Cloud Kitchen Can Supply Products To Innumerable Brands: FSSAI

According to the Food Safety and Standards Authority of India (FSSAI), a cloud kitchen can supply its products to multiple brands. FSSAI’s comments come after a Substack user revealed that a person was allegedly running hundreds of fake brands on Swiggy and Zomato.

The food safety authority said that the cloud kitchen can supply its products to ‘innumerable brands’, so long as it complies with the norms.

Last week, a Substack user Pea Bee, or Prashant Baid published a post which mentioned that a single person was running around 200 brands each on Swiggy and Zomato from two locations in Bengaluru. 

Ramjani Khan, the owner of these cloud kitchens, registered the restaurants with the same FSSAI number but from slightly different addresses.

Baid added that many brands being run had names similar to those of popular brands, adding, “This may dupe the customer by appearing on top of the search results if the original restaurant is unavailable for delivery at that location.” Baid also added that many restaurants were named exactly the same, but with a change in the letter cases.

“Creating hundreds of fake restaurant brands on these platforms shouldn’t be so easy,” Baid added. Baid also added that most of the said restaurants had ratings of less than 4 across both Zomato and Swiggy.

According to FSSAI, a platform that only lists food business operators (FBOs) but does not engage in any activity mentioned under Section 3(n) of the Food Safety & Standards Act, 2006 (related to food business) is not required to obtain an FSSAI license. 

However, they must list only those FBOs who possess valid FSSAI licences or registration. Therefore, Swiggy and Zomato are required to only list FBOs with an FSSAI licence.

While Twitter users argued about whether or not running hundreds of brands from a single location should be allowed, the restaurant operators are of the opinion that there was nothing illegal with this practice.

Kabir Suri, the president of the National Restaurant Association of India (NRAI) told ET that the competition between restaurants comes down to quality, consistency and pricing from a customer perspective and not how many brands a kitchen can operate.

It is prudent to mention here that the FSSAI licence is not dependent on the entity but rather on the location. Therefore, all the food businesses related to a single location having obtained the licence can be registered using the same FSSAI licence.

According to a TechSci Research report, India’s cloud kitchen market is expected to grow between 15.5% and 17.5% CAGR during 2024-2028 and might reach a market size of $2.5 Bn by FY28. Some of the major players in the cloud kitchen market are Rebel Foods, Curefoods and Biryani By Kilo, among others.