CUISINE in the Cloud Kitchen

Karan Singla, who is passionate about food-tech is presently the Head of Operations - India BU at Rebel Foods, has over 12 years of work experience in the Indian automotive industry. His vast experience includes functions in new business development, business plan evaluation, financial assessment, and end-to-end operations management in the automotive sector. A mechanical engineering graduate, from Punjab Engineering College, he has worked with Maruthi Suzuki, Volkswagen and Audi in his previous roles. In an in-depth interview with Corporate Citizen, he talks about how Rebel Foods, the largest virtual restaurant chain in India is galloping ahead with innovation, technology and unconventional ideas with a dynamic team of employees

Corporate Citizen: Rebel Foods is the largest virtual restaurant chain in India and perhaps the world. How was the seed sown?

Karan Singla: We started as a brick-and-mortar brand called Faasos selling wraps, in Pune. Though we expanded to 50 stores in a few years, however, we weren’t making as much profits, nor were we able to scale up faster. The reason is the rent-to-sales ratio, and though we had 50 physical stores, we realised 75% of our orders came from delivery. A survey showed 73% of the customers knew our brand but had not seen the outlets. That acted as a light-bulb moment for us. If people are willing to order our products without seeing our outlet, a model similar to buying clothes and books online, food could be completely sold online too. We closed our outlets, booked kitchen spaces on industrial estates with lower rents and started “internet restaurants”. We have been working hard towards building a variety of brands to cater to our consumers’ requirements of diverse food options, available at a click of a button.

CC: Could you explain the unique concept of Rebel Foods of creating and building delivery-only food brands and cuisines on the internet? How is it different from food delivery companies?

Rebel Foods has done to the food industry what Netflix did to Blockbuster Cinemas or what Uber did to the traditional taxi companies. Traditionally, the food industry has been large Quick Service Restaurants (QSR) chains opening huge restaurants where a customer would come and dine-in. As a business model, this model is high on overheads and not very forgiving, especially in countries like India with very high Rent-to-Sales ratio. It’s not easy to build QSR businesses in India unless one has very deep pockets.

In 2015, we saw that only 25% of orders came from dine-in and a major chunk of the expenditure was incurred from running the dine-in business. This is where the founding team took the step and opened delivery only outlets and this is where the magic happened. People loved our food; there was a mind shift change and a lot more people were ordering online, and we saw an increase in online orders. This is where the idea of ‘Internet Restaurant’ started.

With internet kitchens, we also realised that we could launch multiple brands from the same kitchen, and this is where Behrouz Biryani and Oven Story were born dishing out pizzas, biryanis and wraps all from same kitchen under different online brands.

This is where I feel we disrupted the traditional QSR industry. Rebel Foods is very different from Food Delivery aggregators. An aggregator is like a marketplace where you can order from various restaurants and they only do the delivery service. They don’t own the quality of food. At Rebel Foods, we own the complete cycle. Right from sourcing the ingredients, to making food and then delivering it through aggregators or own websites and apps, we own the complete Farm-to-Fork journey.

CC: Which are the food brands that come under your banner? How do they operate to reach the customer?

We offer brands across almost all customer food missions (Serving single-serve to multi-serve) across cuisines.

You can party your way with Biryani and pizzas with Behrouz Biryani and Oven Story and you can order your daily meals from Lunchbox, The Good Bowl, Faasos and The Biryani Life. You can get some great cheesecakes and desserts from Sweet Truth, which is already the largest Dessert brand in the country. You can order your favourite Chinese food from Mandarin Oak and enjoy some mouth-watering lasagnas and pasta from Firangi Bake. We also offer Coffee through our launcher brand - Slay Coffee. Very recently, we added Wendy’s to our portfolio in India. We reach our customers through our apps, or through delivery aggregator partners such as Swiggy or Zomato.

"We have a robust supply chain network working with central kitchens and logistic partners which keep replenishing our 325 kitchens across 35 cities"

CC: Tell us about your supply chain and about the branches in India

We have a robust supply chain network working with central kitchens and logistic partners which keep replenishing our 325 kitchens across 35 cities. We focus a lot on consistency and that is possible only because of the amazing supply chain network created by our team. The robust supply chain has what helped us to maintain the consistency of taste across the country. This is because we use the same ingredients across our stores, along with standardisation of recipes.

CC: Rebel Foods has also spread its tentacles across the seas. Tell us about your presence in the international market.

In 2019, Rebel Foods expanded overseas, setting up the first outlet in Indonesia, followed by outlets in the UAE and the UK. Last month, we expanded our footprint to Malaysia and Singapore as well. Some of our brands travel globally as concepts, though we tweak the menu and taste profile to appeal to the local palate. Among them are Behrouz Biryani (biryani + Indian), Mandarin Oak (Chinese + pan Asian), Oven Story (pizza), Sweet Truth (desserts) and Faasos (wraps) and Wendy’s (Burgers). They are launched as local brands, for example, we launched Banzai (Japanese) in Indonesia, 500 Calorie Project (Healthy) and Sawa (Lebanese) in the UAE, as separate local brands. The international businesses have grown significantly during the pandemic in 2020. We are at about 160% compared to pre-Covid-19 in markets like Indonesia and UAE.

