Feature

Rebel’s Guide To Success With Food

Having started its journey in 2004 as a quick-service restaurant under the brand name Faasos, Rebel Foods, now a unicorn, aims to expand its footprint. Jaydeep Barman, co-founder of Rebel Foods, talks to Vinita Bhatia about the company’s growth plans, focusing on Tier-II and -III cities, licensing as a strategy and more. Edited excerpts: 

How has your life changed after Rebel Foods entered the unicorn club in 2021?

For Rebel Foods, the focus has been primarily on the customers and how we could build delightful food brands for them. The focus was to create a company that was loved en masse, more than valuations. The focus was on solving more and more food missions, creating value along the way.

Rebel Foods boasts strong backing from a diverse group of prominent investors both in India and globally, including Peak XV Partners (ex-Sequoia Capital), Qatar Investment Authority, Coatue, Goldman Sachs, Evolvence, RPT Global and Lightbox. Their unwavering support underscores our dedication to achieving success and driving growth within the industry.

So, to answer the question—has life changed after becoming a unicorn—no. The focus has continued to be laser-like, and therefore, every move, whether operational, tactical or strategic, has been towards creating value and customer delight.

When is Rebel Foods considering going public?

While I would love to delve into this at the moment, to be honest, this is a work in progress. Can I say we are looking at going public? Yes. Would I be able to put a timeline to it at this point in time? I would rather not, as we are working on the planning, and sharing a timeline would be a little premature.

How is Rebel Foods prepared to deal with slowdown in the pandemic-induced growth in the cloud kitchen industry as more customers prefer to dine in than order out?

We are in the business of building food brands and, as long as our brands are well-loved, we will have customers ordering for them. Our growth rates have continued to be healthy post-pandemic.

During the pandemic, people stayed at home and ordered in; office orders were a bare minimum. Post-pandemic, lots of people returned to offices, and our office orders have started growing significantly.

Also, the pandemic brought a massive number of new customers on delivery. As a result, the overall food delivery market continues to grow at 20–25%, and our brands are more well-known than ever. So, we continue to grow healthily even post-pandemic.

Which brands are part of your cloud kitchen portfolio currently? What are the upcoming additions?

Overall, we run eight brands—Behrouz Biryani, Oven Story Pizza, Faasos Wraps, Lunchbox Meals, Good Bowl, Sweet Truth Desserts, Wendy’s Burger and Smoor Chocolate (we own over 50% of this premium brand). There are other smaller brands that are in the growing stage.

How is the company planning to lower its losses and break even?

We have been growing at 20–50% over the past few years. We are not in a position to divulge future projections at this point.

We witnessed favourable progress in our businesses across regions post-Covid. In the past few quarters, we worked towards solidifying our position in the market and have made investments to support our vision. We have been carefully investing in acquiring brands, reaching new customers, improving technology, building our own D2C [direct-to-consumer] channel and strengthening our Rebel Operating System (OS). In addition to growth-related investments, our unit economics have also improved over time. With our momentum and the opportunities we see, we feel that we are progressing in the right direction with profitable growth.

Why did Rebel Foods decide to create its own tech platform?

Our third lightbulb moment came in 2019—the first two were the launch of a delivery-only kitchen model and the creation of individual brands under Rebel Foods—where the unique combination of culinary innovations and technology transformed our network into an OS. Initially, we opened the platform for new brands to launch and scale nationally. But then we started getting inbound queries from established brands, especially during the pandemic, wanting to expand their network riding on our kitchen footprint and the Rebel OS.

Today, we have three sub-sets of Rebel Launcher. The first is Accelerator, which is a platform for new brands with immense potential. Entrepreneurs building food brands can scale across India using our technology, culinary innovation and supply chain.

The second is Platform Service, where we partner with established brands so they can use our platform in regions where they currently do not have a presence. This could include new cities, new locations in existing cities and, in some cases, even international destinations. Some of these brands include Naturals Ice Cream, Mad Over Donuts, UpSouth, Zomoz and Anand Sweets.

The third is licensing. In this model, we obtain the licensing rights of an established brand and scale it ourselves. Following a six-month, five-kitchen pilot, we now have the exclusive cloud-kitchen licence in India for Wendy’s, the world’s third-largest burger brand. This is a massive vindication of the system we have built with respect to quality, safety, hygiene, world-class processes and supply chain. We believe we are now poised to license many of the world’s most renowned brands and bring them to India and other parts of the world.

How is your EatSure Food-Court app fuelling this growth? Are you planning to roll out any other tech solutions that will help meet your business goals?

We have traditionally focused on innovation as the key to our growth. This could be a delivery mechanism during Covid-19.

If you see, the food industry has not evolved the way entertainment has with Netflix, or ecommerce has with Amazon or personal technology with Apple. Rebel Foods has attempted, first with multi-brand cloud kitchens and now with multi-brand single-app, to evolve the category and innovate on the status quo.

EatSure has become a food court on an app for a vast array of customers across multiple cities in India. We will continue to focus on technological solutions that make the customers’ journey and experience one of delight and love.

Additionally, our expansion into offline food courts, starting with Pune and now totalling seven locations, highlights our commitment to meeting consumer demand and staying ahead of our peers. The positive response from consumers, with over 10 million app downloads and a 4.3-star rating, reflects our efforts to deliver value and convenience through our tech-driven solutions.

What is Rebel Foods’ footprint, in terms of brands and presence, in India and globally? What are the company’s plans to scale up operations?

We are present in 75 cities across India, West Asia and the United Kingdom with over 450 kitchens. Each kitchen runs 10–15 brands depending on the location.

We believe we have many decades of growth in front of us, including newer cities and countries. It is difficult to state a number, but we aim to scale our network to over 1,000 locations in the next few years.

How does the company plan to leverage franchising as a business model to achieve this?

Leveraging franchising as a pivotal strategy, we hope to expand Rebel Foods' offline presence and grow our flagship brand Oven Story Pizza. With plans to open 250–300 outlets over the next two to three years, we are committed to establishing Oven Story Pizza as a market leader in India’s rapidly evolving pizza segment, competing with global chains.

The franchising model aligns with our current objectives to help Oven Story Pizza’s expansion while assisting developing a community of entrepreneurs. By focusing on Tier-II and -III markets, we hope to build on substantial untapped opportunities driven by increasing disposable incomes and a growing preference for national food brands. We believe that our franchise partners can achieve profitability in these markets, given the lower real estate costs and rising consumer demand.

What are some of the challenges and opportunities of operating a network of cloud kitchens and digital brands?

Operating a network of cloud kitchens and digital brands poses its fair share of opportunities and challenges, both in India and globally. One of the hurdles we have faced is navigating the high costs associated with rentals on prime high streets.

However, through strategic adaptation and leveraging technology such as Rebel OS, we have managed to mitigate these challenges and enhance operational efficiency, leading to improved profitability. Additionally, understanding and aligning our product offerings with evolving customer preferences has been a learning curve.

Do local chains or smaller brands pose a challenge to Rebel Foods?

We strongly believe that competition is healthy. It encourages innovation and keeps us on our toes, pushing us to continually evolve and challenge ourselves. Each of our brands operates in distinct categories, and we recognise that healthy competition motivates us to innovate further.

To address any challenges posed by emerging competitors, we remain committed to our core values of continuous innovation and operational excellence. We actively seek opportunities for partnerships with local entities, implement localised marketing strategies and focus on customer delight. By prioritising customer satisfaction and maintaining high standards of quality, we are confident in our ability to maintain our competitive edge and sustain growth in the face of evolving market dynamics.