Cloud kitchens are already aimed at reducing the infrastructure load on food and beverage brands by providing them with centralized facilities to prepare meals for delivery. This means that the onus is on cloud kitchen operators to ensure they have enough locations to meet the demand of F&B customers, while ensuring timely deliveries to end customers.
The Indonesian DishServe network has found a way to make cloud cooking networks even lighter. Started by the former COO of RedDoorz, the budget hotel startup, DishServe is partnering with home kitchens instead of renting or buying its own facilities. It currently works with nearly 100 home kitchens in Jakarta and focuses on small to mid-size F&B brands, serving as a last mile delivery network. Launched in fall 2020, DishServe has raised an undisclosed amount of pre-seed funding from Insignia Ventures Partners.
DishServe was founded in September 2020 by Rishabh Singhi. After leaving RedDoorz in late 2019, Singhi moved to New York City, intending to launch a new hotel startup that could quickly convert any retail space into member clubs like Soho House. The fledgling company had already created pre-fabricated parts samples and was on the verge of starting renting goods when the COVID-19 lockdown hit New York City in March 2020. Singhi said he had embarked on a ” soul search ”for a few months, deciding what to do and whether to return to Southeast Asia.
He realized that since many restaurants have had to switch to online orders and delivery to survive the pandemic, this could potentially be an equalizer for smaller F&B brands competing with bigger players, like McDonald’s. . But the closures meant many people had to choose from a limited range of restaurants close to where they lived. At the same time, Singhi saw that there were a lot of people who wanted to earn more money, but couldn’t work outside of their home, like stay-at-home moms.
DishServe was created to connect all three sides: F&B brands who want to grow without spending a lot of money, home entrepreneurs and diners hungry for more food options. Its other founders include Stefanie Irma, an early employee of RedDoorz who served as Country Manager for the Philippines; serial entrepreneur Vinav Bhanawat; and Fathhi Mohamed, who also co-founded the Sri Lankan on-demand taxi service PickMe.
The company works with F&B brands which typically have between one and 15 retail outlets and want to increase their deliveries without opening new outlets. DishServe’s customers also include cloud-based kitchen businesses that use its home kitchen network for last mile distribution to expand their delivery coverage and catering services.
“Brands don’t have to incur any upfront costs, and it’s also a cheaper way to distribute because they don’t have to pay for electricity, plumbing and stuff like that,” Singhi said. . “And for the agents, it gives them a chance to make money from home.”
How it works
Before adding a home kitchen to its network, DishServe selects applicants by asking them to submit a series of photos, then performing an in-person verification. If a kitchen is accepted, DishServe upgrades it to have the same equipment and functionality as other home kitchens on its network. The company covers the cost of the conversion process, which typically takes around three hours and costs $ 500, and retains ownership of the equipment, taking it back if a kitchen decides to stop working with DishServe. Singhi said DishServe is generally able to recoup the cost of a conversion four months after a kitchen is put into service.
Home kitchens begin by serving DishServe’s own white label brand on a trial basis before it opens to other brands. Each can serve up to three additional brands at a time.
One important thing to note is that DishServe home kitchens, which are usually run by one person, do not actually cook any food. Ingredients are supplied by F&B brands, and home kitchen operators follow a set of standard procedures to heat, assemble and package meals for pickup and delivery.
DishServe ensures that standard operating procedures and hygiene standards are maintained through frequent online audits. Agents, or kitchen operators, regularly submit photos and videos of kitchens based on a checklist (i.e. food prep area, floors, walls, hand washing area and inside their freezers). Singhi said about 90% of its agents are women between the ages of 30 and 55, with an average family income of $ 1,000. By working with DishServe, they typically earn an additional $ 600 per month once their kitchen is running at full capacity with four brands. DishServe monetizes through a revenue sharing model, charging for F&B brands and sharing that with its agents.
After joining DishServe, F&B brands choose which home kitchens they want to work with, then distribute ingredients to the kitchens, using DishServe’s real-time dashboard to monitor inventory. Some ingredients have a shelf life of up to six months, while perishables, like produce, dairy, and eggs, are delivered daily. DishServe’s “starter pack” for integrating new brands allows them to choose five kitchens, but Singhi said most brands typically start with between 10 and 20 kitchens so they can deliver to more places. in Jakarta and save money by preparing bulk meals.
DishServe plans to focus on growing its network in Jakarta at least until the end of this year, before expanding to other cities. “One thing we are trying to change in the F&B industry is that instead of a highly concentrated and centralized food business like what exists today, we are decentralizing it by allowing micro-entrepreneurs to act as a distribution network, ”Singhi said.