CC: Did the Covid-19 give a fillip to your innovative cloud kitchen model? If so, in what ways? What are the factors that changed for your company in this pandemic?

In the early days of lockdown, sales slumped by 70%, but thanks to the love for our brands in consumers, we have recovered and are almost there in pre- Covid-19 volume. The pandemic resulted in shutting down of various brick and mortar stores for many other brands. This is where we looked beyond just our in-house brands and started the Rebel launcher initiative, inviting food companies to operate their brands from our kitchens. Our “Launcher Program” offered our operating system (kitchens, technology, distribution channels and supply chain) to food entrepreneurs to scale their brands. We also promised funding for scale up once there is significant evidence of product market fit and positive unit economics. We already have Mad over Donuts, Natural Ice Cream and Anand Sweets delivering from our kitchens.

CC: How has Rebel Foods evolved since 2011 in terms of technology enablement through innovation, robotics and so on?

From being a QSR company, we have evolved into the largest cloud kitchen player, globally. We were able to do this only because we used technology and data extensively. All our kitchens work through a common Point of Sale (POS) system, which gives us real-time visibility of all data. We analyse each bit of data to take our next steps. Whether it is customer experience scores, productivity inside kitchens or our marketing spends, we are able to do this through the data that is generated. We love doing pilots and finding the right product-market fit, however, we scale-up only when we have proof from the data if a product-market fit has been achieved. Customers remain the focus for us in whatever we do and innovations we take up. Robotics is also being used to increase capacity in kitchens so that consistency in quality and taste of the food is not compromised while being delivered at home to consumers.

"From being a QSR company, we have evolved into the largest cloud kitchen player, globally. We were able to do this only because we used technology and data extensively"

CC: What is the profile of your customers in terms of age, social status, and economic status? How do you assess demand and niche sections of consumers?

We have customers of all ages and demographics ordering from our brands. As a matter of fact, this is how we plan our brands and cuisines. We have customers who enjoy morning breakfast and coffee from Faasos and Slay, then order lunch from Lunchbox, indulge in evening office craving pizzas from Oven Story and dinner family party with Behrouz biryani followed by delicious desserts from Sweet Truth. We follow a 2x2 matrix for addressing every food mission of consumer; on one axis you have regular daily consumption to occasion-based indulgence. On the other axis, you have single/couple consumption moving upwards to group consumption. All our brands lie in this matrix. Faasos, Lunchbox address regular daily consumption for single/couple survival missions, Behrouz Biryani and Oven Story Pizza fall on the top right corner for indulgent group orders. This way we cover all masses in the online ordering segment across all ages in the cities where we are present.

So, we are in a customer’s home the whole day and that is what our mission is-to access demands in niche sections, we believe in listening from customers themselves. We do a lot of pilots and keep running them till we achieve the right product-market fits. Once the same is achieved, successful scale-ups are done as we already know the customer choice.

CC: It was indeed innovative of the founders to rise over and above the physical store and pioneer the cloud kitchen model. What is your company’s vision in the next five to ten years?

Going forward, we plan to make and scale more products and brands. We have an operating system, and we intend to build on more food missions through this operating system. We also plan to create entrepreneurs who can scale through our platform – Eat Sure. We will not own the brand, but simply give them a platform and the expertise to scale-up their brands. We want to be a global food tech company which is not only offering food, but also everything related to food.

CC: You are passionate about the food-tech industry. How did you get interested in it?

The idea of food industry comes naturally to me as an inheritance. My grandfather ran a small canteen in a cinema hall in Chandigarh for many years and my dad worked there with him. I have grown up listening to their stories of how customers would come for coffees and samosas there, and my dad along with his brothers donned the role of a chef to a server depending on who was on leave on that particular day. My father opened his own restaurant at a food court in 2013. Seeing the restaurant, I had always felt that the food industry missed this model of delivery at home leading to high non utilised manpower and retail space. Rebel Foods being a food tech company, which uses technology and data as its foundation achieved this and cracked the code. I feel this is one of the biggest disruptions in the last 20 years in the F&B segment.

"The delivery business is growing at a very rapid pace and this is validation for the number of customers moving away from home food"

CC: What is your role and responsibility in Rebel Foods?

I take care of Operations in Rebel Foods. My team and I ensure that every order placed in our kitchens is served as a memorable experience to each consumer, in every part of the country.

CC: As Head of Operations, India Business, what are your plans to the enhance business? Any innovation or unique strategies in the offing?

The next innovation will be inside kitchens where we bring on robotics and enhanced operating systems to serve and increase the volume of our orders without incurring additional costs. We have already invested in real estate and now we will focus on how to maximise the revenue by enhancing our capacity to serve more. We have a great in-house team for technology and robotics, which is working on creating some wonderful machines to make life easier for kitchen operators and ensure consistency and standardisation.

