An interview was organised by BW Business World with Ishita Sudha Yashvi about her new venture Cross Border Kitchen. Ishita is a Delhi-based women who is as Former head at Forest Essentials and General Manager of Marketing at DLF Retail.

Founder of Cross Kitchen Border, Ishita Sudha started this venture along with her four childhood friends. As they all believed that there is a need to cause some disruption in the market and create something of value. In conversation with the BW Business World she provided an insight about the organisation and her journey towards it.

1. Brief us about your business model like how did the idea came to start and how does it work (step by step procedure)?

The idea for Cross Border Kitchens (CBK) was conceived over a dinner table conversation between four friends - Ahsan Qureshi, Ishita Yashvi, Mayank Singh, and Mohit Mehta. Our love for great food and our passion for hosting and feeding others got us together to create a unique business model.  In early 2019 we launched Cross Border Kitchens - a multi-brand, multi-vertical food-tech company. We are using our cloud kitchen network to build an F&B enterprise that lets us introduce an entire universe of food brands across multiple cuisines and price points, distributing it not only online, but also through physical outlets, kiosks, carts, and via catering and through aggregator partners – Zomato & Swiggy. 

Since our founding, we have opened 3 cloud kitchens, launched 10 brands, and are operating 27 internet restaurants. Our current brand portfolio includes Biryani Central, BroMomo, AIM Burger, Chutney India, Irfan Bhai, The Meal Bowl, Pind Patiala, Biryani Affair, and Nawab Ke Kebab. 

As a founding team we bring multi-decade experience and success across F&B, marketing, finance, and strategy. We are building a large-scale enterprise by:

• Bringing superior quality and authentic food options to the market and doing it consistently at scale.
• Maximising asset efficiency by launching multiple brands with minimal additional capex deployment at each kitchen location.
• Distributing our products across multiple verticals.
• Focusing on a differentiated marketing strategy.
• Creating and using technology to support and enhance all aspect of our operations including supply chain, delivery, kitchen operations and user experience.

2. What are the unique key points of your company?

We focus on three key areas that have allowed us to deliver a superior product while allowing for scalability at the enterprise level. 

• First, operational excellence:
  • We own all key processes - from food prep, to packaging design, to food R&D, to our own delivery rider force.
  • Highly skilled kitchen staff for cooking and training; 75% of our senior cooking staff comes with 5-star backgrounds.
  • Our kitchen types and their design and placement have been created with scalability as a driving factor with centralised mass cooking as a key tenet; we have further developed a cold chain network to manage scaling.
• Second, MARCOM 
  • To move away from a predominant discount only selling strategy in the market, we have focused instead on a robust marketing and communication strategy that not only allows us to give shape to a brand and its language but also allows us to market it well.
  • We have done this by building an analytics driven ad-agency in house that allows us to launch brands and respond to market situations quickly and efficiently.
• Third, Technology 
  • We are working on building out our own tech-stack that will be the backbone supporting all aspect of our operations including supply chain, delivery, kitchen operations and user experience
  • The tech-stack will further allow for data collection, data analysis and knowledge management in every aspect of decision making throughout the enterprise

3. How are you different from the existing competitors?

We have championed the multi-brand, multi-vertical model from the outset and are utilising technology, culinary art, marketing, and operational excellence to deliver a memorable gourmet experience. Our model enables us to be CAPEX efficient, scale fast, and significantly reduce overhead rate.

4. What is the funding status and monetisation model?

We closed a strategic angel round early in 2020. We derive our revenues from online food delivery, institutional and home catering, and will soon be adding physical outlets and additional e-commerce revenue verticals. We have achieved unit level profitability at each of our kitchen locations and expect corporate level profitability within the next quarter. We are projecting a Revenue Run Rate of INR 14.5 crore for FY 20.  

5. What challenges are you facing in running your business?

One of our primary challenges has been to find suitable enterprise level IT solutions that are customisable to our model. Robust and integrated IT solutions from multi-brand POS systems to enterprise level inventory management and data analytics do not currently exist in a format that is applicable to our model and subsequently to our planned growth. While the existing solutions were a good starting point for us, they are not a long-term answer. We recognised this challenge early and are building out our own tech stack internally to overcome this obstacle. 

6. How has been the people's/TG response so far?

We served over 100,000 orders in FY 2019 and are projecting 500,000+ orders in FY 2020. We have an extremely healthy 49% customer retention across our portfolio and are very tightly integrated with the primary integrators in the industry, Zomato and Swiggy. Our performance metrics on these platforms consistently show us as a top tier performer in the areas we service. Our initial thesis that there is a large unmet demand for better tasting, qualitative, and authentic food and not just a deeply discounted offering has been borne out by the response to our product.

7. What are the traction details (like users, app downloads & other achievements of the company)?

• We have opened 3 cloud kitchens, launched 10 brands, and are operating 27 internet restaurants
• Serving upwards of 10,000 – 12,000 orders every month
• Hired & retained tenured staff – 75% of our key cooking has 5-star hotel background
• Established in-house R&D capability for food innovation
• Witnessed a 12% hike in cart value and recorded a 20-25% increase in order conversions during the lockdown
• 14% revenue growth from Q4 2019 to Q1 2020
• Our overhead rate has dropped from INR 709 an hour in Q1 2019 to INR 106 an hour in Q2 2020, demonstrating the efficiency of our model

8. How do you look at expansion?

Thoughtful and sustained expansion has been a core tenet of our strategy from the outset and have clearly defined phases for our expansion, both regionally and nationally. We plan to expand to 5 kitchen locations operating 53 internet restaurants by the end of Q2 2020. We expect to have a national footprint within the next 5 years.

9. What are your marketing plans?

Aggregator marketing for our cloud kitchen vertical is a key aspect of our marketing plans – we are deeply integrated with Zomato & Swiggy to drive sales. In addition, we are a digital-first organisation and have a sustained and thought out content marketing strategy across our social platforms. CBK also spearheaded an aggressive influencer marketing strategy, one of the first in the F&B industry, especially within the online delivery vertical.  

10. What has been the biggest learning’s so far?

To achieve the goals set out by CBK’s founding team – we need multiple centres of excellence within CBK. Great tasting food has been the core of our business but in order to make this great tasting food reach thousands of locations we would need to develop supply chain practices that are unprecedented in the cloud kitchen and F&B space. We will require a full tech stack that can support our growing scale. Simultaneously we will require superior MarCom practices to develop and grow our brands. All these need to work together to support the other functions. 

11. What is the market size and opportunity?
The online food delivery market in India is expected to grow at a compounded annual growth rate of ~30.55% with a ~10.19% compounded annual growth rate in the user base during the 2020-2024 period, generating  revenue of INR ~1,334.99 billion and develop a user base of ~300.57 million by 2024.