The rise and rise of Deliveroo and UberEats isn’t stopping anytime soon.
The coronavirus pandemic has caused us to rely more on food delivery than ever before. Take JustEat’s parent company results, released this week: it reveals the group processed 257 million orders in the first half of 2020.
Increasing demand for takeaway food has led to the emergence of a new area of the food industry: so-called dark kitchens. It’s when food is prepared at a separate takeaway premise, rather than a restaurant. The concept has taken off in lockdown. with established brands like vegan By Chloe and Hoppers using it as a cheaper way to keep running.
There’s serious cash involved too, with dark kitchen provider Karma Kitchens recently raising £252 million for expansion and Uber co-founder Travis Kalanick’s involvement with US company CloudKitchens, founded by an early Uber investor.
The dark kitchen model has some benefits. It allows food businesses to broaden their reach by setting up shop further away from a traditional premise. But there has been criticism levelled at dark kitchens including low pay for those working there and lack of regulation.
Former strategy consultant turned food entrepreneur Salima Vellani thinks her start-up KBox is a middle ground between the dark kitchens and the restaurants. Instead of setting up new kitchen spaces in car parks and renting them out to restaurateurs, KBox matches up under-utilised kitchens with those looking to diversify in the food delivery space.
Say you’re a casino owner and you’ve been closed since March. You could turn your kitchen space into a KBox kitchen and run a food delivery business out of it. Or you could be a restaurateur and have space in your established kitchen and want to get the best out of it.
“We don’t need to build more kitchens when there are tens of thousands out there run by hard-working people, they just need that support. That’s what I set out to do with KBox,” explains Vellani.
Vellani dove head-first into the food world five years ago with the launch of premium chicken restaurant Absurd Bird which eventually grew to six locations from its original premise near Spitalfields market. However, last year things weren’t going so well. “We were suffering from high-rent costs, labour costs, food costs, and over-competition. And then with Deliveroo, it was becoming harder to bring people into the restaurant.”
With delivery growing at 20 per cent year on year and restaurants growing at 1 per cent, the Absurd Bird team pivoted to delivery-only and six weeks later it was seeing increases in demand. Vellani began to completely re-think what the company could be. “We need to look at the restaurant in a different way. We can’t look at it as a static, bricks and mortar environment, we’ve got to look at it as a set of ingredients with some seats at the front.”
Around the same time, a large leisure operator got in touch and said it wanted to put Absurd Bird in its locations. Vellani said they could, but only if she could use the kitchens to deliver chicken to customers and the other food brands she was starting to experiment with.
How does KBox work? Say you’re a gym operator for instance that wants to do something with an under-utilised kitchen. You can sign up to KBox and use the kitchen assessment app which takes into account the size of the space, equipment, ingredients, labour and processes. The start-up uses this information, combined with what’s going on outside the kitchen such as local competition and demographics, before working out what type of food the kitchen should produce.
Similar to the way a franchise works, KBox customers can select from a number of KBox food brands that are developed in-house. There’s 30 in total, including Absurd Bird, a vegan burger brand called Voodee, as well as other offerings including wings, mac and cheese and salads. A team develops the recipes in-house and KBox customers download them and start preparing the dishes to sell.
When the tech is fully finished, sometime early next year, Vellani says getting set up on KBox should take about a day to sort out. The next day, the owner will receive a tablet with the information preloaded, which they can plug in and get started. Using KBox means its also easier for kitchens get onto the delivery platforms, a process which can take up to six weeks at the moment but Vellanni says it will act as an aggregator to make this faster.
“The kitchens we operate and are running are ahead for like-for-like sales with last year. A 100sq ft kitchen doesn’t need to be robots, or really sophisticated, we can get that revenue if we do it smartly.”
The investor appetite is there. KBox recently raised £5 million from Hoxton Ventures, early backers of the likes of Deliveroo, Darktrace and Babylon. “Our ethos is to work with founders with big ambitions on a mission to address an industry challenge. Salima and KBox have already established the potential for revolutionising the delivery space and we are only too pleased to join them on the growth journey,” said founding partner Hussein Kanji in a statement.
At the same time, there is the question around digital brands and the authenticity of food. Surely if people are going to order a Poke bowl or ramen, they want to have it created by someone who hails from those cultures, or it’s just cultural appropriation? But things don’t work like that in the real world. Vellani points to a Euromonitor report that said 50 per cent of global consumers have no problem ordering from a dark kitchen or a virtual brand.
“I have Michelin-starred chefs from Indian cuisine, French, Mexican, chefs from Asian cuisine. Where the food is developed, it’s from people with that heritage and that’s very important to me. When it’s cooked, I can’t ensure the kitchen has an Asian chef in there, but the ingredients, love and passion did come from someone with that heritage,” she says. “Some of your favourite restaurants, they’ve made the food in a manufacturing facility and sent it out because now they’re a chain. It happens all day long and it’s nothing unique or scary.”
Instead, what KBox says it offers is the chance for restaurateurs to keep making the food they love and are passionate about, but if they have under-utilised space, they can use a KBox brand to diversify their revenues. “What we want to do is enable those people who are passionate about food. We go into kitchens and say make the food you’re great at. But that’s becoming increasingly difficult so we’re going to supplement and supplant your kitchen with other revenues.”
There’s a wider mission at hand too as Vellani wants to use KBox to push the mantra of sustainable food. Currently, 20 per cent of KBox’s revenues comes from vegan dishes. She hopes that by showing kitchen owners the data that supports people moving towards flexitarian lifestyles and vegan diets, she can encourage them to pivot to healthier offerings. “In five to 10 years time I want to be in more kitchens than McDonald’s and KFC and I want those kitchens to be kicking out healthier, greener food with sustainable packaging.”
That’s a big pivot for a chicken restaurant. “The smart thing is to win over the flexitarians – the people who want to do it a few times a week. To win in the game, the commercial kitchens need to make money and we can see those trends happening.”
