platform, shared the latest burger ordering trends observed over the past year. 

Swiggy has seen a significant increase in burger orders, with close to 40 million burgers ordered in the last year alone. 

A burger enthusiast from Chandigarh ordered a staggering 1146 burgers on Swiggy, averaging about three burgers every single day! 

Dinner and late-night hours emerged as the most popular times for indulging in burgers, accounting for over 19.5 million orders.

Lunchtime followed with 9.6 million orders, and snack time saw more than 7.4 million orders, proving that burgers are an all-day favorite for Swiggy users.

Bangalore ordered over 6 million burgers becoming the Burger Capital of India! Mumbai with close to 5 million orders and Delhi with over 3.2 million orders were just a little behind in the burger consumption race. 

Fries and Coke were the top choices to accompany burgers, while cheese slice and cheese dip emerged as the most popular toppings.

The Crispy Veg Burger, McAloo Tikki Burger, McVeggie Burger, crispy chicken burger and chicken zinger burger - classic stole the spotlight as Swiggy’s top five beloved burgers over the last year. 

Some customers also got creative with their burger choices. Unique flavors like the detoxifying Signature Quinoa Burger, Beetroot Falafel Burger, Kurkure Chaap Burger, and Rajma Mexicana Burger also gained popularity.

Swiggy is offering exclusive discounts of up to 60% to celebrate the occasion and satiate India's burger craze. 

In 2023, the restaurant and food sector saw big competition among its key players – each fighting to sell their wares to the Indian consumers, who lapped up the dishes with glee. Brands came out with innovative marketing strategies and discounts to woo the consumer. Swiggy, Zomato, and McDonald's attracted people from all over India and each of them sold their best wares in recording-breaking numbers. Whether it was Swiggy's expansive menu, Zomato's biryani love affair, or McDonald's iconic offerings, the competition for the nation's taste buds in 2023 was nothing short of a delectable feast.

Swiggying It!

Swiggy, with its expansive menu boasting an astounding 6,64,46,312 unique dishes, aimed to be the go-to platform for every culinary craving. However, a minor glitch left 5028 users searching for 'Swiggy' and 1682 searching for 'order' in frustration, hinting at the occasional hiccups in the digital feast. Mumbai, the financial hub, stole the limelight as a user splurged an eye-watering Rs42.3 lakh on food, showcasing the city's extravagant taste. Chennai, Delhi, and Hyderabad emerged as the culinary hubs of the nation, each boasting over 10,000 orders, underlining their prowess as foodie capitals. Jhansi, a relatively smaller city, surprised all with a colossal 269-item order, unveiling its penchant for grand celebrations. Festival favorites like GulabJamuns, Masala Dosa, and Idli took center stage, capturing the essence of Indian festivities. Bengaluru earned the moniker of the 'Cake Capital' with a staggering 8.5 million orders for chocolate cakes, while Valentine's Day witnessed a sweet frenzy with 271 cakes ordered per minute nationwide. SwiggyGuiltfree experienced a surge in health-conscious orders, boasting a 146 percent rise in vegan preferences and a noteworthy increase in millet-based dishes.

Zooming Ahead!

Zomato is a seasoned player in the food delivery arena, continued its love affair with Biryani, securing its throne as the most-ordered dish for the eighth consecutive year with an impressive 10.09 crore orders. Mumbai's citizen Hanees claimed the coveted title of the 'Nation's Biggest Foodie’, tallying an impressive 3,580 orders, averaging more than nine orders per day. Bengaluru took the lead in breakfast orders, while Delhi emerged as the city that never sleeps, topping the list for late-night cravings. A jaw-dropping single order worth Rs 46,273 from Bengaluru showcased the city's gastronomic gusto, and residents sent 1,389 gift orders totaling Rs 6.6 lakh, emphasizing the spirit of gifting through Zomato. Humorous calculations added a playful touch to Zomato's narrative, suggesting that the biryani orders could fill eight QutubMinars in Delhi, and the pizzas could cover an area larger than five Eden Garden cricket stadiums in Kolkata. Noodle bowls secured a commendable third place with over 4.55 crore orders, showcasing the enduring popularity of this global comfort dish.

Old McWow!

McDonald's, a stalwart in the fast-food domain, continued to innovate in 2023, with its iconic McAlooTikki Burger retaining its status as an all-time favorite. The McSpicy Chicken burger claimed second place, showcasing the enduring appeal of these classics. In the McCafe segment, Cold Coffee, Chocolate & Strawberry shakes, Iced Coffee, and Cappuccino emerged as top choices, underscoring the brand's success in diversifying its offerings. Soft Serve maintained its reign as the top dessert, while combos and meals gained popularity throughout the year, reflecting a trend towards more fulfilling dining experiences. The Piri-Piri spice mix emerged as a crowd-pleaser, elevating the flavors of fries, nuggets, and burgers.

In this culinary battleground, each brand is trying out newer formulas to carveout its unique identity, offering a smorgasbord of choices that caters to the varied tastes and preferences of the Indian audience. As these culinary giants continue to innovate and adapt to the evolving palates of consumers, the food landscape promises to remain a thrilling and flavorful journey for all.

In the ever-changing online delivery market, giving customers a great experience has become crucial. 

Giving consumers greater financial power is one of the main advantages of offering additional discounts. Offering a little more savings on each order can make a big impact in a world where economic reasons often affect spending decisions. I firmly believe that everyone should have access to high-quality meals, and these extra savings further improve customer interaction, benefiting both the restaurant and the delivery service.

The relationship between a brand and its customers extends beyond the transactional nature of a single purchase. By collaborating with restaurant platforms to offer extra discounts, it also fosters a sense of loyalty among the customer base. This loyalty not only translates into repeat business but also encourages positive word-of-mouth marketing.

Swiggy's Pocket Hero initiative, which provides extra discounts on certain items is an incredible discovery made by the team considering business that hits the mass, hones affordability.

Swiggy's "Pocket Hero" program can be a really good way to connect with restaurants that are looking to gain access to customers who don't want to compromise on their budget while dining. This program goes beyond standard discounts and rewards customers with additional savings based on their order history and preferences. 

Contrary to what many believe, offering extra discounts can actually be a strategic move to boost business growth. In a competitive market flooded with restaurants all competing for customers' attention, such initiatives help set a brand apart as one that values and invests in building relationships with its patrons. The resulting increase in customer retention and acquisition contributes to sustainable business expansion.

While the positive effects of additional discounts are clear, it's crucial to navigate potential challenges. Striking the right balance between profitability and customer perks is key. If restaurants can achieve and manage that equilibrium, I believe they can reap tremendous benefits from programs like Pocket Hero!

By making dining more affordable and building loyalty, these types of initiatives significantly contribute to many eateries' overall success. I commend Swiggy for their innovative Pocket Hero program, which sets a standard for the whole industry. It empowers customers while driving business growth.

In today's fast-paced digital landscape, where first impressions are formed in the blink of an eye, the visual appeal of a restaurant’s menu plays a pivotal role in attracting customers and driving sales. Understanding the power of high-quality food images, Swiggy, India's one of the leading on-demand convenience platform, has introduced an industry-first AI-powered ‘Photoshoot’ feature for its restaurant partners. 

This feature empowers restaurant owners to enhance their menu offerings and entice diners with mouthwatering visuals.

