By an internet restaurant company, we mean Rebel Foods creates and builds delivery-only food brands and cuisines, but on the internet.
With over 3000+ internet restaurants, 320+ cloud kitchens across 3 countries with a presence in 35 cities in India, Rebel Foods runs the largest chain of internet restaurants across the world. With a project that started out was a fast-food roll joint, this company, incorporated in 2011, is now backed by investors such as Goldman Sachs, Sequoia, and Go-Jek, amongst others. Even though Rebel has its own app, it generates approximately 60% of its business via food aggregators such as Zomato and Swiggy.
1 company = 11 food brands
Unbeknownst to you, you would have already ordered food from this company and wouldn’t have realized it! Does any brand amongst the following ring a (Pavlov’s) bell? Faasos, Oven Story, Firangi Bake, Mandarin Oak, Behrouz Biryani, Lunch Box, Sweet Truth, The Good Bowl, Navarasam, The Biryani Life, and Slay Everyday! We know, right?!
While a traditional restaurant in India takes about 10-15 years to scale up to 100 locations for a brand, Rebel Foods takes about 18 months. Here’s how they do it: Cloud Kitchen.
A cloud kitchen does not offer a dine-in facility and accepts food orders only through an online ordering system. The company does not operate any physical restaurant, which helps them build digital food brands that they can scale on the go. Once a kitchen is made, they produce multiple restaurant brands from that location. Given there is no association between the brands and the location, they create different cuisine brands without ever having to change anything.
The cloud kitchens are also why the company can continue serving its customers in the wake of the pandemic and the unintended effects of the nationwide lockdown.
The success in this model lies in the fact that the company is now receiving a tremendous amount of interest from hotels and restaurant chains globally for its cloud kitchen model. These restaurants kitchens remain empty throughout the day, allowing the company to forge partnerships in Saudi Arabia, UAE, and Southeast Asia.
The economics of the company shows that they’re in it for the long haul! Take a look for yourself.
Spilling their (not-so-secret-anymore) sauce!
Take the example of Behrouz Biryani and The Biryani Life. Rebel knows how to appease its customers per their food tastes by offering the same product in different sized and price combinations. Rebel’s Behrouz Biryani (Priced at INR 700/- for two people) competes with Biryani By Kilo and Biryani Blues (Priced at INR 650/- for two people). At the same time, you also have Rebel’s The Biryani Life (Priced at INR 350/- for two people) that caters to a different market segment. However, here’s the catch, Rebel coverage stands at 35 cities while its competitors stand at less than 20 cities.
You have Rebel’s scale of growth, which allows them to play across all customer palettes through the same network of cloud kitchen. With such a strategy, in just 18 months, Rebel built India’s only national Biryani brand – Behrouz, on top of Faasos, their first brand.
Now imagine extending this to other cuisines such as Pizza, World Cuisine, Desserts, Beverages, and Chinese.
Trading real estate for cost savings
While every restaurant business (or any offline business) have just one chant of “Location, Location, Location,” everyone ends up eyeing the same location. In a country like India, with a shortage of quality real estate, the rent becomes the highest in the word! Simple, supply-demand. This leads to brands sometimes flushing our rentals worth a month of their revenue. With the considerable long lease, locations can undergo a flux anytime owing to a flyover, a mall, or even changing traffic patterns.
By removing real estate out of the equation, Rebel already wins this game. Their industrial kitchens are rented in places where the landlords struggle to rent, getting them a great deal at lower rentals. Relative to the restaurant industry norms, our rent expense is the lowest by 3–5x the market.
This internet company reacts to any food trend very quickly and thrives on delighting its customers. In 2011, Faasos, by introducing tweet-2-order with #faasosnow, became one of the world’s few food-on-demand restaurants. Faasos’s loyalty program, Faasos Elite, rewards its regular customers. The rewards range from prioritized delivery, free desserts with their order, an option pay later, a birthday gift, a cashback with their every order, and the likes. The pandemic has caused the brand to replace free desserts with free masks and a customer’s order. Customer centricity imbibed within the company, indeed!
Rebel food strongly believes in feedback and iteration, primarily through customer insights. Before launching a new brand or a product, Rebel tests it in a few kitchens, followed by including them on distribution channels and soliciting continuous feedback until they get both the product recipe and economics right. Once they receive strong customer feedback, they scale it to the other kitchens.
Take the case of Oven Story, their pizza brand, which was launched in 2017. Driven by consumer insights, when consumers were asked to name the first thing that came to mind after hearing, pizza, a majority replied with cheese. Rebel took the first-mover advantage and played on this by launching four variants. In just 3 years, they clocked ₹105 crores and became the third biggest brand within the company while owning the country’s pizza space!
Rebel is now focusing more on healthy foods in the wake of the pandemic, apart from following strict safety and hygiene protocols. With the lockdown leading to increased instances of cabin fever, Rebel has launched the “The 500 Calorie Project” brand. Under this, customers are provided with personalized diet plans, diet consultation, weekly and monthly meal plans, and nutrition counseling.
Update: Faasos app is now rebranded as Eat Sure.
Rebel Foods thrives even though its concept isn’t proprietary. Not every company can churn out multiple brands, scale them across a country while maintaining high quality and consistency, and their numbers prove it!Tweet
Credits: Rebel Foods Website