Rebel Foods is set to scale up partnerships with third-party restaurants chains which are using its cloud-kitchen network for expanding the reach of their own brands.
The company operates cloud kitchens from more than 320 locations for its own gourmet brands such as Faasos, Behrouz Biryani, Mandarin Oak and Oven Story, as well as outsources its kitchen to other brands under the Rebel Launcher Program. Currently, it works with 15 restaurant chains—both large and small—including Natural’s ice-cream, Mad Over Donuts, Wendy's and Anand Sweets, among others.
Rebel is set to add another 15 brands in the next three to four weeks, and scale significantly the number of “internet restaurants" from the current 250 to 400 by end of March under this Program.
“Post-covid Rebel Launcher evolved in a different manner. We have really picked up pace on this and right now there are almost 15 partner brands working with us," said Ankur Sharma, co-founder and chief business officer, Rebel Foods.
There are almost 250 unique internet restaurants operating with the company right now. “The idea is to take these to almost 5-6 times (in number) more by the end of this calendar year. In fact, by the end of March, 250 will become 400. We have a couple of deals and big brands that have gone through," said Sharma.
The move is significant for the eating out industry that struggled to survive as covid-led disruptions led to temporary store closures. Restaurant chains, that for most of last year worked under restrictions, also scaled up their delivery capabilities and jumped online to win business.
The Launcher Program, first rolled out in 2018, effectively offers a ready-made operating system—kitchens, technology, distribution channels and supply chain—to food entrepreneurs to scale their brands. This could be in a single location from where multiple such “internet restaurants" function. These brands sell by listing on food aggregators.
In India, cloud kitchens—that are essentially commercial cooking facilities with no physical dining space and catering only to delivery orders placed online—are projected to become a $2 billion industry in India by 2024, according to RedSeer Management Consulting.
More recently, Sequoia-backed Rebel Foods partnered with Sierra Nevada Restaurants to develop and operate approximately 250 Wendy’s cloud kitchens pan-India.
It has already opened 20 Wendy’s kitchens in the Delhi-NCR region. Another 20 such cloud kitchens are expected to come up in the next four to five weeks.
Sharma said more associations with the size and scale of Wendy’s are underway. “The Wendy's deal has opened a lot of doors for Rebel. So a lot of international brands have approached us. Lot of talks in progress and there could be something big in next quarter or so," he added.
Mad Over Donuts signed up with Rebel last year as the country was coming out of the lockdown. “When stores were shut between April and July, that was the time we wanted to open more spaces and it prompted us to work with Rebel. It is a scalable model, but the top-line however isn’t the same as we get from stores in high streets," said Tarak Bhattacharya, executive director, Mad Over Donuts. The chain has 65 outlets in India and expects 20-25% of sales coming in from cloud kitchens over the next few years. Store presence, he said, will still continue to be critical for the brand’s expansion and visibility in India.
To be sure, acceptance even from traditional brands moving towards cloud kitchen has become much higher, and as an ecosystem, people have started understanding it a bit better. Sharma said typically, high-street rentals in India for restaurants operate at anywhere between 15% to 18% of their top line. "In case of an efficiently managed cloud kitchen, that number should fall anywhere between 3-6%," he added.
Associations with third-party brands are not new for Rebel. In fact, it helped entrepreneurs Lakshmi Dasaka and Chaitanya Chitta scale up the Slay Coffee brand online.
Several food services companies announced investments in building cloud kitchens last year after covid impacted the eating out market. Lite Bite Foods—that runs restaurants under Punjab Grill, TRES, You Mee, said it plans to open 35 cloud kitchens under LBF Cloud Kitchens. The kitchens will be used to expand the reach of its existing brands as well as introduce new cuisines and meals that are popular among at-home diners. Impresario Handmade Restaurants, which runs the popular Social and Smoke House Deli restaurants, last year said it will double-down on its cloud kitchen formats.
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