1. Cloud kitchens: CEO Rashmi Daga on why FreshMenu is better placed for deliveries than a food aggregator

Cloud kitchens: CEO Rashmi Daga on why FreshMenu is better placed for deliveries than a food aggregator

Foodpanda, Swiggy and Zomato have become synonymous with online food orders but increased interest in cuisines from across the word has paved way for cloud kitchens such as FreshMenu, Innerchef and Twigly.

By: | Published: May 10, 2017 3:10 AM
Rashmi Daga, founder and CEO of FreshMenu tells Hita Gupta why food prepared at FreshMenu’s kitchen is better placed for delivery and offers better margins than a food aggregator.

Foodpanda, Swiggy and Zomato have become synonymous with online food orders but increased interest in cuisines from across the word has paved way for cloud kitchens such as FreshMenu, Innerchef and Twigly. FreshMenu entered the market in October 2014 to serve food prepared in its own kitchens.

FreshMenu serves about 11,000-12,000 orders on a normal day and about 14,000 orders on a peak day. Average ticket size is recorded at Rs 320 but it charges a delivery fee of Rs 30 for orders below Rs 200. Rashmi Daga, founder and CEO of FreshMenu tells Hita Gupta why food prepared at FreshMenu’s kitchen is better placed for delivery and offers better margins than a food aggregator. She pegged net margins for the company at 30%. Edited excerpts:

How is FreshMenu different from other food ordering platforms?

India is a huge market for food in the organised and in the unorganised space. There is a spectrum of food choices that the customer always has and we are trying to use the internet to reach out to them in a more effective manner. We are a restaurant on cloud which is focussed around delivered food. We do a lot of innovation which works for delivered food. We package it in such a manner that the consumer can have the best experience. We were the first ones to bring in the meals in a bowl concept with our specialised rice bowls and we delivered well on that.
FreshMenu is listed on Swiggy and Zomato. These platforms help customers discover FreshMenu but it contributes less than 10% of the orders.

What is the backend process at FreshMenu?

We have kitchens in the neighbourhood where we cook food in real time, package it and deliver it to the consumer. Under the hub and spoke model, there is one kitchen which supports all these kitchens but cooking takes place at kitchens which are nearer the delivery location so the customer gets food that is fresh and not reheated. Each kitchen serves a radius of 3-5 kilometers. Currently, we have 26 kitchens across three cities and are looking at 24 more kitchens this year with expansion to more cities.

How does FreshMenu manage deliveries?

We have our own fleet of delivery boys and that serves us well because quality control is higher. These dedicated riders know the customer, the locations and are faster in reaching out to these locations. We have created a better delivery engine because we manage the manpower behind it. Third party players do not have visibility on the total number of orders or the demand, and food delivery works on demand. We have a lot of prediction on our platform so we can club orders for the same location. We have a delivery fleet of 700 rides. Bengaluru has about 500 delivery boys and we have 100 each in Mumbai and Delhi.

What are your expansion plans?

Expansion to Tier II and Tier III is not a part of our plan because there are still large metro markets which we have not served. Chennai, Pune, Hyderabad is the next set of cities which we are looking at over the course of this year.

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