How F&B startup Cross Border Kitchens clocked Rs 4 Cr revenue in less than a year
Cloud kitchen is the latest trend that has quickly established itself in the restaurant space. With the increase in demand for food delivery combined with rising rental costs in major cities, Cloud Kitchens seem to be a smarter way to run a restaurant business. They are nothing but fully-equipped shared spaces for restaurant owners, and use mobile apps to take orders and deliver food to customers. Some of the popular cloud kitchens in India today include Swiggy’s Bowl Company and Fresh Menu.
While there has been a rise in cloud kitchens across India, Delhi-based Cross Border Kitchens is focused on the art of making great quality food. Started in January 2019, CBK claims to be providing consistent high-quality food across multiple cuisine types, at every possible price point, and via every possible format.
The idea was conceived over a dinner table conversation between four friends - Ahsan Qureshi, Ishita Yashvi, Mayank Singh, and Mohit Mehta.
“We often talked about creating something meaningful together where we would not only utilise the best of our individual talents but would also be able to give back to the society and have a positive impact by creating large scale employment. Over the dinner meeting, it finally dawned upon us that what we wanted to create together had to be about food – our love for great food and our passion for hosting and feeding others,” says Ishita.
Cross Border Kitchens currently has seven brands under its wing - Biryani Central, BroMomo, AIM Burger, Chutney India, Irfan Bhai, and The Meal Bowl. For now, they are operating in Delhi NCR.
Making inroads in F&B industry
Ahsan Qureshi is a seasoned restaurateur with a culinary lineage. Ishita Yashvi is a marketing veteran with stints at DLF, Forest Essentials, and the Outlook Group. Mayank Singh comes with many decades of experience in strategy, investment banking, and entrepreneurship, and Mohit Mehta comes with an investment banking and finance background. Each of the co-founders come with over 15 years of work experience.
According to the core team, they want to achieve excellence in all things that go into the manufacturing of food. From operational excellence and marketing expertise to technology, the co-founders say these key processes help them bring seven operational brands (with an additional 4 launching soon) to the market, in four different cuisine types at a wide range of price points.
“We see ourselves as part of the larger ecosystem of the F&B industry. We do not intend to limit our business preview to deliver only in a cloud kitchen format. Our ambition is to be present in every vertical (B2B / B2C) and cuisine (Indian, Pan-Asian, Western or Speciality). The format can be phygital, and offer different price points in the F&B ecosystem. The F&B industry has changed in many aspects since food aggregators started making an impact. More recently, with delivery only formats, this impact has been felt at a larger scale,” says Ishita.
As technology makes deeper inroads, the value of the supply chain will become more and more important to the cloud industry. However, what makes CBK stand apart is its ability to produce consistent high-quality food and develop delivery mechanisms to reach the end customer. It currently competes with the likes of Yellow Tie Hospitality and Bowl Company.
CBK claims it does not outsource any of its key processes. From mass production of food to developing technology, web design, packaging design, photography, and other key marketing aspects are developed and executed in-house.
“We are able to achieve the speed of launching and delivering brands, making them reach maturity, and sustain sales because we have spent our first 11 months in developing a planned foundation for our business,” says Ishita.
Apart from its ability to make food, CBK claims to be a technology company. According to the startup, in its first 11 months, it has hired and retained tenured staff, and says that about 75 percent of chefs come with a 5-star hotel background. It also claims to be shaping multiple verticals – online food delivery, B2B sales, etc.
CBK has also developed and is scaling an in-house delivery fleet, and has established in-house R&D capability for food innovation. Apart from this, it has integrated with all existing aggregators, and has developed an in-house analytics team.
The market and challenges
According to PwC, the size of food services or cloud kitchen industry in India is Rs 5,000 crore. CBK, which calls itself an internet-based F&B company, currently operates as a multi-format, multi-cuisine, and multi-kitchen outfit. Its business model is direct and simple - it provides quality food through various channels to end customers and charges for the same.
Ishita says: “We started with two brands in March 2019, with an exclusive presence on Zomato. Within the first 90 days, both our brands started clocking hundred plus orders per day.” She adds that at this point, all our operation was fully funded by the founders, who together pumped in an excess of Rs 3 crore.
Launching in a competitive market, the business had its own challenges. One of the main challenges was the absence of input tax under the GST regimen.
The current industry solutions for packaging does not provide for a 100 percent recyclable solution that fits the delivery model. Hence, the startup claims to be using the best available solutions, including recycled and recyclable packaging.
“We continue to work with vendors to find more sustainable solutions,” says Ishita.
In the next 18 months, CBK wants to establish its presence in more cities across India. “We plan to be present in seven major cities in India with different formats. We expect to have 570 live PoS, and plan to deploy capex of Rs 18 crore. We also hope to create employment to 2,000 to 2,500 people,” says Ishita.
Currently, the startup is delivering nearly 10-12 thousand orders every month under its seven brands, and is looking to clock Rs 4 crore revenue by the end of March this year.
(Edited by Megha Reddy)