The pandemic has decimated the restaurant business across formats all over the world, but also facilitated creative ideas as entrepreneurs find ways to cope. One way in which top chefs and restaurants are trying to tide over tough times is by focussing on the delivery format. Internationally, much innovation is happening here — a spurt in complex, ready-to-drink cocktails, high teas delivered in tiered trays by the likes of Four Seasons, and even collectible crockery. As brands try to outdo each other, the emphasis is on not just high-quality ingredients, but presentations and mechanisms such as butler services to up the home dining ‘experience’.
In India, we are seeing similar growth in upscale deliveries — a big change from the pre-Covid days. Anonymous cloud kitchens with questionable hygiene and indifferent cooking catered to a large base of consumers with average order values of just ₹200-₹300. Today, these dark kitchens are out. The emphasis is on brand, as well as high average order value, even if this means fewer deliveries by upscale restaurants or chefs.
For customers, the play on quality is welcome. However, the question is whether restaurants and chefs will be able to earn enough revenue to sustain. Most establishments are treating deliveries as stop-gap arrangements, but does it make sense for them to enter this vertical for the long term? Finally, do deliveries have the potential to be lucrative investments for PE funds? These were some questions I posed to a lively panel of chefs: Prateek Sadhu of Masque, Regi Mathew of Kappa Chakka Kandhari (KCK), Vikramjit Roy of Hello Panda, Saransh Goila of Goila Butter Chicken, and Sharad Sachdeva, director operations for L Catterton Asia, the food and luxury retail focussed PE fund.
Both Sadhu and Mathew were unanimous that their food in the delivery format is very different from their restaurant cooking (the food and experience can’t be replicated) and that this is a temporary arrangement. “Even with deliveries, 65% of our revenue has been wiped off, so we are just trying to do anything to survive,” said Sadhu. Explaining why he is serving popular dishes like biryani and parotta (that were never on KCK’s menu), Mathew says, “People want comfort. This may eventually become a separate vertical.” Roy differed, pointing out that he was trying to disrupt the category with a long delivery menu, with both popular and specialised dishes. Hello Panda has been successful in NCR in its one month of operations. “Our monthly revenue is about ₹9 lakh and the average order value is high,” he said.
While the category is attracting a more evolved clientèle, scalability and affordability will remain crucial in the long run, highlighted Goila. “Multiple kitchens to cater to hyper-local markets and affordable pricing will be key.” As brands compete with each other and walk the quality-price tightrope, banking on tech is important. Apps that show consumers how their food is made, for instance, will give chefs an edge.
Even popular deliveries typically make one-third the money of a comparable restaurant size, but with scale, they could be the next sunrise sector. All the chefs were unanimous in their vote of low confidence to delivery aggregators and felt their own fleet of personnel was vital in an upmarket space.
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