Cloud kitchen are a completely different game: Abhijit Mukherjee
Restaurant consultant and F&B expert speaks about the uniqueness of the cloud format of business and his foray into it.
Anirudh Singhal, Prasanjit Singh, and Abhijit Mukherjee, co-founders of shackhood.com at their cloud kitchen in Gurugram.
The cloud or ghost kitchen format of the restaurant business is really very different from the traditional brick and mortar version, and if people think that they can have a smooth transition into it, they're in for a few surprises. This is one of the learnings that came out of ET HospitalityWorld's chat with Abhijit Mukherjee.
Mukherjee, who was part of the team which launched restaurants while working DLF, later co-founded Studio Gourmet Services along with Prasanjit Singh. Our chat with him centred around the launch of Asian Farmshack, a cloud kitchen delivery service, which Mukherjee and Singh have co-founded with Anirudh Singhal—a former colleague of theirs at DLF and founder of Speedx prefabricated bars.
"All of us are in a guesswork game right now because each state is behaving differently on a Monday than no Sunday and I'm talking purely about the regulations which drive us. Earlier people were reacting to the industry saying, let's hold on and see how this thing is shaping up." Mukherjee said when asked about the state of the food and beverage industry in India.
With most of their business planning pushed back by clients to later quarters, the duo found work was drying up, so they thought the way forward was to view home delivery as not just an extension of the restaurant business, but as a separate vertical altogether, to give it a chance to be successful, he added.
"After I have worked and invested in this company in cloud kitchens, the first fallacy of mine which has was disproved was—if I had a brick and mortar business, I could have printed the same menu and put it on an app overnight, I would have become a home delivery business," he said.
Many people still feel the same menu printed in a home delivery format for a customer becomes home delivery. That is not the scenario. Mukherjee discovered that they needed to curate something for the delivery business, because the same formula didn't apply here.
"When the going gets tough people say save more. But there is a chance to try something which is now a reality, which has an intrinsic promise to convert into something of value someday," he added.
First they began by talking to various hotels, who, although they were pretty upbeat, didn't know how to start and more importantly didn't have the inclination to invest in the business.
So, the trio of Mukherjee, Singh and Singhal came together and used their own funds, around INR 25 lakh to begin their first cloud kitchen.
Food on the list of priorities in the cloud kitchen business is at number four, because the first three points are technology, CAC which is customer acquisition cost, and online penetration and conversion, Mukherjee said.
"Prasanjit and I came together and said okay, let's invest. Anirudh (Singhal) has been driving this project full throttle. In our business, investment is only one part of the story. The whole idea is about being hundred percent involved for the first hundred days. You draw out a strategy post hundred days later—right now it's about focusing on the first hundred operating days for each brand," he added.
They launched a concept which is a multi-brand cloud and have a 500 square foot cloud kitchen right now in DLF City Core.
"We had three options but this one although it was about INR 15,000 extra rental, was giving me a better technological GPS reach because my delivery partners work on geotagging so they deliver only up to down 10 kilometers. The beauty of the cloud kitchen format is the game changes every eight kilometers," Mukherjee said.
One of the wonderful things about the business was its flexibility.
"I'm a three brand cloud kitchen which are A, B and C. If after three months I feel one has to go A, B, or C will go and one might be replaced by D. That's the beauty unlike a brick and mortar when I'm sold to a certain thing and fixed costs are much higher. Here, all I have to continuously think is how well I am linked to technology; how well I am linked to my customer; what's my reach and how well I am reaching a person's palm (device)," Mukherjee explained.
The three brands which are part of the ghost kitchen are Asian Farm Shack—serving a broad gamut of Asian food which has already launched, with their second offering, Masala Shack—the Indian food vertical going through the birthing pains and soon to hit the market. The third brand is called Shack Bites and is focussed on snacks for in between meals and to have drinks with things like tacos and burgers and stretching to anda parathas and momos.
Shackhood.com's first cloud kitchen.
The USP of the Asian brand is their sourcing according to Mukherjee who has tied up with three farms for best produce and while input costs may be higher, he says customers are happy to pay premium prices.
The Indian food brand will feature tie ups with East Indian dishes from Mumbai as well as unique dishes from South India, thanks to tie-ups with experts from the region, he added.
"We have two other brands which are currently in the rnd stage, one is Party Shack which will basically sell the food available on all these brands at certain portion sizes, by the kilo or platter. The last vertical is called Kebab Shack and the way we want to do it is in a way that people can order kebabs with side dishes, like they do steaks, as a meal in itself," he explained.
While they are still holding their horses until the completion of the first 100 days of operations, there are feelers being sent to look for kitchens in Saket and Greater Kailash, by way of expanding their reach, Mukherjee added.
studio gourmet services
restaurant business
ghost kitchen format
dlf city core