“High-quality food photos are essential for creating a profitable menu. They assist customers in making informed choices and improve their overall ordering experience. Swiggy's 'AI-enabled Photoshoot Feature' simplifies the process, eliminating the need for costly photographers. We hope restaurant partners and owners will take full advantage of this offering,” shared Rohit Kapoor, CEO of Swiggy's Food Marketplace.

The AI Photoshoot feature simplifies the process of capturing and enhancing high-quality images for menu items. Restaurant owners can easily use their smartphones and the Swiggy Owner app to complete this task efficiently. The 'AI-Powered Image Validation' ensures that the images adhere to Swiggy's guidelines, making the process hassle-free and efficient. Additionally, the 'AI Image Enhancement' feature takes food photography to the next level by improving image quality, enhancing aesthetics, and even offering the ability to change backgrounds.

One of the standout benefits is the speed at which these images become available on the Swiggy platform, typically within just a few hours. This quick turnaround can lead to a significant increase in orders, with high-quality menu images shown to potentially boost orders by up to fivefold. Additionally, restaurant owners can enjoy substantial cost savings, as there's no longer a need for expensive professional photoshoots.

In just one month since its launch, approximately 10,000 restaurants across India have enthusiastically adopted this groundbreaking feature. With the capability to effortlessly capture and upload stunning menu images at no additional cost, restaurant partners can now captivate more customers and watch their orders soar.

Founded in 2014, Swiggy is India’s leading on-demand convenience platform with a vision to elevate the quality of life for the urban consumer by offering unparalleled convenience. It connects consumers to over 280,000 restaurant partners in hundreds of cities. 
 

Swiggy, India's leading on-demand convenience platform, aims to enhance the restaurant experience and offerings with the introduction of its 'Menu Score Tool.' 

This powerful, data-driven dashboard empowers restaurant partners with invaluable insights and recommendations for menu optimization. 

“The Swiggy Menu Score Tool showcases our commitment to providing data-driven solutions and actionable insights for our restaurant partners. As the restaurant industry increasingly expands into the online realm, understanding what works in this digital space becomes paramount. Consumer behaviours online can differ significantly from offline experiences. We believe the Menu Score Tool will bring a positive impact on the way restaurants approach menu optimization, enabling them to attract more customers and fostering organic business growth,” shared Swapnil Bajpai, VP, Supply, Swiggy.

In today's competitive restaurant landscape, a well-crafted menu plays a pivotal role in driving success. Swiggy's Menu Score Tool is poised to shape the future of menu design and customer engagement. 

Customer at the Centre

The Menu Score Tool utilizes cutting-edge data analytics to create a user-friendly dashboard that harnesses the power of competition analysis and customer preferences. Covering crucial aspects such as menu categories, dishes, images, add-ons, and combos, this innovative tool equips restaurant partners with actionable recommendations to elevate their menus and drive better conversions.

Helping Restaurant Partners

The Menu Score Tool offers a comprehensive view of menu performance, providing partners with a score on a scale of 100 at both the brand and individual outlet levels. This unique scoring system is a measure of overall menu quality and serves as a benchmark for improvement. Partners gain access to key metrics such as Menu to Cart conversion percentages, enabling them to make informed decisions and drive menu-related enhancements. The tool also provides information on the Menu Scores of nearby restaurants, helping users gauge their competition and identify areas for improvement.

The dashboard presents detailed insights at a granular level, enabling partners to identify top-performing dishes preferred by customers in similar restaurants, pinpoint items lacking images and descriptions, and uncover the most sought-after add-ons and combos.

The Menu Score Tool also empowers restaurant partners with the freedom to access data points at any time, reducing dependence on direct Swiggy point-of-contact. With the tool's self-serve format, partners can take charge of their menu optimization journey and embrace data-driven decisions that translate to increased menu conversions and sustainable growth.

Come Eid, the weekend or just another day, India’s enduring love for Biryani continues to deepen with each passing year. On International Biryani Day celebrated on July 02 every year, Swiggy reveals 76 million Biryani orders were placed in the last 12 months alone.

From the aromatic Lucknowi Biryani to the spicy Hyderabadi Dum Biryani, and from the flavorful Kolkata Biryani to the fragrant Malabar Biryani, people across the country placed 219 orders per minute for their favourite dish.

Swiggy’s order analysis also revealed some interesting biryani ordering trends from the first half of 2023:

In the last five and a half months, there has been a growth of 8.26% in Biryani orders compared to the same period in 2022. While over 2.6 lakh restaurants across the country offer Biryani through Swiggy, more than 28000 thousand restaurants specialise solely in dishing out the Biryani

Regarding cities that truly savour the Biryani experience, Bangalore takes the crown with close to 24000 biryani-serving restaurants, closely followed by Mumbai with over 22,000 and Delhi with over 20,000.

Unsurprisingly, Hyderabad takes the lead in Biryani consumption with a whopping 7.2 million orders till June this year. Bangalore follows almost 5 million orders and Chennai secured the third place with close to 3 million orders.

Dum Biryani has emerged as the undisputed champion with close to 85 variants and over 6.2 million orders. This is followed by Biryani Rice with 3.5 million orders, while Hyderabadi Biryani received over 2.8 million orders. 

A passionate Biryani aficionado from Chennai indulged in a remarkable feast, spending an amount of Rs. 31,532 on a single order of this rice dish.

There has been so much talks and discussions happening over last few days comparing food delivery majors Zomato and Swiggy to ONDC, a government backed network that has been around since September 2022. As per reports, ONDC has surpassed the 10,000 daily order mark and that’s when Netizens have started comparing the food delivery prices offered by ONDC, Swiggy, and Zomato and have found ONDC cheaper.

The Broader Picture

“ONDC seems to be a creative proposal on the part of the government wherein this platform enables us to sell our food straight to consumers. This platform has an edge over Swiggy and Zomato because of the following reasons - The CAC that exists in Zomato and Swiggy may not exist at all on a network like ONDC. Restaurants listed on ONDC will have access to the data of the customers ordering through this platform,” shared Vikrant Batra, Co-Founder, Dhansoo Cafe, Gurugram who is also of the view that a clear and full picture would only happen if the shift happens at a larger national scale.

Though, people might find this website cheaper to order at this juncture but if you really start ordering from it regularly you would notice that they are charging a price that is equivalent or even higher in some cases to that of other food aggregators. As per a brokerage firm Motilal Oswal, the delivery on ONDC apps is only free for the first order. In the case of a discounted /free delivery, this cost has to be borne by the restaurant (possibly to increase competitive advantage against incumbent duopoly) and is not sustainable. Also, after the first free delivery, in some cases, delivery charges are higher than Zomato/Swiggy.

“ONDC does have some shortcomings like the restaurants going on ONDC must have their own runners and delivery boys for this task. Also, ONDC does not provide the benefit of comparative analysis of different food joints to take a quick decision. Also there is no info on details like time of delivery, expected wait time etc. So, even though the costs are lower in ONDC but we will see the full impact only when it is launched in a full-fledged way,” added Batra.

