Ola plans more Khichdi-like in-house brands
Ride-hailing firm Ola is betting big on the food business and planning to launch a portfolio of in-house food brands and expand them across the country.
These brands would be available on external platforms like food delivery apps Swiggy and Zomato. Also, Ola is aiming to set up its offline stores, including restaurants, cloud kitchens, food trucks and pop-up kiosks to sell the brands.
Ola’s food business will be focussing on becoming a foodfirst company with a massive kitchen infrastructure and a slew of brands. These include brands related to desserts, rice bowls and biryanis, which would be unveiled this year. These initiatives will also help the company reach new customers by penetrating deeper into the existing space as well as expand into tier-2 and tier3 cities. “It is a very big opportunity and there are very few food brands with a national footprint. Eating out was an indulgence four years back but now it is part of the daily routine. And, food and supply have to modify with that behaviour,” said Pranay Jivrajka, chief executive of Ola’s food business.
“We aim to have a national presence for our (food) portfolio and our goal is to have 80 per cent penetration in the top markets,” Jivrajka added.
To begin with, the Softbankbacked company has launched its flagship brand ‘Khichdi Experiment’ which has gone live in Bengaluru, Hyderabad, Mumbai, Pune and Chennai. It is offering more than 16 varieties of ‘Khichdi’ and the flavours will keep expanding, depending on the feedback from customers. ‘Khichdi’ is a comfort food liked by people across ages and demographics.
Ola said the idea was to answer the hunger pangs, reconnect with the nostalgia and comfort that one attaches with an item like ‘Khichdi’.
According to sources, Ola was facing challenges for its food delivery business Foodpanda and is pivoting towards focussing on its own inhouse food brands through cloud kitchens.
It has a network of 50 kitchens in Bengaluru, Hyderabad, Mumbai, Pune, the Delhi region and Chennai. The firm is looking to expand this network into more than 80 cities by next year. Ola had acquired Foodpanda’s India business from Germany-based Delivery Hero Group in December 2017 and committed an investment of $200 million into Foodpanda India.
It was competing with large food delivery players in this space while burning a lot of cash in the process, with rising competition, according to sources.
However, Ola said through Foodpanda, it realised that there is a need to solve the overall food experience rather than just focus on the logistics part of the business.
Foodpanda would be a distribution channel for Ola’s own food brands as well as some other partner brands.
The concept of cloud kitchen has recently caught the attention of food tech companies and investors who are pouring millions into such facilities.
Mumbai-based food-tech firm Rebel Foods, known for brands like Faasos and Behrouz Biryani, operates more than 205 delivery cloud kitchens and 1,600 online restaurants across 18 cities. In the next two years, the company aims to have around 500 cloud kitchens.
Rebel also runs brands such as Mandarin Oak that provides Chinese cuisine; Oven Story is known for pizzas and Sweet Truth offers desserts.
Bengaluru-based Swiggy, a Naspers and Tencent Holdingsbacked food delivery firm, is expanding its cloud kitchen platform Swiggy Access to metros, including Delhi, Mumbai, Kolkata, and Hyderabad.