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Lite Bite Foods set to invest in cloud kitchens

Saturday, July 4, 2020, 10:14 Hrs  [IST]
HBI Staff | Hyderabad

According to Mint, food and beverage retail company Lite Bite Foods that runs various casual and fine-dine restaurant formats has stepped up plans to open over 35 cloud kitchens in five cities as uncertainty looms large over the fate of physical restaurants, prompting companies to create new revenue streams and service demand for online food orders.

“It was always in the plans, but it has accelerated now, we had put together the team pre-COVID and the back end work had started," Rohit Aggarwal, Director Lite Bite Foods (LBF) said in an interview.

The company will invest INR 25 crore in creating its cloud kitchen infrastructure under LBF Cloud Kitchens, said Aggarwal. In all, each cloud kitchen with be built with an investment of INR 75 lakh. The first kitchen is set to go live in August starting with Delhi.

The company, that has over 200 restaurants in India spread across malls, high streets, airports under Punjab Grill, TRES, You Mee, The Artful Baker, Zambar, Street foods by Punjab grill, Asia seven express will gradually build more cloud kitchens in Mumbai, Pune, Hyderabad and Bengaluru.

The kitchens will be used to expand the reach of its existing brands as well as introduce new cuisines and meals that are popular among diners who order food at home.

It will set up two formats—a hybrid kitchen format and QSR focused kitchens.

The former will offer the company’s more upmarket dining brands such as north Indian food under Punjab Grill, European cuisine from Tres, Asian meals from YouMee, and service South Indian food from Zambar. While the QSR focused kitchens will sell an assortment of mass-market brands such as Street foods by Punjab Grill, Asia Seven Express, Zambar Tiffins, Rolls & Parathas, and Meal-in-a-Bowl.

The online food delivery segment in India is set to grow at around 12% annually, said Aggarwal, with covid-19 accelerating the consumer shift to online ordering.

“The current scenario will give it a boost. We are investing approximately INR 25 crore in LBF Cloud Kitchens and are targeting at a turnover of INR 100 crore in the next 3 years," he said.

LBF will soon launch its own food app 'FOOGO' which will allow consumers to order food from across the company's food formats.

COVID-19 and the subsequent lockdowns have thrown a spanner in the restaurant business.

Now, even as businesses have resumed, a spike in cases is preventing people from stepping out. Moreover, restaurants are also working under restrictions with the number of diners capped and limited timings.

As a result, restaurants are looking at alternate revenue streams. More companies and restaurant owners are investing in cloud kitchens and delivery-only brands.

“This is the future," said Aggarwal, adding that over the years, the cost of opening and running a restaurant has inched up, prompting the company to switch focus to a low-overhead, tech-enabled model.

“We will not be investing in malls or high streets given the current scenario. But we need to enhance our presence in the market, and work for the future, the future will definitely be more of this (cloud kitchen) than the other," he said.

However, restaurant owners reckon that online orders will not fully substitute dine-ins and that the restaurant business will eventually need to go back to pre-covid times.

For some restaurants that rely on a steady footfalls, online orders are still less than 10% of their business.

Aggarwal added that covid-induced restrictions have helped inch this up to 15-20%, “but that’s all we have as dining remains largely restricted".

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