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F&B (food and beverage) is a massive industry today. In fact, it is stated to reach $7000.88 billion in the year 2024 from $6576.96 billion last year growing with a CAGR of 6.4%. Driven by the rise of disposable income, urbanization, and a growing taste for multi-cuisines, cloud kitchens became a new favorite for many entrepreneurs who wanted a slice of F&B. However, this concept was pioneered first by an Indian company called Rebel Foods.

Rebel Foods is a global leader in the cloud kitchen revolution. Founded in the year 2011, the company started as a brick-and-mortar restaurant. However, in 2015, they pivoted to a cloud kitchen movement launching their first kitchen dedicated solely to online orders. This helped them become a powerhouse with over 45 brands delivering diverse cuisines without a traditional front. 

In this interview, we will be talking to someone very important from Rebel Foods. This person has played an active role in the development of the brand and has been at the forefront of its growth. So, before jumping onto the interview, let's learn a little more about him.

Who is Sagar Kochhar?

Sagar Kochhar is the Co-Founder & Chief EatSure Officer, at Rebel Foods (formerly Faasos). He is a seasoned leader with a background in engineering and an MBA. With a career that has spanned global giants like Larsen & Toubro and Perfetti Van Melle, Sagar has driven growth in Rebel Foods. Also, he has been behind pioneering the associated brands and coming up with innovative marketing strategies.
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1) How did you come up with the name “Rebel Foods”? Also, what is the significance of “Rebel”?

Back when we started in 2012 as Faasos, our only goal was to create India's largest homegrown QSR (quick service restaurant). At that time, the F&B category in the country was primarily dominated by multinational pizza and burger chains. However, we wanted to build a strong Indian brand.

By 2015-2016, we realized that we needed to expand our offerings beyond Faasos. After that, we began developing a portfolio of brands. This portfolio included names like Behrouz Biryani, Oven Story Pizza, Sweet Truth, Lunchbox, and many others.

To unify these brands under one entity, we chose the name Rebel Foods. This name reflects our core values and our mission to redefine the rules of this game. Also, the entire company resonated with the name, and so Rebel Foods was born.

2) Can you share the inspiration and the journey to took to build from a single-focused restaurant to a multicuisine cloud kitchen?

From the outside, the F&B industry can look tempting. However, operating and scaling traditionally is challenging. There are many startups that fail within the first two years due to difficulties related to execution.

However, in 2012, we started with the funding from Sequoia and scaled from seven to 40-50 locations by 2014. But, we realized that the traditional scaling methods were slow and inefficient. 
Notably, a survey in 2014 showed us that around 67% of our consumers had never seen a Faasos outlet and were ordering online. This shift towards delivery led us to pioneer the world's first cloud kitchen in 2014. After this, we scaled from 60 to 180 locations in a few years.

From 2016 to 2019, we expanded our brand portfolio and developed the Rebel Operating System (Rebel OS). This OS comprises three key pillars. The first pillar is culinary expertise. 
Our Culinary Innovation Center (CIC) helps create, deskill, and scale recipes for various cuisines. This includes complex dishes like biryani and Indian meals.

The second pillar is a seamless supply chain. We operate close to 400 cloud kitchens across 75+ cities. It allows us to launch seasonal and regional dishes efficiently. 
The third pillar is our tech stack. Our in-house technology manages everything. This ranges from order placement to inventory and supply chain, thereby, ensuring smooth operations and scalability.
In 2019, we realized that Rebel OS could also support external brands. We partnered with Wendy's, scaling them from 5-6 locations to 90 in just a year. This collaboration highlighted the potential of Rebel OS to not only power our own brands but also scale other established brands. For instance, during COVID, we partnered with Natural Ice Cream, expanding their reach from 50-60 locations to a much larger footprint using our platform.

3) What are the biggest challenges and opportunities in the the cloud kitchen space?

When you talk about cloud kitchens, they essentially try to remove frictional forces in the business. To build a new business or disrupt a category, you first need to identify and eliminate these frictional forces. 

Over the last 10-12 years, this is exactly what we've done. Our cloud kitchens remove the significant frictional force of real estate allowing us to launch multiple brands without location risk.
As I mentioned earlier, 80% of F&B startups are unfortunately shut down by their second year. They might have a great brand and concept but their product fails to resonate with consumers in a specific locality. This creates a huge location risk. Also,  the CAPEX for a well-done restaurant can be close to 80-90 lakhs or even 1 crore in rupees. 

Cloud kitchens also reduce the rental-to-revenue ratio from about 18-20% to around 5-6%. Also, you can launch brand after brand. However, cloud kitchens come with their own set of challenges. 
One major challenge is to ensure that your brand is strong and resonates with consumers. It's easy to misinterpret the cloud kitchen model as simply launching labels rather than a genuine brand. 
Without the physical presence of a traditional restaurant, one must focus on consumer insight, core offerings, and product quality. It is important that consumers love your food, or they won't return.
Building a strong brand in a cloud kitchen model requires attention to several key areas. First is positive word of mouth. 
If consumers enjoy your food, they'll recommend it to others, thereby, reducing customer acquisition costs. High product quality, excellent service, and attractive packaging are essential for good retention rates. 

