Among the sectors hit hardest by COVID-19, hospitality is at or near the top of the list.
And with pubs, clubs and restaurants forced to close, food delivery platforms have seen a rise in activity as more people order in.
But it’s a competitive sector, and according to Dhruv Kohli, head of international expansion at Grabox, only around 10 per cent of restaurants are able to successfully crack the market and supplement lost income.
In light of the disruption, Kohli spoke with Stockhead this week about a gap in the existing market Grabox is looking to fill.
With Grabox Kitchens, the company will partner with Australian bars and restaurants to provide an additional distribution channel.
Clients will utilise extra kitchen space, and Grabox will manage branding and analytics for dedicated home-delivery meals.
The company has found some early success with Wattaburrger, a spin-off home delivery brand from one of the company’s Sydney restaurant clients which launched early this month.
“What we’re trying to do is use existing infra that’s unutilised, and help clients build a virtual food delivery model with no change to their overhead costs,” Kohli said. To help illustrate, he used an example:
“Let’s say it’s a Korean restaurant in Bondi. They’ve built a strong brand among local residents. With our model, they can start selling Poke Bowls under a separate home delivery brand.”
“It’s extra income without diluting any brand value from their existing restaurant. And the ingredients are already in the kitchen. So they can bring new brand channels in without any capex.”
Having launched the model with Wattaburrger, Kohli said Grabox has six new clients in the pipeline for the start of next year.
Over the first six months of next year, it wants to expand that to more than 500 kitchens across its existing marketplace networks in Australia and the UK.
And on a broader strategic level, Kohli said the model offers an opportunity to leverage data and AI to bring a higher level of customisation to food delivery.
He cited the example of a restaurant chain such as McDonald’s, where the core Australian menu is materially different to, say, Vietnam (more rice options) or India (vegetarian).
“Instead of separating cuisine on the basis of country, we think it can be done on the basis of suburbs,” Kohli says.
“Through that data, we can learn what people in Bondi prefer compared to say, Parramatta. That’s where the data comes in — meeting unmet customer expectations, and building a consumer-centric platform where all our menus are driven by data and what customers are expecting.”
With a successful scale-up, Grabox will maintain the IP for its suite of home-delivery brands while its restaurant partners benefit from improved scale.
But flagging the company’s early success with Wattaburrger, Kohli said the model also has the potential to integrate directly with its partner restaurant brands, and scale.
“Wattaburrger is performing well — it’s a virtual delivery brand within a 3km radius (of the restaurant),” Kohli said.
“A couple of weeks ago our partner came to us and said this virtual brand is performing — if it performs well, can I combine the brand with my physical store as well?”
“So with support from partners, there’s a very likely chance we can leverage the branding of physical stores without holding a single asset. And that ties in with our strategy to build a capital-light distribution model.”
While its initial target markets are Australia and the UK, Kohli said the company is also eyeing the opportunity to expand to the US.
“Grabox Kitchens is really about connecting with people and building meaningful relationships. After a tough year, we are excited to bring a buzz to our hospitality sector and help it boom again,” he said.