Behind the scenes: How food delivery is carving a new path for food owners
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Investment 2016-10-24

Behind the scenes: How food delivery is carving a new path for food owners

Delivery businesses may look as a lucrative space because of the attention it has gained in last two years from the investor’s diaspora.

By Deputy Features Editor
Behind the scenes: How food delivery is carving a new path for food owners

Food trends in India are continuously changing with change in eating habits of the ever demanding consumers and the new concepts heating up the million dollar food service industry. From going to a restaurant over dinner or lunch, people today look out for delivery and getting their favourite food delivered to their doorstep. Seeking this opportunity not only the aggregators or delivery players who started this trend is betting big on this model but restaurants and food players are also eyeing this as the next ground to invest in.

Why Delivery?

For us our biz delivery is an opportunity to cater to a biz or customer for different needs. QSR remains a fast turnaround business and this business depends on quick service, shares Tanmay Kumar, CFO, Burger King India which has 15 per cent of the businesses coming from online ordering. For brands like Burger King and other players in the same space the key to their successes remain high traffic zone that’s how the biz is constructed. Now that many people want their food at their offices or home at ease, this is an opportunity which the QSR is leveraging and therefore for a QSR it’s an add on and additional opportunity as compared to the core biz.

Similarly, Raymond Andrews, Founder- Biryani Blues who started 3 years back serving the Hyderabadi Biryani wanted to take on the market- the office market where finger food was only options in meetings and team gathering. “We knew that this segment was available for the product and Biryani could be the easiest as it is non messy. It also reaches fast and that’s how we started. We are now about 10 stores in Delhi-NCR,” says Andrews who has 65 per cent of his businesses coming from delivery.

Likewise, InnerChef- a kitchen in the cloud kind of model has 100 per cent of the business coming from delivery either serves its foods or work as an aggregator by partnering with home chefs in the region. “When I set up my kitchen I do not look for a high traffic space ppaying the 1/10 of the space all restaurants are looking for and therefore I can use the full space for kitchens, larger space do more products and pass on efficiency to consumers and therefore we become more cost effective when I deliver the product to consumers,” adds Rajesh Sawhney, Co-Founder- Innerchef

The start-up also aggregate hyper locally especially in the category of home chefs. “80 per cent our biz is ours food and 20 per cent is the home chefs,” adds Sawhney.

Challenges involved

Delivery businesses may look as a lucrative space because of the attention it has gained in last two years from the investor’s diasporas, but apart from the glittery side the business involve lots of challenges both in the front and back end. Riding on logistic, the segment needs lots of backend support. As of now there is no delivery structure. There are few hyperlocal players and delivery aggregators doing deliveries for restaurants but, unfortunately the restaurant peaks happens on the same day and on the same time for all restaurants. Hence, the issue remains with the peak time orders and deliveries.

“In India Infrastructure is not ready and none of the POS are ready to integrate with this technology and it’s not seamless and the ecosystem is not evolved and other is the cost as there is very low margin,” points Andrews who is focusing on building Biryani Blues a delivery chain. “While we have backend in place, we keep on building restaurant. We continue to focus on mobile app, push deliveries,” adds Andrews.

The other Challenges which a brand or the restaurant faces is the convenience of the food delivered fresh with no error in the bill. Generally food is consumed differently with the type of offering one has. Large part of consumption tends to happened during certain part of the day. Therefore, the whole challenge is to get the right economics. “Quick delivery, good service and fresh food is what customers look for,” adds Kumar.

And, we can say that as a trend it’s an evolution and all restaurant biz is going through the exciting phase of the aggregators. It’s all about the right metrics!

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