ITC, a name synonymous with diverse business ventures, is set to elevate its presence in the food-tech industry by expanding its cloud kitchen business. This innovative move comes as the conglomerate identifies food-tech as a key growth vector. Currently operating in Bengaluru and Chennai, ITC's cloud kitchens have become a preferred choice for North Indian daily and gourmet cuisines, as well as bakery products.

The company's foray into the cloud kitchen landscape is marked by three distinct brands: ITC Aashirvaad Soul Creations for daily comfort food, ITC Master Chef Creations for gourmet delights, and ITC Sunfeast Baked Creations for bakery treats. With 19 cloud kitchens in Bengaluru and four in Chennai, ITC has already achieved the milestone of breaking even in these locations.

Hemant Malik, Executive Director at ITC, shares insights into the success of the venture, citing a winning formula that includes established brands, cuisine expertise from ITC Hotels' chefs, and the backing of the packaged foods business. "The tech-learning needed for the business comes from our focus on digitalization," adds Malik.

The business model involves the establishment of a central kitchen and satellite kitchens in cities where ITC operates. This strategic layout aligns with the preferences of food delivery giants like Swiggy and Zomato, who prefer kitchens every 2.5-3 km. ITC aims to replicate its success in Bengaluru by becoming a market leader in the premium space in other cities.

"We are already the market leader in Bengaluru in the premium space within two years of operation and will now scale up in other cities," says Malik. The cloud kitchen central kitchen in Bengaluru has the capability to service both Chennai and Hyderabad, showcasing ITC's commitment to operational efficiency.

Going beyond its current offerings, ITC plans to diversify its cloud kitchen menu by evaluating the addition of breakfast and oriental cuisines. Malik emphasises the company's strategy to introduce new cuisines and meals alongside expanding its presence in metro cities.

Noteworthy is the fact that ITC's cloud kitchens boast an average order value of Rs 900, double that of the industry average. The key differentiators from ITC Hotels' kitchens include a 5% Goods and Services Tax (GST) compared to 18% for hotel restaurants, and a focus on quick service.

In an investor presentation, ITC highlighted the institutional synergies between its cloud kitchen business and other segments, such as packaging solutions, digital-first approaches, and culinary expertise. With over one million orders already delivered, ITC aims to capitalise on the 10% market share occupied by cloud kitchens in the food delivery platform landscape.

However, the presentation also acknowledged challenges, particularly the scalability issues associated with North Indian cuisine due to its dependency on chef skills and the lack of standardisation. Nevertheless, ITC's strategic approach and commitment to innovation position it as a formidable player in the evolving landscape of the food-tech industry.