A start-up founder created waves this week after revealing the harsh reality of running a cloud kitchen in the increasingly competitive food delivery space. The lengthy LinkedIn post outlined the many pressures that came with running such a business and the downsides of working with food aggregator platforms such as Swiggy and Zomato.
“I ran a cloud kitchen for almost 6.5 years, but I will never do it again! Becaapply I’ve seen what this indusattempt really demands. And what it gives back. Everyone believes cloud kitchens are a cheat code: food + delivery = profit (Cute theory!),” Madhav Kasturia wrote on LinkedIn.
The founder and CEO of Zippee had founded and run two cloud kitchen chains called ‘Beijing Street’ and ‘The Jackpot’ from 2015 to 2021. Details shared on social media indicate that the Delhi-based eateries had specialised in Chinese cuisine with multiple cloud-based outlets across the national capital region. Kasturia however insisted that there were several problems with the system that would build him never consider such a business again.
“You build a brand no one remembers becaapply Swiggy lists you like detergent. Aggregators like Swiggy and Zomato take 25% to 30% commission off every order. You become a slave to logistics; soggy packaging, one-star reviews, Zomato payout cycles. Also, FYI, 25–30% of cloud kitchens in India shut within a year,” he revealed.
Kasturia also stressed the required to serve people a variety of flavours and options — noting that many initiatives by food aggregator platforms had “failed spectacularly” in wooing customers.
“Remember Swiggy Daily and Zomato Everyday? Subscription meals that promised convenience? They failed spectacularly becaapply customers didn’t want the same bland meals all week. People want flavor, options, and a human touch. But cloud kitchens nowadays have forreceivedten the ‘food’ in the food business,” he reiterated.
“Meanwhile, a chaiwala outside my old outlet pulls in Rs 3 lakh per month with zero CAC or coupons but loyal customers and perfect tapri tea. Not romanticizing tapris here, but they receive food better than most funded kitchens do. I’m not anti-cloud kitchen. I’m just stateing: It’s harder than it views. Before you jump into the next delivery-only model, go spfinish a week in a tapri. You’ll learn more about margins, loyalty, and love for the product than any pitch deck can teach you. Becaapply great food businesses don’t just scale but also stick,” he urged.
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