CC: What are your observations about the tastes of Indian consumers?

Indian customers love their biryani and pizzas and these are the highest selling categories in the country followed by burgers. Then there is a fragmented market of North Indian and Chinese meals being offered by many small restaurants. Also, consumers are now focused on the quality of food, as much as the taste and price points. Therefore, it is an important shift we have noticed about the preferences of our consumers.

CC: What are your observations about the Indian consumer’s changing concepts about the kitchen and home-made food?

The kitchen and homemade food may be passé even in India in a few years. Home delivery has made life easier and convenient and simply because your favourite food is just a click away. The delivery business is growing at a very rapid pace and this is validation for the number of customers moving away from home food.

CC: What is the future of food business that is coming on a platter for the Indian family?

In my view, we have started moving towards replacing home kitchens. Food delivery at home has ensured that hot and varieties of cuisines are available at home under one hour from almost any brand you like. People in metros have started living by Swiggy and Zomato and even I personally don’t know anyone who does not order online. The trends are catching up in smaller cities as well. I see my parents who are not very inclined towards technology ordering online at least twice a week and on the same note, I see my nephews and nieces ordering their favourite food almost every single day. I don’t cook but I do order very frequently. Also, an interesting observation is that microwaves are used more than gas stoves at most of my friend’s homes. Similar trends are catching up and soon we may see a day when home kitchens could almost die.

CC: How will the pandemic generally affect the food business in India?

The year 2020 has been very challenging for the food industry. We saw many restaurants shutting their outlets as people were not going out, and neither were they eating out due to hygiene and safety concerns. The chefs went back to their hometown and absence of chefs and helping hands has made it difficult to re-start without reinvesting a huge amount of capital. But the pandemic has opened a huge opportunity for growth in the delivery business. Combine that, and I feel serving true dining experience at home through delivery will be future of food business.

CC: Please tell us about your journey from working in the automobile industries to the food-tech industry.

I spent 12 years in the automobile industry selling cars to the mass market and moved eventually to the premium segment. The whole industry has a very strong foundation with 100+ years of learnings in understanding consumer requirements and developing technology and products. I learnt a lot there, however, I always felt a disruption was on its way with Tesla and Uber. Similarly, Rebel Foods is leading that disruption in the food industry. I was always fascinated by its business model coupled with the vision of Jaydeep Barman and the founding team. So, the move came naturally to me as I wanted to be part of the industry I loved and a company that was challenging the whole fundamentals of the food industry. I can easily say that this was one of the best decisions I have made, as my learning have been immense in the last two years. I am blessed to have great peers and a team, which is always ready to support and challenge the status quo.

CC: What is your advice to young student managers who would like to make a career in the food industry?

My advice to youngsters will be-Do not try and skip the struggle for that is where a character is built. One should embrace it, learn from it, and grow with it.

CC: What is the philosophy of life you live by?

There are no shortcuts to success. Work hard and never give up. There will be tough times, but they will only make you stronger.

Rebel Food’s Disruption dynamics

Rebel Foods (previously known as Faasos, was found in 2011 and renamed in October 2018) founded by Jaydeep Barman (Co-founder and CEO) and Kallol Banerjee (Co-founder). It is the largest virtual restaurant chain in India, having grown from 20 restaurants in 2011 to 3000+ restaurants across the nation, Dubai and Indonesia at present.

About five years ago, in 2015, Rebel Foods realised that the physical store model would not disrupt the industry, which is when they pioneered the cloud kitchen model in India. Brands that today have a presence across the nation, on this model, include the likes of Faasos the leader in the Indian wraps space, Behrouz, a 150 crore+ brand in the biryani space, Oven Story, which aims to be a leader in the pizza space, Mandarin Oak in Chinese offerings, Lunch Box in the North Indian foods segment, Sweet Truth which again intends to dominate the dessert market and Firangi Bake, in the glocal baked foods space, among others. The company quickly expanded to multi-city operations and grew to over 50 stores in the next few years by disrupting a USD 8 billion Indian market through the use of technology, robotics-led processes and making supply chain and food production effective. The founders realised early on that they had a terrific opportunity to build India’s largest restaurant brands, riding on their cloud kitchens, supply chain network, culinary expertise and technology. This was based on facts such as India having only approximately 100,000 restaurants, while neighbouring China has 7,000,000, or 70 times as many. With multiple food brands under its belt, namely – Faasos, Behrouz Biryani, Firangi Bake, Oven Story, Mandarin Oak, Sweet Truth, Slay Coffee, The Biryani Life, Wendy’s and Lunch Box, Rebel Foods has been bullish on distribution and delivery from day-one, riding on their philosophy of “One Cloud Kitchen = Multiple Restaurant Brands”. Today, Rebel Foods is at the cusp of revolutionising the business of building and running virtual restaurant brands, globally. The company has 1500+ restaurants across the country and are now working on building a network of restaurants that is five times larger than any other in India and thereby becoming the largest food player (internet or not) in the country.