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Saturday, Aug 24, 2019

Cooking in the cloud: Co-working enters the F&B space

Shared kitchens, collaborative food courts — new formats are emerging for real-estate in the food and beverages sector.

real-estate Updated: Jan 19, 2019 19:07 IST
Krutika Behrawala
Krutika Behrawala
Hindustan Times

Last year, when Abhay Singh decided to launch a food start-up in Powai, the biggest challenge was finding an affordable culinary studio. “I saw several spaces but nothing under Rs 60,000. I also had to factor in the brokerage fees and cost of setting up the kitchen,” he says.

Just when Singh was about to give up, he came across FoodCoWorks – a co-working space in Vikhroli designed for food business operators. The 300-sq-ft kitchen comes equipped with stoves, a refrigerator, an oven and basic utensils.

In October, Singh launched Take On Hunger, a breakfast catering service for corporates in Powai, out of this space. He uses it from 4 am to 10 am, has a staff of nine that cooks 12 items – idlis, dosas, upma, poha, aloo parathas etc - for about 100 customers daily.

His monthly rental: Rs 15,000. “The co-cooking model has helped me cut costs immensely. Since it’s fully equipped, I saved on set-up and began my operations within a month of signing up with them,” Singh says.

Despite the F&B sector seeing unprecedented growth over the last decade, rising real-estate costs across cities have been a major dampener and this factor alone can lead to the closing down of restaurants, says Anuj Puri, chairman of Anarock Property Consultants. “Rentals in some prime locations in Mumbai whittle away 25% of a restaurateur’s revenue, against a global trend of about 15%.”

As rising real-estate costs lead to co-living and co-working, co-cooking is becoming a reality in Mumbai’s start-up ecosystem. Restaurateurs and entrepreneurs are setting up pay-per-use kitchens, food court-style collaborative set-ups and start-ups are outsourcing prep to third parties.

A food court? Not really

Another popular model has become the indoor, collaborative food court set-up. Not the mall outfits, where rents are extremely high, but ‘restaurants’ like Flea Bazaar Café in Lower Parel, Bar Bank in Juhu and Eleven Kitchens at Nariman Point.

Each houses a number of lesser-known but reasonably popular brands, pop-up outlets, food trucks and delivery kitchens.

In most cases, the eateries prep the food in central kitchens and assemble it at these spaces. In a revenue-sharing model, the costs are divided, as are the risks.

“The pressure is much less,” says Saransh Goila, chef-owner of Goila Butter Chicken. “An added benefit is the visibility the brand gets. “Being a delivery outlet, we only focus on food. But at Flea Bazaar Café, guests can enjoy our food with drinks. The physical set-up in a popular location has helped us get more orders at our stores in Andheri and Bandra too.”

Pay per use, outsource

Start-ups are also opting for pay-per-use models and outsourcing their prep to third-party outlets. Sahil Vora uses FoodCoWorks as a distribution hub to sell the mousses he makes under Moussestruck. He pays Rs 7,000 per month for 11 am to 11 pm shift and uses only its refrigerator.

“The idea of the co-cooking model is to offer a springboard to new food start-ups and help them test the market,” says Swapnil Dhotre, co-founder of FoodCoWorks.

Ceres Hospitality, which operates the catering and delivery brands Pan of Asia and Pao & Bao, outsources its prep – from the right meat cuts to making sauces for its stir-fries and baos – to Kai Foods, a multi-purpose food preparation facility with an industrial-size hot kitchen, a bakery unit, a beverage line and a desserts section in Bhiwandi.

The dishes are then assembled at their outlets in Nariman Point and Lower Parel. “Earlier, we would make everything from scratch at our 1,500 sq-ft central kitchen in Andheri,” says Deb Mukherjee, CEO, Ceres Hospitality. “But we couldn’t afford heavy rentals. Since our products are standardised, we decided to outsource the prep. Now, we only pay rent for basic, 250 sq-ft outlet spaces. We’ve reduced our expenses by almost 30 to 40 percent because we’ve saved on rent, staffing and equipment costs.”

Cloud kitchens

To combat high rentals, says Puri, restaurant owners could consider a revenue-sharing model or equity sharing with developers or landlords similar to what is seen in retail formats.

The shared economy is the future for F&B sector, adds Rahul Singh, president of the National Restaurant Association of India. “You’ll see a lot more cloud kitchens popping up. These are single production units that house multiple brands and operate like a co-working space. However, a challenge would be to ensure all the licenses are in place and safety isn’t compromised.”

First Published: Jan 19, 2019 19:07 IST

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