The founder of cloud kitchen startup, Curefoods, is on the Digital Cover of Entrepreneur India for May 2023
People continue to place internet orders. However, India is a brand-starved nation. They can either order from large American QSR (quick service restaurant) franchises or from independent eateries. The Indian multi-brand cloud kitchen firms, which include us and a number of other talented entrepreneurs, fit in there because there is nothing in the between.
According to Nagori, the segment would continue to grow between 15% and 20% annually over the next ten years. This implies that many of these cloud kitchen firms, like Curefoods, have the potential to significantly contribute to the Indian F&B ecosystem and, in some situations, even outperform American QSRs.
The working conditions at some cloud kitchen platforms, however, have been criticised as being unclean.
I had the good fortune to join the Flipkart team pretty early on. The next six and a half years were fantastic. I believe that whatever the Flipkart mafia has built is wonderful and should be seen by everyone.
In 2016, Nagori returned to business, co-founding Cure.fit (later rebranded Cult.fit) with Mukesh Bansal (founder Myntra). Cultfit, Mindfit, Care.fit, EatFit, and additional verticals were launched by the company. Curefit stated in 2020 that its food segment, EatFit, would become an independent entity run by Nagori.
F&B pioneering House of Brands
Curefoods claims to be India’s second-largest cloud kitchen player in terms of footprint today. Along with EatFit, the company owns CakeZone, Nomad Pizza, and others. It operates over 150 kitchens in 15 Indian cities, serving over ten cuisines. When asked how easy or difficult it is to build HoB in food and beverage (F&B) versus retail, he stated, “Food is very different from other consumer categories as it has distinct segments and one customer actually plays across many segments.” It’s not like washing powder or cooking oil, where the customer stays for a long time after switching from segment A or brand A to brand B or segment B. There are 28 consumption points every week, seven times a week, four times a day, lunch, dinner, snacks, breakfast, and so on. And each of these has a distinct consumption pattern. When asked how easy or difficult it is to build HoB in food and beverage (F&B) versus retail, he stated, “Food is very different from other consumer categories as it has distinct segments and one customer actually plays across many segments.” It’s not like washing powder or cooking oil, where the customer stays for a long time after switching from segment A or brand A to brand B or segment B. There are 28 consumption points every week, seven times a week, four times a day, lunch, dinner, snacks, breakfast, and so on. And each of these has its own individual consumption pattern. Breakfast on a Monday is not the same as breakfast on a Friday or brunch on a Sunday or Saturday. Then there are different cuisines and price points,” he explained.
Furthermore, Indian consumers enjoy street food as much as they do fine dining establishments. That is why Nagori believes that several goods are required to keep orders flowing throughout the day. “Imagine a cloud kitchen like ours; without a breakfast and snack plan, we won’t have any orders until lunch or dinner.” That is why we require several brands. “Similarly, how can a pizza player or a biryani player get enough orders in a day,” he explained. So, from a profitability standpoint, he believes that having multiple sets of brands makes sense, and that is precisely what he is attempting to build. According to the corporation, Nomad Pizza and Sharief Bhai are among its fastest-growing brands, with quarterly growth rates of roughly 50%.
In terms of structuring the organisation and developing the correct focus and team head for each brand, Nagori has drawn heavily on Unilever and P&G. Nagori also devotes much time to researching the brand he intends to acquire. This also streamlines the process of running all of the brands. He considers product market fit, customer love, and the founders’ mindset when acquiring a brand.
But, how does he find time for himself while constructing a HoB? “I do take vacations, but I believe that when businesses are doing well, you don’t want to cut back too much.” You want to keep the momentum going.”
Momentum is really difficult to come by, and right now, India as a country, we as an industry, and Curefoods as a brand all have significant momentum. This is the best time to build and stay in the game. Before and after the pandemic, there were cloud kitchens.
Cloud kitchens have experienced numerous ups and downs. Many players joined and many players left. To withstand the lockdowns, eateries in five-star hotels shifted to the cloud kitchen model.
“The genesis actually is a few years back when online ordering was becoming a very big thing in India globally,” he remarked when asked to share his thoughts on how the segment has done pre-pandemic, pandemic, and in the new normal. However, many traditional restaurants were unable to meet online demands such as packaging, proper portion sizing, timely delivery, and so on.
And this is where a slew of cloud kitchen firms from over the world, including many in India, sprung up. “After the pandemic, there was a clear trend of people going online first,” he said.
As the pandemic subsided, people began to dine again, and Nagori agrees that the number of diners decreased. However, he added that it was slightly higher than the pre-pandemic number, which was the natural progression.
“People are still ordering online. But India is a brand-deprived country. They can either order from large American QSR (quick service restaurant) chains or from stand-alone restaurants. There’s nothing in the middle, and that’s where Indian multi-brand cloud kitchen firms like us and a few other smart players come in.”
Nagori expects the segment to increase by 15% to 20% year on year for the next 10 years. This means that several of these cloud kitchen firms, including Curefoods, have the potential to become a significant component of the Indian F&B ecosystem, surpassing American QSRs in many circumstances.
However, there have been reports of unsanitary working conditions at some cloud kitchen platforms, and this has tarnished the industry. “How can we address this?”This is not a new issue.
It’s a widespread saying that you should never go into the back of a restaurant because you’ll never come back. Historically, industrial-scale kitchens have been like this. However, some new restaurants are deviating from the norm. Similarly, any cloud kitchen can have either very clean or filthy kitchens. Unsanitary ones, however, are removed from services like as Swiggy. “At the end of the day, customer rating takes care of everything,” he explained. Swiggy and Zomato fulfil around 70% of its orders, while its own delivery network fulfils the other 30%. It anticipates its own network to be 40% complete by the end of 2024.
