ITC Launches 12 Cloud Kitchen Set-ups, 48 Brand Outlets

KOLKATA – Eyeing a pie in the growing food tech industry, diversified conglomerate ITC Ltd has set up 12 cloud kitchens and 48 brand outlets, in a bid to add a potent revenue stream for the future.

• Drawing synergies from its food and hospitality verticals, the company has set up a string of cloud kitchens dotting Tech City, Bengaluru, dishing out quite a fare–from Whole Wheat Paratha Kathi Rolls to Afghani Biryani and Pull Apart Bagels.

• With the products getting traction on food delivery platforms, the pilot is now waiting to take the next leap. “The product-market fit has been established. The next phase is to set up the technology stack, processes and systems for scaling up and we will look at expanding beyond Bengaluru in a phased manner,” ITC chairman and managing director, Sanjiv Puri said.

• A call is likely to be taken by the end of the year, but it’s a journey that could happen in a short period of time.

• Institutional synergies are at play here – the cuisine expertise of the hotels business is combined with brands and capacity of the foods vertical to achieve scalable solutions.

• Incidentally, Master Chef, Sunfeast and Aashirvaad are brands under ITC’s packaged foods segment.

• Master Chef offers frozen snacks, cooking pastes while Sunfeast has a range that straddles between biscuits and cakes to noodles and pasta; Aashirvaad is the company’s top brand with staples, dairy and instant meals under its fold.

• With the market potential, ITC is looking at food services and cloud kitchen as a serious revenue stream.

• Sources pointed out, from an industry size (GMV – gross merchandise value) of less than Rs 1,000 crore in 2015, as per reports, the food-tech industry has reached a size of Rs 35,000 crore and is expected to touch Rs 70,000 crore in the next five years.

• In Bengaluru, the number of cloud kitchens can be enhanced from 12 to 18-20; the idea is to service every viable area by one of ITC’s kitchens. The logical extension could then be to expand in proximal markets in the South. Or, it could be a different region to test waters. And multiply operations thereon.

• The brand portfolio consists of ITC Master Chef Creations (premium North Indian), ITC Sunfeast Baked Creations (gourmet bakery and desserts), ITC Aashirvaad Soul Creations (wholesome and everyday goodness brand) and Biryani Creations by ITC Master Chef. Across the 12 cloud kitchens, there are 48 brand outlets now.

• The concept evolved during the Covid lockdown, which gave the food tech space legs, and the tobacco-to-hotels major seized the moment. It started small – a pilot from the ITC Windsor hotel in Bengaluru and the corporate office, Green Centre, which houses the foods division, and then separate cloud kitchens were set up. There are about 12 kitchens now, most of which were started this year.

• New opportunities

• “One of the key levers of the ITC Next strategy is to identify new opportunities that lie at the intersection of digital, sustainability and our enterprise strengths. ITCMAARS, sustainable packaging and food tech are three such areas that have been identified,” Puri explained.

• The platform provides farmers with AI/ML driven personalised and hyperlocal crop advisories, access to good quality inputs and market linkages as well as allied services like pre-approved loans.
• “Agriculture and allied sectors are estimated to be a Rs 35 trillion industry and offer immense potential. ITC can make a big play in this segment. It’s an area where we have a right to win,” Puri said.. “With our domain knowledge in agriculture and our deep relationship with farmers, we have a complete ecosystem to build this. It plays to our strengths,” he added.
• ITCMAARS will open up new revenue streams for the growing agribusiness. Launched in April, it has already generated revenues of a few hundred crores. The scale-up so far: 460+ FPOs in nine states with about 180,000 farmer registrations till date. The other piece – sustainable packaging – will add to revenues of the paperboards, paper & packaging vertical.
• “Sustainable packaging is an evolving segment with the world moving away from plastics. We have already launched a range of solutions in the market. We are leveraging the capabilities of the ITC Life Sciences and Technology Centre (LSTC) as well as global collaborations to develop a range of innovative solutions,” Puri said.
• The LSTC in Bengaluru is at the core of driving innovation to support ITC products and brands. And yet another model, on the back of its research, ‘Sleep Boutique’, is being tested at some of the ITC hotels.
• The Sleep Boutique is being piloted at some of the ITC Hotels based on the extensive work done over the years at the Sleep Lab in ITC Life Sciences and Technology Centre (LSTC), Puri said.
• The offerings are being retailed only through the boutiques in hotels and the proof of concept is being carried out. “Once we establish the product market fit, we will scale up,” Puri added.
• The diversification gambit of the tobacco major that started many decades back is on to its next level with food tech, ITCMAARS, et al.
• ITCMAARS is an integrated ‘phygital’ ecosystem, embedded with a full stack agritech platform with farmer producer organisations (FPOs) as the pivot.