THE DIGITAL REVOLUTION CONQUERS THE FOOD BUSINESS. FINALLY.
HERE'S HOW
Like all things 2020, the Coronavirus Pandemic accelerated another digital trend which was slowly building up prior to the lockdown: Virtual Restaurants. In a nutshell, Virtual Restaurants are digital only brands which have no physical dine ins or Quick takeout facilities. They are simply "brands" which are serviced by one or all of the many food delivery startups popping across the globe (like GrubHub in the USA or Zomato in India). Yeah you read that right, they are a baby of the new food delivery boom.
The catch here is this model is that 3-15 brands are prepared within one kitchen (technically known as cloud kitchen because a ton of different stuff is made only for delivery) under one roof. Clouds Kitchens have rigid branding, unlike Virtual Restaurants & are usually opened by aggregators like Zomato. Many experts of the foodtech industry believe such virtual brands can act as a real moneymaker for food delivery startups. The notion is that if a bulk of orders are received from one place, these cloud kitchens can be strategically placed in the city thereby reducing travel cost & simultaneously achieving economies of scale. Some other business advantages of the Virtual Restaurant model are:
Simply put, the owner can maximize better output & cater to more people if dine-in is canceled. The extra expense on maintaining ambience & a hefty staff is also removed. Admittedly, the kitchen s somewhat transformed to a factory with the onus shifting on per unit cost & preparation time.
Virtual Brands can unlock the power of famous celebs! Who wouldn't order a dish of Hyderabadi Biryani endorsed by Sania Mirza or a health conscious pasta shown by Shilpa Shetty on Instagram! The potential is humongous for both restaurant owners & delivery startups. Remember, restaurant name & dish name can be changed as per the whim of the owner as these brands are virtual only!
Another advantage is that data analytics can be used to judge consumer behavior and accordingly make changes on the menu. For example, if the residents of Delhi crave Chicken Tandoori at Sunday nights, the same can pop up on delivery apps through Virtual Restaurants who are ready to prepare them en masse.
Virtual Restaurants make the food industry a less capital intensive business as backend cloud kitchens don't demand top class prime locations. Hence, the industry becomes appealing to many aspirational entrepreneurs. A whole new vertical can be created in food craving India!
In India, a company called Rebel Foods has exploded & really thrived on this model. During this year's IPL, you might have seen an advert of Behrouz Biryani. It is one of the many virtual restaurants operated by Rebel foods, pan India!
So, that's me done for the day. Do you think Virtual Restaurants are here to stay or are they just a Covid fad? Let us know!
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