Rebel Foods' Recipe for Success!

Hey there,

Faasos, Behrouz Biryani, Oven Story, Smoor, Wendy’s, and 25+ other brands.

Do they all belong to a single parent company? YES or NO 🤔

Rebel Foods, known as the world's largest chain of online restaurants, was started in Pune, initially selling rolls. However, the founders soon realized that relying solely on rolls might not be the winning formula they had hoped for.

And, a deep dive into their data yielded a surprising fact: more than 70% of their customers had never set foot in their physical outlets.

This insight led to the innovative idea—to create a food company without any physical presence - no waitstaff, no tables, and no chairs.

With this strategy, Rebel Foods achieved unicorn status at a time when many other restaurants were struggling. In their FY 23 report, they filed revenues exceeding 1000 Crores.

However, alongside their impressive top-line, Rebel Foods reported expenses exceeding 1800 Crores. This is a matter of concern, especially for a house of brands with 12 years of experience in a lucrative market.

They faced several challenges:

• Limited success beyond a few Biryani and Pizza brands.

• Intense competition from small, cost-efficient startups.

• Heavy reliance on Swiggy and Zomato.

So, here's Rebel Foods' latest strategy to turn profitable:

1. Going Offline (Again)

Rebel Foods has ventured into offline spaces. They've launched a 3,000-square-foot food court in Pune, featuring offerings from over 45 Rebel brands and partner brands.

They plan to establish 100 such food courts across India by the end of 2024.

2. Diversifying and Managing Existing Restaurants:

They've partnered with the world's third-largest burger chain, ranking just behind McDonald’s and Burger King.

Since 2020, Rebel has been overseeing cloud kitchens for Wendy’s in India, a brand that has struggled to make its mark in the country for eight years.

In February, they expanded their partnership to full operational control.

Additionally, Rebel Foods has been investing in established restaurant chains, acquiring the chocolate brand Smoor and acquiring stakes in Biryani Blues, Zomoz, and Slay Coffee.

3. International Expansion:

Rebel Foods is setting its sights on the Saudi market, with ambitions to establish a $100 Mn food delivery business within 3 years.

They plan to launch 60 new stores in cities like Jeddah, Dammam, and Khobar. For this expansion, they've partnered with KitchenPark and Kitch in Dubai.

In summary, Rebel Foods’ story outlines the dynamic nature of startups, constantly adapting to shifting market trends.

They've transitioned from opening a physical restaurant in 2011 to an online-only model in 2014, and now, in 2023, they are circling back to brick-and-mortar establishments.

The future profitability of Rebel Foods will depend on how quickly it can expand its physical footprint, stay ahead of competitors like Swiggy and Zomato-owned cloud kitchens, and maintain cost-effectiveness.

✍️ Jargon of the day

Cloud Kitchen - Cloud kitchens are delivery-only restaurants without dining areas for customers and have no physical storefront. Therefore, they operate behind the scenes and out of sight.

Customers order online on food delivery apps (such as Swiggy, Zomato, etc.) or directly from the virtual restaurant via their app.

The food is prepared in production kitchens (aka “ghost kitchen”) from which it is collected by drivers and taken to customers.

Loved this edition? Or have some thoughts to share? We'd love to hear from you

Cheers,
Karthik