Interview Times had a great chance to had a conversation with Mr. Loveneet, the founder of Outlet Buddy, and got to know more insights into the food industry in 2020. Moreover, he gave us more insights into the concept of Cloud Kitchen. This is how the interview went-
How did Outlet buddy start, the story behind it, and the Journey so far? How did you get the concept of a cloud kitchen?
As a concept, Outlet Buddy began in 2018; at this point, we had worked in the Food business for a good six years. While working in the corporate sector, we had perfected the art of food production as a team. In 2018, during some events, we
got an opportunity to work with food trucks, which prompted us to look deeper into this proposition.
We immediately noticed better margins for our partners and us, and to prove this concept, we started working with some restaurants giving them dishes 90% done- according to their menu. The journey so far has been incredible; we have gotten some early adopters for our proposition, while the Pandemic COVID 19 has brought all businesses on their
knees, we have seen clear traction for our concept.
We are serving an average of 700 Skus/Dishes per day to 5 different Brands across four cuisines. The Cloud kitchen concept is not new to the Indian market; many players ventured into this space as early as 2010-2012; we have positioned ourselves as a Back-end solution provider plugged into this Cloud kitchen Universe of Discourse.
Kindly shed light on your entrepreneurial journey. What were the initial challenges while launching outlet buddy, and how did you counter the same?
Our entrepreneurial journey has been bumpy like any other start-up’s; we have seen the lows and the extreme lows during this journey. We are hoping that the advent of 2021 will bring the expected traction to the entire space. We faced many challenges, initially. The most potent challenge that we faced and which we continue to encounter is to convince the Restaurants & Cloud kitchens to use us as their back-end partner since it’s challenging to disengage a live kitchen from a Restaurant.
The restaurants found it very difficult to accept their Live kitchens, now reduced to merely a pantry where they assembled and did the Last-mile cooking for their customers. We countered these challenges by using a plain old method of Unit economics, i.e., increasing their Net Profit.
What makes outlet buddy so different? Highlight the innovative differentiating factors involved and services offered.
Outlet buddy does not target to be different; its very nature caters to similarities. Food businesses across the board work on similar problems- shallow margins, inconsistent Taste, and high customer acquisition cost. According to us, all restaurants have similar woes, and it’s these woes that we intend to target.
We imagine Outlet Buddy as a “Buddy” who does all the kitchen mise-en-place for the restaurant- before he/she enters the kitchen and does the final plating for the guest. We call our relationship with our Merchants an “Infinity Circle, “We hope to work hard to stay a part of that circle. Outlet Buddy is your online kitchen- which works according to your business- all you have to do is get on board.
What is your assessment of the Cloud Kitchen in India? According to you, what are the factors propelling the growth in this segment?
Cloud kitchen is assessed approximately USD 70-80 billion business worldwide by2027, and approximately business of USD 4-5 Billion of that amount will come from India alone. Our assessment of the Cloud kitchen space is no different from any Food business unit.
Factors according to us that will affect the growth in this segment are:-
1) Cloud kitchen real estate companies like Kitchen Plus- entering the space, will propel the early adoption of the space
2) Price parity in advanced Food preparation technologies/equipment will encourage the use of that equipment, which will further help in standardization.
3) Sophisticated and Secured payment processing technologies
4) Advancement and adoption in Technologies such as AI and IoT for order processing and Logistics
5) Further Internet penetration and into tier-2 and tier-3 cities will propel the growth in a big way.
6) New and innovative Fusion cuisines from different countries will also encourage further long-tail penetration
Tell us about the current business development and going forward, what are the plans to scale up the business? Tell us about your growth plans?
We are serving the Delhi NCR region right now; we aim to set up Commissary hubs in big cities’ key locations. like Mumbai, Bangalore, Hyderabad, Chennai, Calcutta, Indore, and from there, we intend to spread ourselves into tier-2 and tier-3 cities as a plan.
How has been the impact of Co-Vid 19 on your business?
Yes, there is an overall grimness across the board, and people prefer to eat at home resulting in a substantial dip in the frequency of ordering out per week.
The pandemic has affected the consumer’s overall mood, but consumption patterns haven’t changed to a large extent. However, we are still eating our favorite- Biryani, Kebabs, Pizzas, Golgappe, and Bhature Chole like we used to eat.
What are the new developments amid the pandemic and what kind of changes had to be executed in the response to it?
The Food brand owners/ Cloud Kitchen in General amidst the pandemic had to change their approach from being a Dark kitchen to a more customer-centric kitchen.
Some of the changes that were brought in the Kitchens:-
1) Temperature recording every few hours and relayed to the customer
2) Hand sanitization SOPs displayed on websites, Instagram pages, and Facebook pages
3) Cleanliness and Hygiene SOPs
4) Regular disinfectant sprays Checklist
5) Employee Safety Checklist ( Masks, Face Shield, etc.)