Commenting on the same, Debaditya Chaudhury, MD, Chowman, Oudh 1590 & Chapter 2 mentioned, “I think that this new ONDC initiative by the Government will change the entire ball game. Acting as medium for a direct link between the business and consumers, businessmen like us will be much relieved from the high commissions that were being charged so far. Also I think it will be super convenient for both the restaurant and consumer parties in terms of dealing with any food complaint and delivery issue, since the direct link will manifest a quicker response that were otherwise going through a big loop of intermediary chain.”

Entering the Delivery Game: ONDC vs Swiggy/Zomato

The online food delivery market is valued at 2.9bn USD where Zomato and Swiggy, both acquiring local players as part of their expansion drive. Others in the market include delivery service by international QSR chains ike McDonald’s that also seen a 60% boom in its delivery business in last 2-3 years, followed by KFC, Domino’s, Burger King and cloud-kitchen brands like Rebels Foods and Curefoods amongst others.

But there’s no denying that Zomato and Swiggy enjoy a duopoly when it comes to online food delivery business in India getting your favourite food delivered at the comfort of the home, they are also criticised for the “middleman cut”, which further increases the price.

“ONDC is the way forward and a step towards a non-partial system where the consumer and vendor/restaurant both gets the benefit. It is more about convenience and transparency. Today’s consumer is far more evolved and aware as are the restaurants. Profit margins are not what they used to be pre-pandemic hence the need to work with a more transparent system and rework dynamics with aggregators where commissions take over,” pointed Vishal Anand, Founder, Moonshine Food Ventures, Gurugram that operates SAGA, NUSH MUSH, CAFE STAYWOKE by adding that ONDC is definitely an initiative that will be beneficial for the guest and the restaurant.

Commenting on the same, Pawan Shahri, Co-Founder, Chrome Hospitality said, “India is on the crux of leading the food and beverage landscape. With the introduction of technology, India's F&B industry is expected to grow and an effort like this from the government is always welcomed. A few years ago, we too had piloted a concept to evade the heavy commission fee charged by third party delivery platforms. This is always favorable from a restaurateur's perspective.”

The experts were also of the opinion that this also opens the opportunity for restaurants to control their own discounts and will not be pushed for any platform discounts. This helps restaurants to build a viable connect with the end customer. For third-party vendors too, this will change the game, they will be pushed to rework their commission models and serve better to both restaurants and customers alike.

“This is a great way to introduce some level of standardization in the overall scheme of things. It is very encouraging to see these efforts by the government, this will definitely boost overall scale in the F&B sector,” added Shahri.

Hence, we can say that though it may become beneficial for restaurants that are running self-owned fleet where they too will be able to make a good use of their fleet to serve customers over ONDC platform. But we really need to keep in mind that other aggregators like Swiggy and Zomato have created a duopoly with a huge investment and good marketing strategy. So, it might take some time and strategies for ONDC to really match up to that.

What’s the future of delivery as people are now wanting to go out and experience the dining options?

I think pandemic was of course different timing in the world where delivery just shot up everywhere but apart from that people have developed consuming things at home. I don’t think that’s changing in a hurry. Like if breakfast is assumed to be cooked at home, people may seek convenience and order breakfast at home. Late night, if people are studying or people have vocations they would want to order food at late night. Also even in towns and cities where online was not that prevalent will also see adaption of online delivering much more. I think both delivery and dining trend will grow as there is lots of options to be explored in the country and future for both trends will be very strong.

Which is the best period for Swiggy when it comes to getting the largest orders?

If we talk about food habits- dinner and lunch are the biggest. Let’s say you know a couple who are both working and have a child going to school and everybody has to go out early in the morning. So, breakfast is evolving in the used case.

Zomato has entered the intercity delivery, any such plans for Swiggy? What is your view, how successful can be that model?

I think these are the things where innovations are always welcome and I think anybody innovating within the category is good. So all my good wishes to Zomato to whatever they are trying but I do believe that we don’t have immediate plans on intercity as there is so much choice to offer within the city. Like for example, I live in Gurgaon and it is very hard to imagine that what I’m not getting in Gurgaon that we can get from Delhi but beyond that right now we don’t have plans. I don’t have plans on serving our consumers need in ways and means to shape that they desire the most.

Any plans on entering global market?

Right now, India is a very strong market overall where lot of growth is happening. The market is relatively far more stable. So no immediate plans but India is a land of opportunity for us and we’ll keep seeing us expanding in markets with new geographies, new cities and in new kinds of benefits to our consumers.

Anything you want to say about Indian Restaurant Congress?

It’s a great place to exchange the ideas, thoughts and just meet people after seeing their faces in zoom for such a long period of time. So I look forward to this and wish you all the best.

There is no denying that the third-party online ordering fees have been the bane for many restaurant businesses. In a world where everything is online, fast, and convenient, it looks like a necessary evil to have to use a third-party delivery site to get the food delivered to the masses. 

While the industry was quite numb for the last few years, the pandemic has caused the industry to make some noise against the food aggregators. Calling them digital landlords, owners across the country, they expressed their opinions that due to the aggregators they don’t have their individual space among the masses, and have to heavily rely on them for their own customer loyalty.

Also Read: How Covid-19 pandemic has given a boost to the delivery biz

National Restaurant Association of India (NRAI) in a statement clearly states that "(Aggregators have) distorted a vibrant marketplace by aggressive discounting and predatory pricing.” In the last five years, the commission charged by the aggregators has gone up from 6 to 25 percent. The industry associations are now in talks with the online food delivery platforms to change commission structure, reduce discounts and levy new fees for deliveries.

Chef Harangad Singh, Chef and Founder of Parat who has recently opened his cloud kitchen stated that one needs to create a model in which the business can fit in with both aggregators and self-delivery as both are now equally important to survive.

Currently, Parat’s 50 percent sale is from aggregators and 50 percent are from direct ordering. “The module of the aggregator is not much complicated as it is their responsibility to ensure delivery to the customer and in self-delivery, we have to ensure the whole experience,” he said. 

However, Singh strongly opines that margins in the direct delivery are better as the average order ticket size is good but with an aggregator, one cannot question the minimum guarantee of the size of the order ticket. 

To overcome the delivery cost, the restaurant association last year has nudged restaurants to work in tandem with delivery vendors to utilise their existing fleet. The apex body, during the Covid induced lockdown, had announced its plans for building its own online platform to take on food delivery services like Zomato and Swiggy. The new platform according to the restaurant association will enable online food ordering and delivery services along with loyalty programmes.

Not just getting away through high commissions, but having one’s own delivery fleet shall also ensure product qualities.

“For those who prefer home deliveries, we should have been able to use the services of aggregators who would know how to handle delicate products such as pastries or macarons and deliver them to our customers in a timely manner and in a temperature-controlled container at a cost which would be less or equal to what it would be if L’Opéra operated its own fleet. Unfortunately, this ideal world does not exist,” Kazem Samandari, Executive Chairman, L’Opéra commented. 

According to Samandari, the aggregators do not treat sensitive products with the necessary required care and their commissions are way too high, mainly due to an unquenchable thirst for offering discounts to attract new customers. The result is often a lose-lose situation.

Finding a solution, L’Opéra has adopted a hybrid model whereby the company rely on its own proprietary delivery fleet for all orders placed through the website, which represents the lion’s share of its online business.  

However, the company do not refuse orders placed directly through carefully selected aggregators who fulfil them through their logistical infrastructure. “Though not ideal, this provides a workable solution for as long as we are not able to satisfy the entire demand through our own infrastructure,” Samandari added. 

