As the company prepares to move its focus to its private label entities in southern towns, the online food delivery platform Swiggy has discontinued its cloud kitchen locations in the Delhi National Capital Region (NCR), such as The Bowl Company (1).
Swiggy has confirmed that The Bowl Company, located in various sections of Delhi and Noida, will be closing down. Swiggy referred to the first launch of The Bowl Company as an "experiment."
At the very least, the entity continued to function until the first week of November this year. Some of Swiggy's other cloud kitchens in the Delhi-National Capital Region, including Breakfast Express and Goodness Kitchen, have closed their doors. The Bowl Company is one of these cloud kitchens.
"Bringing new eating experiences to users was the goal behind our decision to expand The Bowl Company into Delhi and the National Capital Region. While we continue to concentrate on achieving operational excellence for the brand, this experiment has provided us with the necessary learnings," as per a company spokesman for. "We will continue to develop and grow The Bowl Company in places like Bangalore, Chennai, and Hyderabad," the spokesperson said.
Focus on South India
Swiggy is reportedly considering concentrating its cloud kitchen business in southern cities such as Bengaluru and Chennai, which are located in regions of the country where these types of operations have been more widespread than in northern cities. The company is also introducing several new private labels in these locations, such as Soul Rasa and Stuffed in Bengaluru and Chennai.
Food delivery platforms are largely responsible for popularizing the concept of cloud kitchens. They use a professional kitchen to prepare meals for delivery or takeout, and they do not accept dine-in clients.
As a result, they can provide delivery services at a higher margin than the other restaurants featured on their site. In the beginning, the market was successful in India; however, when the COVID-19 pandemic began, the novelty of these restaurants began to wear off because every restaurant essentially became a cloud kitchen.
Swiggy has decided to close down some of its cloud kitchens in the past, so this is not the first time it has done so. In 2020, in the thick of the coronavirus pandemic, the company laid off more than one thousand staff and shut down many of its cloud kitchens (2).
"We have decided to reduce our footprint in related businesses that will either experience high levels of volatility or will not be very important over the next 18 months. "The biggest impact here is on the cloud kitchens business, with numerous unknowns concerning volumes over the year," Swiggy co-founder and chief executive Sriharsha Majety had said in an email to workers at the time. The communication was sent when the news first broke.
According to the regulatory documents that Swiggy has submitted, the food sales from Swiggy's proprietary brands fell by more than 60 percent during FY21 to a total of Rs. 83.3 crores, down from Rs. 237.1 crores during FY20.
In a previous post, Majety brought attention to the pandemic's effect on Swiggy's cloud kitchen company.
"We had just finished a rollout of the 120th kitchen when the announcement was made. These things require a significant amount of capital expenditure (CapEx), and then all of a sudden, boom, bang, and smack, we found ourselves in the heart of Covid in February and March. "And, that without a doubt seemed like the worst mistake in the history of investment," he had declared the previous year when speaking at a technology conference.