<![CDATA[In India's cloud kitchens, dreams of a healthy-eating unicorn]>

Cure.fit, an integrated platform for food, fitness and meditation, is among a handful of market disrupters offering meals prepared in "cloud kitchens" " a concept where food is cooked in a centralised facility with no dine-in option, and then delivered to customers, including those in remote areas.

The Bangalore-based firm, which has dozens of cloud kitchens across five cities, delivers over 40,000 freshly prepared meals a day to health-conscious millennials. Menu items are varied in terms of cuisine, calorie levels and dietary preferences, including high-protein, high-fibre, or vegan takes on Indian dishes like biryani. Cure.fit also offers healthy snacks such as cold-pressed juices, quinoa crisps and trail mixes.

Just three years young, the app's latest round of funding in May placed its worth at US$500 million, and some pundits are tipping it to become India's next unicorn.

Cure.fit has dozens of cloud kitchens across five cities in India. Photo: Facebook alt=Cure.fit has dozens of cloud kitchens across five cities in India. Photo: Facebook

Amid its tremendous growth, cure.fit plans to expand its range of healthy offerings, which includes gym plans and mental wellness programmes. It even opened a physical outlet in Bangalore last October.

But offering nutritious food from its cloud kitchens, under its eat.fit food-delivery arm, remains central to cure.fit's operations.

Founder Ankit Nagori is setting his sights on India's overall food-delivery market, which is worth an estimated US$15 billion, according to the government-linked Indian Brand Equity Foundation.

"Major challenges we expect are during scaling, to maintain the same quality standards and experience that our customers love and look forward to," Nagori says.

"We spend time and effort to ensure the same bold and energetic designs, variety in the menu, and efficient delivery systems are present across all eat.fit kitchens."

Cure.fit delivers some 40,000 meals to its customers every day. Photo: Facebook alt=Cure.fit delivers some 40,000 meals to its customers every day. Photo: Facebook

The rise of cloud kitchens " also known as ghost kitchens, virtual kitchens or dark kitchens " in India has occurred alongside the growth in internet-first restaurants.

Figures by market research firm Tracxn show that investments in such establishments in India have shot up from US$2.63 million in 2014 to nearly US$300 million in the first half of this year alone.

Industry estimates suggest that 80 million food orders are placed each month by 15 million customers from over 500 cities.

A user ordering food on eat.fit's app. Photo: Facebook alt=A user ordering food on eat.fit's app. Photo: Facebook

Nagori says part of the appeal of cloud kitchens for food providers is the low start-up capital needed to enter the country's market of 1.3 billion people.

"For a market like India, where the food business is booming, cloud kitchens are the most convenient set-up for the first-time restaurateur " low upfront costs and a low-risk environment that ensures the chef can focus on the food," Nagori says.

Running such a business also requires less space, meaning operators save on rent " which traditionally makes up the lion's share of the costs to run a bricks-and-mortar restaurant.

"Investment in a cloud kitchen is just one-fourth of what goes into setting up a fine-dining restaurant, as you save costs from real estate, interiors and manpower," says Pawan Raj Kumar, co-founder of comfort food brand Hoi Foods.

"Technology is our key to solving all operational challenges at a scale, unlike local restaurants," Box8's co-founder Amit Raj says, adding that the company offers a superior experience, thanks to its "full stack" approach.

Box8 delivery staff in Mumbai, India. Photo: Facebook alt=Box8 delivery staff in Mumbai, India. Photo: Facebook

The cloud-kitchen model also allows food-tech businesses to set up multiple brands in the same kitchen, giving consumers many options on one platform.

Ajit Joshi, a software engineer in Bangalore, says such services have exposed him to diverse cuisines.

"I get to try a variety of cuisines, whether Burmese, Chinese or Vietnamese, through these online platforms. My helper can't cook all these," he says. "I found many speciality restaurants in my neighbourhood, through the delivery sites, which I was not aware of before."

Mumbai-based Rebel Foods is one such operator. The firm, which calls itself the world's largest internet-restaurant company, offers food from at least a dozen brands serving various cuisines to suit Indian palates.

Helmed by former McKinsey consultant Jaydeep Barman, Rebel Foods aims to expand its services in Southeast Asia and the Middle East in partnership with Indonesia's Gojek, according to a recent Bloomberg report.

India's food-delivery market is worth about US$15 billion. Photo: AP alt=India's food-delivery market is worth about US$15 billion. Photo: AP

As food-delivery operators target growth across the country, they are placing their bets on areas beyond the metros. Thanks to surging internet penetration, cheap data, busy lifestyles and rising disposable incomes, platforms such as Zomato, the home-grown Swiggy, and UberEats have been rapidly widening their coverage to include even far-flung places.

Data from research firm Redseer Consulting indicates that in India " a complex market home to consumers with various levels of spending power " food-tech expansions in non-urban areas have grown nearly seven times faster than in cosmopolitan centres.

The industry's rise has also resulted in a 20-fold increase in food-delivery workers, from 25,000 such employees in 2016 to some 500,000 this year.

"The growth of the food-delivery business has been explosive in the last three to four years," says Rohan Agarwal, engagement manager at Redseer, adding that there has been a particular spike last year and the first half of this year.

Agarwal says many cities lack access to restaurants offering good food and diverse cuisines, prompting food aggregators to fill in the gaps with cloud kitchens.

"There are very few restaurants and even among them only a few pass muster serving high-quality food and a variety of cuisines," Agarwal says. "What has happened in the past months is that the aggregators have attempted to close out such supply gaps using the cloud-kitchen model."

Kumar, co-founder of Hoi Foods, says internet-first companies help to broaden access to better products. "People generally want more convenience," he says, likening the experience of ordering food deliveries to watching films at home, instead of having to go out to a movie hall.

But the arrival of digital businesses in India's food industry has left conventional restaurants struggling to cope.

Food-delivery aggregators can offer discounts of up to 50 per cent, forcing traditional businesses to match the perks, although some admit the services have helped to boost footfall and revenue in recent years.

Still, more than 3,000 conventional restaurants belonging to the National Restaurant Association of India (NRIA) recently decided to log out of platforms such as Zomato and other aggregators to protest against predatory industry practices.

"We are not against the technology platforms. Our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour " commercially and in forming the terms of engagement," says NRIA's chief of Mumbai Chapter, Anurag Katriar. The association is engaging in talks with aggregators to iron out the issues.

Nevertheless, cloud kitchens and food-delivery services look set to continue on a path of "explosive" growth, underscored by low entry costs, ambitious entrepreneurs, risk-taking venture capitalists and an enticing market of 1.3 billion consumers.

This article originally appeared on the South China Morning Post (SCMP).

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