May Interest: Zomato hikes delivery partners fee to make up with the fuel prices

So should restaurateurs now consider to invest in having an own delivery fleet? Answering the same, Amit Bagga, co-founder of Daryaganj said that it depends on the volume of delivery business that the restaurant has. According to him, if it’s more than 50 percent of their total sales and is a considerable value then it makes sense to have its own fleet.  

However, in a scenario where the delivery sales are less than 20 percent or so, it would not be viable to maintain one’s own fleet as it comes with a high cost. Explaining it further, Bagga stated, “during peak times there are sometimes up to 10 orders at one time and to deliver them on the time you need 10 riders but at all other times, the demand is much lesser so the 10 riders cost will never be viable, also apart from the costs of maintaining your own fleet a lot of bandwidth of the team goes into the logistics operations and maintenance of vehicles etc.”

He recommends that in order to save costs and ease of logistics operation, it is best to opt for aggregators if the core business is not delivery. “But at the same time, the downside is that the aggregators don’t share the valuable customer data with restaurants,” Bagga concluded. 

India picks homestyle and high protein meals to eat healthy this 2021, shared a report by Swiggy’s Health Hub.

According to the report, it showed that 20% more Indians ate healthy in Jan 2021, a trend that is deemed to rise through the year

Millet Khichdi, Multigrain Masala Dosa, Mexican Burrito Bowl, Caesar Salad, Corn Sandwich along with sugarfree ice cream were the most ordered healthy dishes on 1 January 2021, it added.

Also Read: Healthy Snacking is changing the face of snacking in India

Swiggy’s recently launched Health Hub, shows that eating healthy meals is now in vogue in the country especially with new year resolutions.

The Health Hub is planning its expansion beyond 4 cities to Chennai and 10 other cities through the year.

Health Hub, a first-of-its-kind dedicated healthy food discovery destination on the Swiggy app that offers over 90,000 healthy dishes tells an interesting story about how Indians preferred to eat healthy in January 2021.

Curated and verified by certified nutritionists, Health Hub is currently live in Mumbai, Delhi, Hyderabad, and Bangalore with plans to expand to other major cities through the year. Below are some key trends and findings from Swiggy Health Hub.

Make way for high protein and Keto diet: Most health-conscious consumers in the four cities ate high protein meals and Keto emerged as the most popular diet. Swiggy has uniquely positioned the dish selection on Health Hub to suit the special requests for various discovery options such as High Protein, Low Fat, Low Calorie, Fibre Rich, and Keto dishes. Additionally, Swiggy has worked hard with nutritionists and restaurant partners to create healthy items across cuisines which generally aren't associated with healthy eating and are closer to Indian consumers' taste palette truly becoming a one-stop-shop for all those wanting to follow a healthy eating habit.

City with the healthiest orders: India’s IT hub Bangalore was crowned as the city with the maximum orders for healthy food in the country. A look at city-wise preferences for health meals shows that Hyderabad ordered the most Barbeque Grilled Salads, Protein Guacamole Bowls and healthy breakfasts.  Mumbaikars went for Burrito Bowls, Caesar Salads, Homestyle North Indian Khichdis and combos. And healthy eaters in NCR ordered healthy breakfast items such as Poha and Upma; Protein Salads and Bowls for other meals.

Timely and measured meals: Undeterred by the unreasonable demands of work from home, consumers have made it a point to eat healthy and timely meals with orders for lunch peaking at 1 pm and for dinner at 8 pm. The average calorie count per meal was higher for lunch orders at 360 calories with people ordering meals with 335 calories for dinner orders. Consumers also ate more healthy meals on Mondays and Thursdays to beat their work blues at the beginning and the middle of their work week.

May Interest: Swiggy launches Health Hub in Bengaluru, to make healthy eating convenient

The above data is based on lakhs of orders received on Swiggy Health Hub, a unique offering by Swiggy between January 1st to 31st 2021 across Bangalore, Mumbai, Delhi /NCR and Hyderabad.

While major food aggregators like Swiggy, Zomato and Ola Foodpanda have reshaped the dynamics of the restaurant delivery system, newer concepts like cloud kitchens are further revolutionizing the space. According to Redseer Consulting, online orders worth $1.7 were placed in the country in 2018; the market is set to reach $3 billion by 2020.

Anurag Katriar, Executive Director and CEO, DeGustibus Hospitality, says, “There is a visible shift of consumption from dine-in to delivery at work or home. I would like to believe that even the frequency of consumption of non-home food is growing but the average spend is far lesser.” The average spending of the consumers who order food from the cloud kitchen brands hovers between Rs 200-320.

The founders of PopWonMo, another cloud kitchen franchise, Krunal Shah, Imad Patel, Rajat Ryan and Kenneth Dsouza, feel the consumption pattern is “rapidly changing due to the sudden influx of substantial discounts from food aggregators who are constantly competing for acquiring new users.”

Anurag Katriar of Indigo Burger Project, which is the QSR and cloud kitchen arm of DeGustibus Hospitality, says, “I call it the ‘3C effect.’ Consumers have multiple choices, there is the convenience of ordering over Apps and the cost is also good due to deep discounting being offered by aggregators.”

Also Read: The Cost of Building a Restaurant in Metro Cities in India

New Entrants 

Though Zomato entered the industry in 2008, it was with FreshMenu that it first tested and validated the concept in 2014. Later, players like Faasos and Ola Foodpanda joined the bandwagon. Recently, Oyo Rooms has announced its entry into the cloud kitchen domain. The budget hospitality brand is, currently, doing a pilot of its first cloud kitchen under the Adrak brand. The Future Group is also mulling to enter the cloud kitchen business.

Multiple Benefits

Cloud kitchens work on a hub and spoke model and deliver food at the customers’ doorsteps. The cloud kitchens need low capital expenditure as dine-ins are strict no; that's how restaurants can save money on furniture, rent and miscellaneous services. Many small businesses, initially, take up the route of cloud kitchen formats to enter the restaurant industry.

The cloud kitchen franchise model helps lower the rent-to-sales ratio for a brand; the cost of manpower and rentals decreases. In addition, it also reduces the product price for the consumers. Rebel Foods, which operates 160+ cloud kitchens with brands such as Faasos and Behrouz Biryani, delivered kitchen sales growth of more than 75% in FY18 as compared to the industry average of 10-15% SSG.

Business Model 

To open a QSR (quick-service restaurant), the average area required is 450 sq ft for 20-30 sitting, whereas, one can operate from the cloud kitchen with just an area of 150-300 sq ft. A minimum of 25-30 lakhs is required to start a franchise unit of a cloud kitchen. The start-up investment cost includes lease rent, equipment, interiors, licenses and registration, franchise security deposit, franchise fee and operational expenses like the salary of the manpower and rent. 

The rent for 150-300 sq ft area is Rs 45,000-1 lakh. The lease rent costs Rs 6.5 to 7 lakh per annum. The equipment for cloud kitchen comes at between Rs 3.5-4.5 lakh. The cost of the interiors is around Rs 2.5-3 lakh. The licenses and registration and franchise security deposit are Rs 2 lakh each. The franchise fee is over Rs 3 lakh for a cloud kitchen of 150-300 sq ft area and the franchisee royalty is around 12.5 per cent on gross revenue per month.

