ITC spices up delivery game with Nationwide Cloud Kitchen blitz

2 Jan 2024 , 10:05 AM

ITC plans to expand its cloud kitchen venture, which it has been testing in Bengaluru. The company has launched its food delivery service in Chennai and intends to expand to Mumbai, Delhi, and Kolkata. It offers North Indian lunch and dinner as well as bakery goods. Executive director Hemant Malik stated that brunch and eastern cuisine additions are also being considered.

This industry, which the corporation refers to as ‘food-tech,’ is one of the new growth vectors that it has identified. At the moment, it operates under three brands: ITC Master Chef Creations for gourmet North Indian cuisines, ITC Sunfeast Baked Creations for baked goods, and ITC Aashirvaad Soul Creations for everyday or comfort food. Four cloud kitchens are located in Chennai and 19 in Bengaluru. The kitchens are already less than half full.

‘We have a winning formula, which includes having established brands that come with certain credibility, cuisine supported by ITC Hotels’ chefs, and capabilities of the packaged foods business,’ Malik stated.

The IT knowledge required by the company stems from our emphasis on digitalization. In the cities where we operate, the strategy calls for the creation of central kitchens and satellite kitchens. After just two years of operation, we have already taken the lead in Bengaluru’s premium market and we plan to expand into other cities, Malik stated.

Given that Swiggy and Zomato demand kitchens every 2.5–3 kilometres, the model consists of a central kitchen and multiple satellite kitchens. Chennai as well as Hyderabad may be served by ITC’s food tech central kitchen located in Bengaluru. ‘Our strategy is to add new cuisines and meals apart from expansion into the metros,’ Malik stated.

ITC cloud kitchens have an average order value of Rs 900, which is twice the industry average. The rapid service and 5% goods and services tax (GST) compared to the 18% GST for hotel restaurants are the primary distinctions between this business and the kitchen of ITC Hotels. ITC has fulfilled more than a million orders to date.

ITC stated in a recent investor presentation that the cloud kitchen business has institutional synergies with ITC in the areas of food business involving FSSAI regulations, packaging solutions for fresh food delivery, consumers’ feedback for future FMCG products being gathered digitally first, the hotel industry’s culinary expertise, and industrial ready-to-eat and frozen food products.

10% of orders placed on food delivery platforms are placed in cloud kitchens, with the remaining 90% coming from dine-in establishments. According to the company’s presentation, the scalability of North Indian food is a challenge due to its reliance on the talents of the chefs and the absence of standardisation.

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