Multiplex chain Carnival Group, which operates Carnival Cinemas, has launched a wholly-owned subsidiary Purple Foods & Beverages to mark its entry into the cloud kitchen business.
The company plans to start its journey by setting up 100 cloud units in its network of cinemas and two more central commissaries over the next two years. It has also set aside INR 15 Cr for the same. The company believes that the cloud kitchen market has a “huge potential” and can also work along with its network of 150 theaters across 120 cities.
Shrikant Bhasi, founder and chairman of Carnival Group in India, told Economic Times that investing in cloud kitchens will help the group avoid the bigger infrastructural expenses like real estate that the traditional restaurants and hotels have to make.
“Food is and always will be a huge industry. We understand the current scenario of Covid-19 pandemic is not very favorable for many existing restaurants and hotels. The idea is to think beyond it,” he added.
So far, the company has started setting up its cloud kitchen units across nine cities — Mumbai, Kariyad (Kerala), Bengaluru and Belgaum (Karnataka), Jodhpur and Jaipur (Rajasthan), and Allahabad and Varanasi (Uttar Pradesh).
The company will offer five brands — Purple Canteen for non-vegetarian food, Green Canteen for vegetarian food, Red Bubble Cafe, Movie Munchies and Fresh Counter. It will rely on food aggregator platforms Swiggy and Zomato for delivery of its food and beverages.
According to Datalabs by Inc42+ estimates, the projected market size of cloud kitchens is expected to reach $1.05 Bn by 2023. The report ads that cloud kitchens are usually dependent on platforms such as Swiggy and Zomato for delivery, awareness, reach and customer experience.
Therefore, the major operational costs such as marketing, discoverability and delivery are being borne by these food aggregators. Though it helps in reducing the operational cost, it increases the dependency of cloud kitchens on aggregator platforms. However, the annual average setup cost for opening a restaurant in India is approximately 3.05x times that of a cloud kitchen.
With the spread of Covid-19, the cloud kitchen model is gaining even more prominence as customers are reluctant to go out, and in some cases eat from outside. Therefore, this model cuts all the unnecessary spends of the business, helping them create a longer runway during such crises and sustain longer. POSist’s cofounder and CEO Ashish Tulsian believes that they are going to be the future.
Speaking to Inc42’s founder and CEO Vaibhav Agarwal, Tulsian said that recently five-star hotel chain Oberoi ventured into home delivery. “If something like this is happening, the writing is very clear on the wall,” Tulsian added in an ‘Ask Me Anything’ session with Inc42.
Some of the prominent cloud kitchen networks in India are Hoi Foods, Rebel Foods, Box8 and more.