The manpower to run the store is around Rs 1.10 lakh per month; seven to eight staff for each shift is required. 

For Indigo Burger Project, Anurag tells the margin in cloud kitchen business is around 50% and fixed expenses are around 2.50-2.75 lakhs per month. “So if the store sale is 10 lakh per month, a franchisee can make around Rs 2.25-2.50 lakhs per month - 22% to 25%. Very clearly, it is a top-line driven business.”

The ROI for cloud kitchen businesses can be as low as 12 months, depending on the sale of the products.

Why Franchising?

PopWonMo founders find franchising in the cloud kitchen area to be fruitful because “it helps to spread brand awareness and scale up the business.”

Even if someone is new to the food service segment they need not know the technical know-how with cloud kitchen businesses. All they need to do is gather the products together and get them delivered to the consumers. “Your product will be consistent and all you need to do is to push volumes”, says Anurag. This way the brand can have control over the quality and supply of the product.

The franchisors provide their franchisees with supply-chain support, training, backend support, financial management, book-keeping, food costing, marketing, collaterals and activations and even talent acquisitions. The cloud kitchen franchisees get the support on the POS modules and get the training on monitoring the key profit drivers.

Lesser risk is involved in the cloud kitchen franchise model; it requires low expenditure and is the high-profit-margin business.

Expansion Plans

FreshMenu has set up a network of 39 kitchens in its three markets and is also exploring ‘kitchen-as-a-service’ model with food tech giants Swiggy and Zomato. The start-up, currently, operates in Bengaluru, Mumbai and Delhi. FreshMenu has delayed its expansion plans into Pune, Hyderabad and Chennai which was initiated in 2018.

Indigo Burger Project which has a presence of 16 outlets at present is looking for expansion in the west region of the country as well as in Bengaluru; the aim is to reach to 100-outlet mark. While PopWonMo operates two shadow kitchens - one is located in Bandra west and one in Andheri West in Mumbai. It aims to add five more outlets by January 2020; the targeted areas for expansion are Lower Parel, Worli, Malad, Powai, Navi Mumbai.

India is channelizing more and more of its focus on career. Everyone is precisely focused on shaping their career and have little or no spare time to regularly indulge in three-course homemade and healthy meals. The hiccups of daily cooking get even more challenging for professionals and students, who are moving out of the comforts of their homes and residing in a different state and city. Making lives easier for the busy bees, came in several food tech startups with their apps that respond to your hunger growls, no-cooking and sick days.

The easiest and fastest ways that all the food-tech startups adopted to become household names are through appealing offers, discounts, cash back, flexible payment modes and fastest deliveries. But which are the ones, which have made it big in the food-tech industry? Here is a list of few of the top food tech startups that are taking the Indian market by storm.

Must Read: 6 Reasons Why Restaurateurs Are Annoyed With Food-Tech Companies

Swiggy

Average Rating on App Store: 4.3

One of the most favourite food apps, Swiggy has been an instant favourite. Founded by Nandan Reddy, Rahul Jaimini and Sriharsha Majety, Swiggy is a food ordering and delivery company that caters foodservice solutions for restaurants. The app connects its customers with the several restaurants and food joints and makes it easy to order food with a few clicks. Founded in 2014, the company has already bagged a total of $1.5 billion in massive funding.

In Pics: 7 Women Changing Food Service Scene In India

Zomato

Average Rating on App Store: 4.3

Known for being hyperpure, the Bangalore based startup provides more than doorstep food delivery. The brainchild of Deepinder Goyal and Pankaj Chaddah, Zomato offers its customers a full range of services for the entire food value chain that includes doorstep food delivery, takeaways, restaurant table bookings, etc.

Zomato made headlines last month pertaining to its latest endeavour of implementing drones for its food delivery in hands with Tech Eagle Innovations. It has a much longer presence in the country since its inception in 2008. The food-tech startup has come a long way and has reportedly managed to fetch $653.8 million of funding for the business so far.

Fresh Menu

Average Rating on App Store: 4.2

Founder and currently the CEO Rashmi Daga established Fresh Menu in 2014 and since then it has successfully raised $24.4 million funding through its app.

Following Zomato, it is reported that Fresh Menu might soon follow a ‘farm-to-farm’ model.

Box8

Average Rating on App Store: 4.2

Laying the bricks of foundation in 2012, Anshul Gupta and Amit Raj co-founded the Mumbai headquartered Box8. The food delivery startup has spread its roots to Pune, Gurgaon and Bangalore, and has already risen total funding of $12.1 million.

Faasos

Average Rating on App Store: 4.1

The first brick of foundation of Faasos was laid by Jaydeep Burman and Kallol Banerjee in 2011. Standing in 2019, the online food ordering company has come a long way, managing to raise $103.7 million in funding over eight rounds and is currently available across 15 cities in the country. Latest reports also indicate that the Pune-based food-tech company is eyeing global expansion in 2019. Dubai is one of the countries that are listed on its cards of future expansions, where the online food delivery company will supposedly start three of its kitchens.

This article was originally published on Entrepreneur India.

2018 has been an eventful year, but food dominated the headline throughout. Be it eating out trend or online delivering trend, customers enjoyed the tasty treat everywhere. According to a Zomato release, “In 2018, users ordered 5 times more from their homes than offices. While a user in Jaipur placed an order worth Rs.1,84,760 which was delivered in 415 boxes, another user in Delhi placed 1804 orders over the year.”

With technology shaping up the food sector, cashless payment mode dominated with only 28% of our users choosing to pay via cash. Not only this, India’s love affair with food continued to blossom this year. With record-breaking orders for certain dishes, Indian foodies have declared their very own National Food Days!

“There has been a considerable surge in the number of people ordering in vegetarian food. Compared to last year’s 43 percent, 62 percent of the orders across the country were vegetarian, with Ahmedabad topping the list for most veg dishes,” said the Swiggy report.

Also, to build and create more convenience around food, these platforms are continuously adding features and services to boost the system. Also, while India saw a new rise in the love for the international cuisine, Indian cuisine remains the hot favourite among the diners.

“At UberEats, our aim is to ensure that consumers have access to the cuisines of their choice wherever they may be. We stay committed to onboard unique restaurants on our platform and make greater choices available for consumers, so that they can enjoy their favorite meals delivered right at their doorstep or office desk at the tap of a button,” pointed Deepak Reddy, Head of Central Operations, UberEats India adding that while Indian cuisine still stands as the consumer’s top food preference in the country, there is a huge demand for a larger choice and selection of cuisines.

Cuisines India Loves:

Keeping the focus on consumers, smart curation and personalisation will rule the roost over the next 18 months. The success of a food delivery platform is a function of convenience, reliability and selection. However, as more and more restaurants come onto food delivery platforms, balancing choice with ease of using the app and placing an order can be a challenge. While most food delivery platforms have carousels with collections of restaurants, in the coming years,

customising this function will help in reducing the overall time taken by consumers to make a choice and place an order. Just like when you open up Netflix and get recommendations on movies, getting food recommendations based on past orders and preferences will increase ease of use, shares a FICCI- PwC report release last December.