Unlike offline restaurants, where physical presence can attract customers, cloud kitchens mostly rely on health metrics. For example, positive reviews and repeat business.
Additionally, cloud kitchens need to maintain high standards of safety and quality. For example, we have over 200 quality checks in our kitchens, and all our kitchens are HACCP certified which is a gold Indian standard for food safety and hygiene. We monitor every part of our kitchen in real-time which allows us to quickly address any issues and ensure they don't recur.

4) What are the challenges Rebel Foods faced while transitioning to the cloud kitchen model? Also, share an instance of a quality check while onboarding a brand.

There were many challenges and failures in our journey. The story I shared earlier highlights the best parts of our journey. 

One significant challenge that we faced with cloud kitchens was during a multibrand play. Initially, we tried to launch new categories within existing brands. For example, introducing pizza within Faasos didn’t work as planned. 

This helped us understand that a brand is not just about having a great product at one location. Instead, it becomes a brand by consistently offering that particular product across multiple locations.

5) Can you tell us more about your standalone app developed for multiple cloud kitchens of Rebel Foods?

Another interesting story is how we navigated during the pandemic. It significantly impacted the F&B industry, thereby, reducing revenue by 80-90%. 
During this time, consumers became more cautious as they focused on immunity-boosting ingredients. 

By 2020, which was our initial light bulb moment, we were scaling up and onboarding many brands. Basically, the pandemic reinforced the importance of the four Ps of F&B, i.e., Product, Process, People, and Packaging.

Consumers became highly conscious of the product, thereby, scrutinizing macronutrients, artificial colors, and flavors. The process also became crucial, with heightened attention to food handling, temperature management, and safety standards. 
The people aspect of the brand emphasized the importance of well-groomed, healthy staff, as their appearance influences consumer trust. Finally, packaging gained importance as it plays a huge role in maintaining food quality and safety.

With these insights, we launched a new proposition focusing on solving broken experiences in food delivery and offline dining. Over the past year, we've returned to the offline space, addressing unresolved experiences and ensuring consistent quality at all channels.

6) In the year 2022, EatSure has performed wonderfully, can you share your personal contribution to make the brand grow?

In retrospect, my personal contribution to this journey has been deeply rewarding. In fact, it’s not just me but the collective effort of 8,000 Rebels over the past 12 years. 

My journey started with Jaideep and Kallol, the founders when they onboarded us through the Fast Entrepreneur in Residence program. 

Initially, it was described glamorously, but soon I found myself doing everything from cooking to deliveries and managing kitchens. These experiences have given me countless stories and invaluable exposure.

The culture at Rebel empowers us to fail, learn, and grow, with an understanding that repeating a similar mistake is not acceptable. This approach can be attributed to our success allowing us to innovate and improve continuously. But to tell you about my side, I started by running operations and then scaling markets. 

Later, as we launched our multi-brand Playbook, I moved in centrally to take care of the brands as the CMO.

7) Rebel Foods products undergo up to 200 quality checks, what are the key technologies that are utilized in the app, and how do they enhance the delivery?

Tech is the most crucial pillar of our operating system, Rebel OS. Beyond this having a D2C app and tech stack, we have integrated technology into every part of our ecosystem. 

This includes how products are made while ensuring efficiency at every step. For example, deconstructing the process of making any cuisine that we’ve optimized through our tech implementation.

8) How does Rebel Foods approach sustainability in its operations?

Sustainability is a topic that is very close to our hearts. Also, we have initiated industry-first measures to address it. 

Right now, we are piloting projects across the country to achieve 100% sustainable packaging, eradicating all plastic. This even includes replacing even the small plastic pizza stools with proper non-plastic alternatives. This ensures that all packaging components are biodegradable and leak-proof.

In addition to packaging, we are also making our kitchens more sustainable. We are installing solar panels that have helped us become self-sufficient in energy and reduce our carbon footprint. 
We are also piloting the use of e-bikes for deliveries to further cut down emissions. These initiatives are showing promising results, and we are looking forward to them, making a significant announcement soon.

9) As a Co-founder of the brand, how do you ensure that your brand is taking a unique consumer-centric marketing approach?

When it comes to branding, it all starts with the purpose. Understanding the purpose behind any brand is crucial because it guides everything else. For example, with Behrouz Biryani, we know that Biryani is one of the most popular and widely consumed cuisines in India, yet it remains highly fragmented and unorganized. We aimed to position Behrouz Biryani as a royal experience, making it the go-to choice for special occasions and celebrations. We didn’t want to compete on being Lucknowi, Hyderabadi, or Awadhi; instead, we wanted to create a unique, celebratory Biryani experience.

