Exclusive Interview with Junaiz Kizhakkayil, Founder of Kitchens@

Compromise is a not word that would find a place in a food-lover's vocabulary. Earlier, food explorers would scout for places with ambiance and comfort, to spend some moments of peace binging on their favorite food. There was no other option. Now that cloud kitchens are taking over, how people define their gastronomic preferences is set to change. It is time for the food industry to catch up with the unique concept of on-the-air kitchens which are making waves in the F&B industry. Kitchens@ is one such cloud kitchen that differentiates itself from others by leveraging data analytics. Analytics Insight has engaged in an exclusive interview with Junaiz Kizhakkayil, Founder of Kitchens@.

1. The F&B industry is seeing a rise in the importance of technology in cloud kitchens. How do you see these emerging technologies impact the sector?

What makes cloud kitchens a success is the use of technology. Since success ultimately depends on consistently and effectively delivering an excellent consumer experience, lower start-up and operating costs alone cannot ensure success. While cloud kitchens lower operating costs, they do not help with the many other challenges of scaling up, which leads to a lackluster consumer experience. For instance, the general cloud kitchens model cannot address key issues such as precise order forecasting, demographics analysis, kitchen management, robust supply chains, culinary innovation, quality control, product consistency, and so on.

The technology we employ is the culmination of data quality and data usage. Collecting the data, analyzing the insights, and converting it to foresight are the key pillars.

Technology helps us find the demand gaps and service these gaps effectively.

Over the last few years, the F&B sector has largely automated production facilities, manufacturing, delivery, etc. and data is the backbone of this automation. Additionally, it is the technology that will help the industry cater to the rising trends of personalization, demand for healthier food, and the ever-changing consumer metric. The use of technology in this sector is booming and the possibilities are numerous.

2. What are some of the challenges faced by the cloud kitchen industry these days?

There are a few challenges that we face and the first one is the lack of consumer interaction. A large part of what is driving this market is consolidating supply, bringing in orders, and signing up with marquee brands, which is great but what a lot of consumers look for is to replicate an experience. The main difference between a cloud kitchen and a restaurant is experience. At a restaurant, a customer goes to experience the food, the ambiance, music, etc., but when it comes to a cloud kitchen, one largely orders because they are craving a certain cuisine.

Another challenge is tangibility, for instance when we talk about hygiene standards in our kitchens, it is based on trust. Customers have to take our word for it as we are not able to show them the processes we employ, though it is something we would like to show them.

Consumers' inability to see and understand the conditions in which food is created is a barrier for cloud kitchens, making it impossible to determine with certainty whether the food is prepared hygienically.

Delivering is the only means to reach customers using cloud kitchens, and as a consequence, there are no viable opportunities for the customer to interact with the restaurant, and building credibility is often cumbersome.

Infrastructure, food preparation, waste management, food handlers, and pest control all have a big part to play in keeping the kitchen clean. It is not always clear how important these factors are. Many people assume it's expensive to have a clean environment, but they forget that the cost of not preserving one is much higher.

The last thing is technology, which is very important to us. The fact that real-estate expenditures are being substituted by technology costs is one of the biggest problems for cloud kitchens. If there is a compromise on technological features like the delivery network, logistics support, order tracking, customer applications, and so on, a cloud kitchen cannot operate as intended. It costs money to invest in and maintain these many features.

3. How is your company helping business aggregators deliver relevant business outcomes through the adoption of your company's technology innovations?

We follow what we refer to as a "consumer playbook". It is a guideline helping us identify who our consumer really is, and can be broken down into cuisine, place, and consumer journey. The idea of leveraging the right brand partnerships comes from having a deep understanding of what consumers look like within given Micro Markets. The Indian consumer is highly nuanced and has a very diverse palette.

Additionally, consumers have also begun to weigh a new set of factors more heavily in their purchase decisions and preferences, such as an increased awareness of hygiene, ingredient sources, nutrient profile, and more, disrupting the consumer value equation in ways that present both opportunities and challenges for the industry. Our knowledge expertise as a function of a deep understanding of customers allows us to help brands and aggregators better understand the drivers and implications of these shifts.

An understanding of consumer demographics and the variables that influence cuisine preferences is imperative when it comes to establishing partnerships with large brands or even building new brands. At Kitchens@, we have broken the Indian consumer's preferences into 14 specific cuisines over various micro-market profiles across the country, and our ability to gather data and make such inferences is further augmented by our robust tech stack.

4. Could you please explain the growth of cloud kitchens that you have seen over the last few years?

The last few years have seen a boom in the cloud kitchen sector. Unlike standalone restaurants, cloud kitchens saw an increasing number of customers ordering in. There has been a growth of at least 10x in the last two years.

The way we dine and experience food will drastically change shortly thanks to the success of cloud kitchens. Its expansion is caused by the fact that the risks are relatively smaller. The financial limitations are fairly manageable because the demand for the digital platform drives down operating costs.