Comment by nishantnino | Hacker News Reader

Comment by nishantnino | Hacker News Reader

Hi we're Nishant and Pranav of Nino Foods, which creates and operates cloud kitchen brands in India focused on the premium market. Food Delivery in India has an average order value (AOV) of 4$ vs the U.S which is >30$. This makes it hard to run a profitable food delivery business In India. Our brands target the customers in India that order food above 7$ - which accounts for 50% of industry revenues and a majority of industry profits. This segment has 2.5 times more profitability, and stickier customers with higher expectations.

We launched 11 months ago by acquiring a Pizza chain in Mumbai-Francesco's Pizzeria, which had closed 5 out of its 6 restaurant locations and was running on fumes because of covid. We acquired the 1 active location along with the brand rights and converted it to delivery only. We set up a new brand-Nino Burgers , mostly to prove to ourselves that we could build a successful food brand from scratch.

We use hyperlocal data like - unfulfilled search engine queries on delivery platforms, highest selling menu items in nearby restaurants and highest selling toppings - to drive menu and pricing decisions. In the last 11 months we've understood how to grow sales on delivery platforms and we have designed kitchen layout, operations and SOP's to improve metrics that drive visibility on them.

Contrary to the negative sentiment shared by lots of restaurants in India toward platforms because of their 25% take rate - we have a Pro-Swiggy/Zomato attitude . These platforms make 3 times more money on orders through us than via brands with lower average order values. This aligns our incentives with them and gives us access to better data to grow and lower commission rates. Nonetheless, We still do 20% of our business via our direct channel which helps us understand customer preferences deeper and track loyalty.

We want to build category leading brands in food. A person orders food delivery 5 times a month in India. Our aim is for 4 out of those 5 orders to be coming from one of our brands.

https://linktr.ee/ninofoods has our instagram pages and an ordering website. We'd love to hear any thoughts, feedback and curiosities!

Congrats on getting an actual business out of the ground!

A few comments :

- On your delivery website, the first step is to choose a city, but you operate just in mumbai, so I can just select mumbai. If you could remove this choice before you open in new cities, it will make the flow of ordering one step shorter. It will also allow you to better market your local brand as the wording could be : order a burger in mumbai, ....

- The pizza ordering page offer images of the items to order, the burger page does not. Is it a deliberate choice? When ordering food I generally don't choose from unknown shop with no picture (but it's maybe a cultural difference as I am not based in india).

- You are operating on top of platforms (Swiggy/Zoomato), that can decide to move into the black kitchen business. Your only edge against that seems to be your brand, what are you doing other black kitchen are not doing to ensure that your brand get strong enough?

-good point, the direct channel website we have is built using a third party service so its not customisable. The plan is to set up our own platform where we can fully customize the flow and sell food from all our brands in a single order in the near term. Right now focus is on creating the best food.

-nope youre right , pictures are crucial in driving purchases, we'll fix that.

-interestingly Swiggy already moved into the business 2 years ago via a service called "Swiggy Access" where they created their own brands based on data. But it didnt work and they shut down all locations to shift focus back to their core business -logistics. In the longer term we plan on building brands with strong enough customer repeat rates to drive traffic to our own app/website and creating offerings exclusively available on our direct channel to reduce platform dependance.

First off, congrats on your venture! as a foodie I'm elated.

I realize that you're trying to create your own brand, my concern is:

- if it's a brand that does all cuisines, it is going to attract people mainly because of the price point, and not uniqueness

- if the idea is to build multiple brands, one each for a specific type of food: a brand for Pizza, another for Biryani, etc., then scaling each is its own demon

please correct me if I'm not understanding it right.

On a side note,

> But it didnt work and they shut down all locations

Do you have any knowledge of why it didn't work? I have a few thoughts around this, and have discussed this with a friend who's a restaurateur, but would love to hear from you!

-we're creating multiple brands -each with their own identity. The common thread is premium. Target customers are restricted to those in a 10km radius of a kitchen. Aim is to build customer wallet share by understanding our set of consumers well and serving food to them across different food missions - meal to go , family meal, light meal, cheat meal. Efficiency comes as we consolidate the supply chain and infra at scale

-they scaled too fast because it would not have moved the needle for a company of their size otherwise. and its difficult to build brands customers truly love if speed and scale is the main focus imo, we focus on depth first, then breadth. -would love you hear your views too

Not the guy you are replying too, but the strategy does seem to have parallels to D Mart growth strategy vs Big Bazaar(Future Retail) .

interesting thought!

Would you be willing to share how much you acquired the pizza business for?

was not a cash deal. We paid x% royalty out of revenues for a year and gave the founder a small piece of our new co

Very interesting. Would you also share how does one discover such opportunities? I presume there's no marketplace for these things. Do you have to be in the industry and rely mainly on network connections or are there other means?

entirely network driven for the ones with high conversion imo

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