After defining the purpose, the next step was to ensure that the product is top-notch. Even with a great purpose, a mediocre product won’t succeed. For Behrouz, we conducted intense consumer engagement sessions that perfected the Biryani recipe. The product also had to be exceptional.
After the product comes the experience. Here packaging plays a vital role. When we launched Behrouz, we invested in beautiful packaging that became the talk of the town. 
The Biryani was served in a beautiful box with a storytelling about its 2000-year-old recipe. We also included a complimentary gulab jamun and made sure every detail added to the royal experience. 
Recently, we came up with the "Mehfil" concept, serving Biryani in a metal Handi and partnering with Saif Ali Khan (Indian Actor) to enhance the celebratory feel.

Creating great experiences around the product helped us solidify the brand's purpose and quality. Once these basics are in place, everything else becomes more organic and manageable. 
Content creation, such as partnering with Chef Kunal Kapoor for a series where he explored royal kitchens and their stories, further reinforced our position as a brand and generated word of mouth.

10) Can you give three tips to build a successful cloud kitchen business?

Firstly, establish the purpose of your brand clearly—understand what problem or need you're addressing.
Secondly, focus on creating exceptional experiences around your product or service. This will help with customer engagement and delight.

Thirdly, track metrics and delve into analytics to assess whether you're effectively achieving your brand's goals. These steps will ensure that you are not only defining your brand's direction but also refining it based on tangible data and insights.

11) What is the one hard truth that you believe is crucial for every entrepreneur to know?

I would say, apart from many other important learnings in this entrepreneurial journey like prioritizing the customer first, as I've mentioned earlier, one crucial but often underrated aspect is to be intellectually honest. 

Many entrepreneurs conceive a great idea. They establish a noble purpose for their business and begin building upon it. However, they sometimes fail to assess whether the data supports their vision. They continue to iterate and invest significant time, not realizing when to acknowledge if their idea is truly making a meaningful impact in consumers' lives or not. 

Recognizing when to halt the pursuit of your new ideas is often more challenging than initiating them. In fact, the challenge is prevalent in larger businesses and multinational corporations (MNCs), where individuals can become overly attached to their ideas. 

Some may inadvertently justify their existence by simply hiding behind a few truths that are associated with their business and offerings. So, mastering the art of being intellectually honest and making informed decisions is crucial for every entrepreneurial journey.

12) What is the one personal passion or hobby that you think contributes to your entrepreneurial mindset?

Yeah, it's been a journey of around 12 years, but in the last few years, I've finally started taking myself seriously in terms of fitness. 

In the F&B space, our expert chefs make us try everything and it's high time that we start caring about fitness. 

Beyond a certain age, your ability to think critically and face challenges becomes highly dependent on physical and mental fitness. That's why I've focused on my physical fitness journey in recent years and I'm happy with the overall changes I've been able to achieve. It's something I'm passionate about nowadays and something that keeps me ahead in my journey. 

Additionally, it provides valuable "me time"; in the early morning hours where I often set aside my phone. In fact, while pumping weights, I can find myself solving many interesting problems that seem more challenging to tackle with a fresh perspective. So, it's been a rewarding passion that I've developed over the past couple of years.

13) Finally, how should one cope with the failure of one strategy that you personally use?

I think firstly, going back to that same point of intellectual honesty, at times failures are often viewed with a negative mindset. However, the positive side of failure is realizing that something is not working. 

My tip would be to move on and extract the best learnings from the failure while uncovering the truth. For instance, why did it happen, what need gap wasn't fulfilled for the consumers, etc. 

People often dread failure, which is understandable because success should always be pursued. Yet, without failure, you don't realize what else needs solving or how to move forward. This was evident in Rebel's journey too. 

We faced challenges scaling up so we stepped back and realized that scaling up Faasos alone wasn't enough. We ventured into a multi-brand strategy, but even then building brands posed multiple challenges. 

We learned that not every brand needed to be built from scratch. Instead, some were better onboarded. We attempted to establish our distribution via various dot-com platforms but found our efforts duplicating other platforms not valuable. 

This failure prompted deeper insights, thereby, leading us to rethink our D2C strategies to better address consumer needs. While failures are disheartening at the moment, reflecting on them often helps reveal critical lessons. Lessons that can pave the way for future success.

Key Takeaways:

  • Rebel Foods is the world’s first cloud kitchen that has scaled from a traditional restaurant to a global powerhouse.
  • Purpose-driven branding is exemplified by the creation of brands like Behrouz Biryani that focus on giving a unique consumer experience.
  • The interview highlights the challenges in terms of scaling and brand building that are addressed through Rebel OS and a robust tech architecture.
  • Rebel Foods is piloting eco-friendly packaging and energy-efficient operations in their domain.
  • Intellectual honesty, fitness, and resilience are key in terms of navigating challenges and driving innovation in the F&B industry.
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