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Food Is In the Air: Cloud Kitchen – The Next Big Bet

Updated: May 13, 2021

Confession: The entire editorial board of this newsletter loves food!
Bigger confession: Due to our unapologetic craze for startups, what we love even more is the tireless efforts by entrepreneurs to find new ways of getting us more food, tastier food, and easier access to food.

That’s why we got super excited when we heard that the Future Group, famous for its hypermarket chain Big Bazaar, announced that it’s diversifying into the Cloud Kitchen business. Cloud Kitchens, also known as Ghost Kitchens or Dark Kitchens are pure delivery units with no facility of dine-out, often dependent on the logistics network created by food delivery companies like Swiggy and Zomato. The founder and CEO of Future Group, Kishore Biyani disclosed some mouth-watering insights to Economic Times:

The group plans to sell rice-based meals at a finger-licking-cheap rate of ₹40 only. The CEO expressed that the food industry is shadowed by thin margins but let's admit it if there is anyone who knows how to master survival in the face of thin margins, it is the Future Group that also runs affordable garment brands like fbb and Brand Factory. The only way to achieve such rates, as Biyani explained was by leveraging the existing value chains of the group. The group owns rice and flour mills, factories, and logistics companies. If all the value chains are used well, Biyani might as well be able to create a sizable dent in the food industry.


While we’re at it: In November’19, co-founder and ex-CEO of Uber, Travis Kalanick’s, ‘CloudKitchens’ raised USD 400 million dollars from Saudi Arabia’s sovereign-wealth fund, leading to a post-money valuation of USD 5 billion dollars. As reported by Economic Times, the 4 years old company is also making an entry in India, currently working in ‘stealth mode’. Earlier this year, it was also reported by YourStory.com that Kalanick has invested in Pune based Rebel Foods, the largest cloud kitchen in India, operating 222 cloud kitchens including Faasos and Behrouz Biryani.


Word: Kalanick also loves food. We know this for sure because Uber’s ‘gold-mine’ UberEats, one of the world’s largest food delivery businesses, is also his brainchild.

The big picture: The Foodtech startups in India have raised as much as USD 2.93 billion till date. The sector has witnessed exponential growth in the last 3 years and is projected to grow from USD 44 Billion in 2016 to USD 86 Billion by 2023.

With the big players finally making inroads, the development of the sector in the coming months will be exciting to observe. And of-course among all this, it is our pursuit for more food, tastier food, and easier access to food, that just becomes easier.

 

This article is a part of the February'20 edition of our Startup Newsletter. Here's the complete publication:


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