While celebrating a friend’s birthday at a house party, Gautam Balijepalli had his Eureka moment. He realised that few consumers eat cakes in a cake shop; most order it home or as a takeaway delight.
This insight inspired him to launch WarmOven in 2013 from a small kitchen in Karnataka’s Domlur district along with Mahesh Madiyala, Sumit Gupta, and Rohankumar Rao. The aim was simple – deliver cakes across Bengaluru.
“Back then, this model wasn’t called a ‘Cloud Kitchen’; it just evolved into one,” he recalled. “Along the way, food delivery aggregators became big, and we started to sell on those platforms too. Our business model was always the same – generate orders through online platforms and fulfil through the nearest kitchen.”
Having bootstrapped the business for the first five years, by 2019, the quartet discerned there was an enormous potential to create a portfolio of delivery-led food brands. After all, millions of customers were hooked to ordering food online daily, but there weren’t many nationally available food brands.
“We already had kitchens and realised that we could add additional brands or categories to continue improving the utilisation of these kitchens. That led to the expansion into newer categories,” Gautam explained. Since they had already covered desserts with WarmOven, they decided to get into other fast food varieties, like burgers.
TOUGH NUT TO CRACK
However, this enterprise was no cakewalk (pun unintended). For starters, the young entrepreneurs did not know how to standardise newer categories like burgers or milkshakes. But, they gradually learnt it through several trials and errors, and today their burger brand operates on a centralised supply chain on standardised recipes.
“We had to build this supply chain to cater to our kitchens nationally. We innovated on packaging for burgers, fries and rolls to ensure that food remains hot at the time of delivery,” Gautam stated. “We added Rolls and Wraps as a new category by acquiring a legendary brand ‘Kaati Zone’.”
Their major realisation over the years was that the best delivery brands offer delicious food and a quality experience by connecting with customers 30 minutes away. This became an integral part of their product innovation along the way.
BETTING ON TECH
Kouzina invested heavily in its proprietary technology platform, internally called Kouzina Admin Console (KAC). Often called the nervous system of the company’s operations, it connects the corporate office with all the kitchens, powering all the brands and pan-India operations.
KAC collects data from multiple sources, including the website, reviews and ratings from aggregators like Swiggy and Zomato. It can schedule deliveries for the brand’s channel, monitor key operating metrics like preparation time, and track staff attendance in the kitchens. It also provides data and analytics on products and all other aspects of running the business.
Elaborating on this, Gautam said that every order is tracked in real-time and feedback on every customer order is monitored, and action is taken immediately. “Key operating metrics, like preparation time of various products, stock-outs and customer ratings, are measured and improved in real-time,” he explained. “All recipes and SOPs are digitised and available online to every single staff member across all the kitchens.” By leveraging all of this data in its operational processes, Gautam claimed that Kouzina is creating a strong culture of continuous improvement, which would set it apart from its competitors over time.
TAKING A LOT ON THE PLATE
Over the years, Kouzina set up several brands, including WarmOven, Indiana Burgers, Kaati Zone, Cupcake Bliss, and Dessert Zone. This is because it wanted to create the future of restaurants tailored for delivery. It started with cakes and then leveraging data; the company expanded into categories accepted across the country with limited regionalisation or customisation.
“We wish to create the most loved food brands in categories that customers prefer to order online. We are now adding additional categories based on the insights we can generate from the data we have on food delivery at a micro-market level,” Gautam elaborated.
Around 50% to 60% of Kouzina’s business today is from its bakery and desserts category coming from brands like WarmOven and CupCake Bliss etc. This is fast changing as it adds other types like Momos and biryani.
The Kaati Zone brand came through an acquisition, and the company sees an opportunity to add other brands through partnerships and acquisitions. It plans to scale up its network of kitchens with several local solid or regional brands.
Currently, Kouzina has 55 kitchens across 15 cities across India, catering to millions of customers. “There is an opportunity to launch kitchens in almost 3000 micro-markets,” Gautam stated. “Within 24 months, we want to launch 500 kitchens, and the large majority would be through our kitchen partner model of digital franchising called Kouzina Kitchen Partners. We already have hoteliers who are part of our network and are running our brands from their locations, seeing the potential of its digital brands.” Talking about why they are opting for this model, he stated that sporadic guest orders for room service or inconsistent food experience or lack of variety in food are significant challenges faced by hotels.
Not only can the underutilised space and staff be channelled towards running a delivery brand, but also the same products be utilised to provide variety, quality and consistency to guests who order room service. And they can be done without any additional investments.
Each of Kouzina’s kitchens caters to a 3.5-4km catchment area. In every city, it will have multiple such kitchens to cover all the existing demand. For example, it has 22 kitchens in Bangalore, which addresses most of the city’s requests. This collaboration presents a win-win prospect to both parties. Hotels can make extra revenues by delivering orders and having a better in-room service experience. Kouzina, on the other hand, can expand into new geographies.