Digitisation has effected and has plunged through every part of our lives including how, when and where we eat our food.” More than 60% of population in India is below 35 years of age and very tech savvy” says a report from NRAI. It is important to reach out to this young India on platforms where they prefer spending their maximum time and can be engaged with. The trend of going out and eating our foods at a fancy restaurant is long gone. It is time for ‘Netflix and chill’. And to do Netflix and chill, people order food at the comfort of their homes. In times like today, when the youth works all week, their idea for fun is to sit back and relax. Food delivery has thus recently become a huge market in the business sector. An IBEF (Indian Brand Equity Foundation) report says the organised food business in India is worth $ 48 billion, of which food delivery is valued at $15 billion. Investment in food start-ups, which mainly include food ordering apps, has increased by 93 percent to $130.3 million, comprising 17 deals till September 2015, as against only five deals in 2014.

Why is online delivery trending

Many people have started to live their life through their smart phones and so the ability of a restaurant to be present in online environment–through social media, online ordering/payment, and delivery –determines their success. “We give this option because it’s much more convenient for working people and people staying at rental places. We use Zomato and Swiggy as it boosts the revenue of the cafe. The food delivery option is convenient and fast and increases our sales. “says Virat Suneja, co-founder of Hearken.

Rather than going to the grocery store to buy raw materials first and then cook them, customers can push a button and have their meal delivered in around 30 minutes from some of their favourite restaurants. Why would anyone want to change that! With an increasingly fast-paced lifestyle and reliance on digital technology, we're seeing greater demand for simple and easy services that can provide consumers with what they need in an instant.

Growth

Many apps like Zomato and Foodpanda have been developed already and are working day and night and are profiting so as well. One recent addition to it would be Swiggy, growing at 25 percent month-on-month shows how India is moving towards the future of food delivery restaurants.

“We understand ordering in is the most convenient thing to do after a long day. Everyone is so busy, and our sales increase especially on weekends. Zomato and Foodpanda proved to be some good sites. Food delivery has made us a household name in the area. The option definitely adds up to the sales. Also, the feedback option provided by online platforms helps us improve and maintain the standards.” Shares the owner of Men In The Kitchen, Dwarka.

The best thing about food delivery services for the cooperating restaurants is that in addition for the shipment, they do marketing for the restaurant as well. “The delivery process in itself is a means of publicity with the vehicles carrying our brand name, packaging etc.” She adds. Several people might discover the restaurant for the first time through the food delivery services. They might or might not have had knowledge about your restaurant, but when they see you on a trusted app, taking the experimenting spirits of the average millennial today, they are sure to order from you.

Food delivery Pros

Placing orders online or on such apps proves beneficial for everyone. There are special discounts for new customers, or discounts on various restaurants, always going on. A restaurant finder app can easily help you avail such discounts. Brands and outlets have started tying up with food delivery and hyperlocal mobile as getting listed on third party Aggregators has proven very fruitful for them.

Food delivery Cons

There can also be a few obstacles that come in the way of food deliveries. Such startups need tremendous efficiency in order to overcome real world challenges, meet customer expectations and turn profitable, all the while competing with the in-house delivery expenses of restaurants, which is not very large. Also, many restaurants still seem hesitant to get into this market due to their own valid reasons. “I believe in selling experience and not just food. Food delivery kills experience” expresses Udit Khanijow, the owner of famous cafe, Big Yellow Door, which hasn’t started food delivery yet.

“Your restaurant maybe a fine dine restaurant with a wonderful ambience, but food delivery equalises all food joints, be it street food, an international fast food chain or a local dhaba- all are clubbed together. If someone rates the food eaten at the restaurant a 10/10, the same food in delivery will only fetch 8/10 points.” Said The owner of Men In The Kitchen, Dwarka.

Conclusion

A lot has been happening in the online food ordering space where increased competition is making survival tough for various players. Although, a few have emerged glorious the future still lies ahead. Looking at the present scenario it can easily be said that many more such start-ups maybe seen soon in the market even with the cons that come with it.

How was Swiggy born?

The driving principle behind Swiggy is to revolutionize the restaurant-takeaway-delivery business in India. Food delivery in India is fraught with problems both on the consumer as well as the restaurant end. The problems on the consumer end range from reliability and consistency in service, restaurant unavailability and high minimum order values etc. On the restaurant end the overheads pertaining to the maintenance of a fleet of delivery staff, high rentals and marketing costs lend credence to disruption. Since then Swiggy has evolved as a leading marketplace connecting customers to their favourite eateries with the motto of “No customer goes hungry”.

Swiggy is planning to set up kitchens jointly with restaurants for higher revenues. Share about the plan?

Swiggy intends to work with the best restaurants in creating delivery-first restaurants or cloud kitchens. The mechanism is still under discussion but the core idea is to help restaurants with generating demand and managing the logistics for them while the restaurants themselves can focus on the preparation of food. There are multiple means to achieve higher revenues-investing in these kitchens is one of the options.

What are the challenges you are facing in the operation?

Food delivery in India is a pretty nascent industry, having just taken off in the last year. Initial challenges include familiarizing restaurant partners to the business model, gaining customer traction to scaling the delivery fleet with individuals who understand the nuances of food delivery. We have come a long way since then and the traction we are receiving in new markets we are entering stands testimony to the fact that the restaurant delivery business is undergoing a major change.

On what basis do you provide recommended menus to customers?

In addition to personalized menus, users can also sort or filter based on their preferences corresponding to cost, time of delivery, rating, popularity, cuisine etc. We also have a set of recommended dishes from a restaurant along with accompanying photos which assist users in faster checkouts. Overall we are trying to optimize customer experience to enable checkouts within a minute. Besides these data-driven parameters, our visual menus guide customers through what we have picked as the best items from a particular restaurant.

How much competition do you face from Zomato, Tinyowl or Foodpanda?

Swiggy is not just a lead-generation solution but is also focused on solving the key problem of logistics in food delivery. Even the business model is different than the other players in the market. Swiggy’s objective is to integrate with restaurant partners and provide an optimal experience to our customers. Therefore, Swiggy has a no minimum order policy and is currently the only service in the market to offer live tracking of orders.

How has technology played a pivotal role in making ordering seamless on Swiggy platform?

Swiggy is a core-logistics platform and thus, leverages technology heavily in order to provide the best of services to the restaurants as well as customers. Customers currently have an option to place orders through either the website or the mobile apps (iOS or Android). We use other factors such as traffic conditions, historically determine preparation time of restaurants, location of delivery executives to “smartly” determine the delivery time promise to end customer. Customers can even live-track their order from time of confirmation to delivery on a map. Today, our service level agreement compliance is above 80 per cent and growing.

To our restaurant partners, we provide a system which not just relays orders but provides them a snapshot of the financials as well as key operational metrics. Our delivery partners are equipped with state of art mobile technology that selects the best resource to fulfil the order apart from guiding him on the routes. On the back end, our analytics engine periodically mines customer data to understand user preferences, which helps us partner with the right restaurants.

How do you see social media as a marketing medium?

During the recent past, social media has risen to prominence, especially as a vital marketing tool. Since social media is now extremely popular, with huge numbers skimming through content for a large part of a typical day, it is a crucial tool to market through, for the sake of simply reaching a vast audience. Social media also provides clever targeting for increased viewership, helping marketing land much closer to the intended mark.

What is your expansion plans?

We are already present in eight cities– Bengaluru, Hyderabad, Mumbai, Pune, Delhi, Gurgaon, Kolkata and Chennai. Our core objective is to ensure widespread proliferation in all the cities we are currently operational in. Then, we will plan to expand to four to six more cities within the next year. Our goal is to revolutionize the way India eat and in covering all major cities.

Investment thrust in food start-ups has witnessed a rapid growth in the last two years. Over 100 companies got funded from top investors in the country, making 2015 the year of food investments. According to advisory firm Grant Thornton, investment values increased at a compounded annual growth rate (CAGR) of more than 57 per cent between 2011 and 2015 while investment volumes increased at a CAGR of over 62 per cent.

The money guzzlers

Growing with the trend, 2016 saw some more key investment in the sector by top investors investing in food business. And, what could be better than ever ending thrust for best food start-up. The most recent deal in the segment recorded $35 million investment in Swiggy, Bengaluru based food start-up from SAIF Partners, Harmony Partners and Norwest Venture Partners.

Swiggy, a food ordering and delivery platforms in India has grown over 20 times in the last few months. The online food delivery model has seen continuous growth in orders from its inception. And, this has assisted them to expand to other cities.

“After analyzing the consumer landscape in India, it quickly became clear to us that Swiggy is the food delivery company that is best positioned to win given their focus, execution, and long-term vision,” said Michael Chou, Partner at Harmony Partners. “Their growth is very strong, but moreover Swiggy provides a much better experience to customers and restaurants, the two key stakeholders in the ecosystem. We are very excited to partner with them and help broaden their lead.”

And, as the year continues to move with a bang, Ratan Tata invests an undisclosed amount in Tea chain Tea Box.  Teabox is disrupting the $40 billion tea industry with its innovations in technology and the supply chain. The company’s approach marks a clear departure from the norms of the tea industry. By applying innovations in design, supply chain and technology, Teabox is able to offer a significantly better experience to its customers across the world. And, this has led Ratan Tata, former chief of the Tata Group and currently chairman emeritus of group holding company Tata Sons help fuel Teabox’s continued growth as it expands in other major markets around the world.

“Ratan Tata needs no introduction for the kind of strategic direction and commitment he brings to the table. We have grown up admiring and respecting his vision and business acumen on scaling the Tata group to a global level. His direct guidance and experience in the tea industry will surely help us grow Teabox to be the first global premium tea brand from India,” said Kaushal Dugar, Founder and CEO, Teabox.

Healthy is ‘Trendy’

In a sector that has seen significant shake out in 2015, Freshmenu’s product market fit, stellar growth and margin profile made the Company break-out from the pack. And, its fresh meals prepared at its kitchen, has raised $17 million in Series B funding led by Zodius Technology Fund.

The transaction was initiated by Signal Hill India, with participation from existing investor Lightspeed Venture Partners.

Boozing calculations

When we talk about food, the drink has to come by itself.  B9 Beverages, a Delhi-based craft beer company, raised a $6 Mn round led by Sequoia with participation from a select set of super angels including Kunal Bahl and Rohit Bansal from Snapdeal, Deepinder Goyal from Zomato, Ashish Dhawan of ChrysCapital, and Mayank Singhal from Temasek.

This is a first for a blue chip venture capital firm to invest in an alcoholic beverage brand in India. Traditionally, stringent government regulations and political intrusions have kept investors away from this sector in India. However, this home-grown beer brand has managed to be an exception and attract the attention of the Silicon Valley based VC firm as well as other tech entrepreneurs and investors.

Thus, we can see that it’s just the begin of 2016 and food start-ups have disrupted the Indian investment ecosystem. And, with innovative trends on its way, there is exciting opportunity both for shareholders and investors.

At a time when lot of  food-tech startups are shutting their operations, Bengaluru-based start-up, Swiggy,  one of the largest food ordering and delivery platform in India has raised $35 million as ‘Series C’ round of funding from new and existing investors.

New investors participating in this round include New York based investors Harmony Partners and Singapore based RB investments. Swiggy was advised by Mumbai based Avendus Capital on the latest transaction.

Speaking on the fresh infusion of funds, Sriharsha Majety, CEO, Swiggy, said, “We believe that our growth and success are a result of our customer-centric approach. Our enormous growth, high percentage of repeat customers is testimony to the fact that we strive to constantly outdo ourselves in terms of customer satisfaction. While our focus will continue to be growth across all geographies, we will now concentrate on profitability and sustainability in established markets. The end goal is to revolutionize the way India eats. We are looking to surpass existing standards, set higher benchmarks and delivering over 1 million orders a month in the near future. “ The online food ordering marketplace that had previously raised $ 18.5 Million from Norwest Venture Partners, SAIF Partners and Accel Partners, is inspired by the thought of providing a complete food ordering and delivery solution to customers and the product is wholly dedicated to their cause.

Currently present in 8 cities across the country, Swiggy is operating in more than 100 neighborhoods with over 3000 delivery contractors.

5 reasons that make investors’ garner love on Swiggy:

No looking back: It is notable that the order count on Swiggy has grown over 20 times in the last few months. The online food delivery model has seen continuous growth in orders from its inception. And, this has assisted them to expand to other cities.

Working on time frame: As it happens in most of the cases that delivery time that has been proposed is not actual delivery time when one orders food. In spite of the surge in orders, Swiggy has maintained an average delivery time of 36 minutes per order. Hence, giving the customers’ a reason to order food from them, making investors’ believes that they are adhered to what they promise.

A single window for ordering: From a wide range of restaurants, Swiggy possesses its own, independently-driven fleet of delivery personnel for picking and delivering orders to its customers. Having its own delivery fleet enables them to offer their customers a variety of convenient features like faster deliveries, no minimum order and live tracking of their delivery.

Growth driver: Having been launched at a time when India is going through biggest phase of food-tech development, Swiggy has worked as growth accelerator for many start-ups.  And continue to focus on it; they will use the newly received funds to consolidate Swiggy’s position as a market leader and to capture a larger share of the burgeoning US$ 15 billion food delivery sector in India.

Top quality leadership: Founded by Sriharsha Majety, a BITS Pilani and IIMC alumnus, Nandan Reddy, BITS Pilani alumnus and Rahul Jaimini from IIT Kharagpur, Swiggy brings the best experience on boards at a time when food business is facing the digital disruption.

Investors’ View:

• "We first invested in Swiggy in Jan 2015 when the team comprised of 3 co-founders and delivery executives, serving parts of Bangalore. Since then, in just 12 months, they have built a formidable team, becoming a pan-India player and gaining clear leadership in online food ordering market. This has been made possible due to the team’s obsession about giving a great experience to their customers. We believe that Swiggy is on track to become one of leading consumer internet companies in India and are really excited to partner them in this journey,” said Mukul Arora, Principal, SAIF Partners.

   • “Swiggy offers a strong value proposition for both customers and restaurants, transforming the way people eat in India,” said Sumer Juneja, Director, Norwest Venture Partners. “We have been exceptionally impressed with the execution of the team, particularly over the last few months in which they have expanded service to 8 new cities and made investments in superior talent, while continuously improving customer experience and delivery times. We are excited to continue to be part of Swiggy’s story and working with its visionary founders and management team.”                 • “After analyzing the consumer landscape in India, it quickly became clear to us that Swiggy is the food delivery company that is best positioned to win given their focus, execution, and long-term vision,” said Michael Chou, Partner at Harmony Partners. “Their growth is very strong, but moreover Swiggy provides a much better experience to customers and restaurants, the two key stakeholders in the ecosystem. We are very excited to partner with them and help broaden their lead.”

With new and emerging concepts hitting up the Indian food space, 2015 saw seventeen deals in the space with an increase in investment flow by 93 per cent to $130.3 million.

According to Chennai-based Venture Intelligence, food technology start-ups attracted $130.3 million investments between January and September 2015. The five deals in 2014 brought in $67.7 million and six deals in 2013 $42.06 million, reported Business Standard.

This year's top three deals are $16.25 million pumped in by Sequoia Capital, Nexus Venture Partners and Matrix Partners into TinyOwl, $16.5 million by SAIF, Norwest, Accel and DST Global in Swiggy and $60 million by Temasek and Vy Capital in Zomato.

Experts also said that food start-ups would continue to thrive for five years and the popular one will be Zomato, Quinto, ChefHost, MeDine, Momoe, DineOut, BigBasket, HalfTeaSpoon, Eatlo and Fresh Menu.

Investment in food start-ups rises 93 per cent in 2015 "We have seen immense growth in the last one year in Mumbai. TinyOwl has partnered more than 4,000 restaurants," said Harshvardhan Mandad, co-founder, TinyOwl.

"There is huge potential and more start-ups will grow substantially over the next five years with slight changes in the business model. They may be acquired early," said Vikram Gupta, founder and MD of IvyCap Ventures.

Online food delivery in India grew 40 per cent to Rs 350 crore in 2015 and accounted for 17 per cent of the online services market, according to the Internet and Mobile Association of India (IAMAI). Restaurant discovery portal Zomato launched its ordering service in April.

Investment in food start-ups rises 93 per cent in 2015 Hyperlocal delivery services, such as Roadrunnr, which received an investment of $11 million in June and Delyver, which was acquired by Big Basket in the same month, have latched on to this growth. "There will be significant value creation in online food ordering, and a mobile-only approach is the way to win. TinyOwl is a part of our broader portfolio of investments in local services and this will be an important area," said Rishi Navani, co-founder and MD, Matrix India.

According to Sarath Naru, managing partner of Ventureast, "We are staying away. One of the things we look at it is a business should have backward integration." 

Valuation in the segment is another challenge, according to investors. "They are seeking valuation of three years from now. But competition is also increasing. People are realising if you are looking at 20 companies, you do not necessarily have to work with the one seeking the biggest valuation," said a venture capital investor.

Year 2014-15 saw numbers of food-tech start-ups entering the Silicon Valley with lots of innovative concepts hitting the industry. Chef-driven food-tech aggregators, online food ordering portals, healthy food deliveries and the Ghar-Ka-Khana segments have highly heated Bengaluru during these periods.

The city appears to be a tech-imbued, and has welcomed technology with open arms and the pool of talent has helped make resources easily available and put some great minds together.

According to Compass Report, “Bengaluru boasts an incredibly youthful startup ecosystem, with the youngest average founders’ age of all the top 20 ecosystems.”

Along with IT infrastructure that brings large pool of techies and cosmopolitan culture, Bengaluru has other advantages in terms of educational and entrepreneurial institutes. But now Bengaluru has become a hub for food start-ups. And with some much opportunity, this city provides the best opportunity for home chefs, food experts to make their career.

“I think people are much more aware here about whole startup ecosystem. People here are willing to experiment new things. Bengaluru is an adventurous place, people frequently eat out. So, there is lot of demand. And there is also supply of people.  People are early adopters of start-ups here,” shares Sai Priya Mahajan, Co-Founder of Eatlo.

In last couple of months, Foodtech startups in India especially Bengaluru have taken the spotlight, even overtaking the attention from the Indian e-commerce space. From expansion plans of brands like Eatlo, Swiggy, Dazo it seems a trend of not just customers but also VCs putting their money where their mouth is.

Not only this, because of the technical skill of the city, Bengaluru was ranked among top 10 favourite destinations for entrepreneurs and home to more start-ups than any other city in the Indian sub-continent. The tech hub aims to grow 1,000 start-ups in the next three years and also link them with international firms which will support the businesses to expand their operations in India.

Commenting on the same lines, Pushpesh Dutt, Co Founder & Managing Director, Tandurust Healthy Food Pvt. Ltd. says, “People are getting motivated from other startup that has set good examples for others, so that they can also do something. Bengaluru is a cosmopolitan city, so issues regarding good quality food and catering services are there. People come from different parts of country, so they want authentic food and this is the right time to experiment with their innovative ideas.”

Nasscom reported that most startups in Bengaluru are in the field of e-commerce, big data and analytics, enterprise resource planning and productivity and collaboration. 13 percent of the start-ups have been founded by people below the age of 36 years and are inviting investments from countries like China and Japan.

Hence, with a mix of innovative start-ups, aspiring entrepreneurs and food-lovers discussing on various aspects of the food and beverage industry in India, the city is really going to see some more tech-start ups in coming years.

In the last two years, India has seen more than a dozen food start-ups coming up with new models and categories. On the one hand, technology-based food startups like foodpanda, TinyOwl, Zomato and other players in the segment are gaining momentum while on the other hand; food delivery startups are coming up with tiffin and healthy or home-cooked food delivery businesses.

Moving with this uncertain growth that is driving the US$13.56 billion Indian food industry growing at a rate of 17 per cent per annum, these companies are getting investors’ attention by raising funds for their expansion in the country and also for strengthening their team.

Gurgaon-based Bite Club Bite Club, a food ordering startup, has raised Rs 3 crore in funding from Powai Lake Ventures, with participation from angel investors including Aneesh Reddy (Capillary Technologies), Ashish Kashyap (Goibibo Group) and Alok Mittal (Canaan Partners).  The group is planning to use the raised funds for building technology, growing operations and expansion of the brand.

On the other hand, Chaayos, started in 2013 end, and being operated by two IITians, Nitin Saluja and Raghav Verma, is in talks with Venture Capitalists to raise funds. With eight outlets in Delhi-NCR, the gourmet chai player is planning to tap the Pune, Mumbai and the Bengaluru market by end of 2015.

“We have not yet finalised the deal but are in advance talks with VCs to raise Rs 40 crore which will be used for expansion of the brand, building team and marketing the brand right,” shares Raghav Verma, Co-Founder, Chaayos.

According to experts, food startups are the future of Indian food industry as they know the right nerves of the changing trends and there is a very different excitement happening around this development.

Likewise, Swiggy, a food ordering and delivery company based out of Bengaluru has raised Rs. 12 crore from Accel Partners and SAIF Partners. Founded on the idea to get food delivered for the best restaurants in a neighbourhood, the group has its own fleet of delivery personnel who pick-up orders from restaurants and deliver it to customers.

Commenting on the same, Accel Partners, one of the investor groups in the company says, “Accel Partners, founded in the year 1983 has been committed to helping exceptional entrepreneurs build lasting, category-defining technology companies. Utilising a focused, "prepared mind" approach to investing, we partner with businesses that show potential for significant long-term success in specific sectors.”

Thus, we can see that the scene in the Indian food industry is changing with investors not only willing to invest in the casual dining and QSR segment, but also in food startups, which is gaining momentum these days.