When I quit RedDoorz in September 2019, little did I know I would end up in the food industry a little more than a year later. But as I was working on another hospitality company in the US back then, COVID-19 hit New York and all plans for that venture were dashed.
After some soul-searching amidst the lockdown, I came up with the beginnings of what would become Dishserve, and came back to Indonesia in October of 2020 to turn the idea into reality.
Simply, Dishserve is a network for ghost kitchens helping F&B brands reach customers faster and more efficiently. You might say — isn’t that just another cloud kitchen business?
The pandemic has brought on a wave of these with the increased demand for home deliveries, and certainly, that’s part of what led me to close in on this idea. But with Dishserve, there’s more than what meets the eye, and I didn’t want to settle for what other players were already doing
Why stick to a two-sided platform when you can be a three-sided marketplace creating livelihood opportunities for homeowners. While we use home kitchens for operations, the catch is that we do not actually own or operate any of these kitchens. These kitchens are fully operated by the homeowners.
Whereas other players own their kitchens and become a two-sided platform between F&B brands and customers, we also thought about the kind of value we could give to micro-entrepreneurs who cannot afford to go out to work, like stay-at-home moms or recently unemployed individuals.
By working as a home kitchen in the Dishserve network, they are able to make up on average up to US$600 in additional income per month which is 2.5 times the minimum wage in Jakarta. Apart from enabling livelihood opportunities for homeowners, Dishserve also benefits as a business from reduced costs of operation.
The typical cloud kitchen business would aggregate both the mid-mile (food processing, cooking, production) and last-mile (heating, packaging, delivery) segments within the same location, and this can be costly as renting space to cover all these is not cheap.
By decoupling the mid-mile operations and last-mile distribution, letting the brands take care of the mid-mile objectives and the homeowners and platforms such as Grab, Gojek take care of the last-mile distribution, we act as a network for F&B brands to expand their customer base without interfering with or potentially compromising their food quality and consistency.
This means that the homeowners we work with only have to heat, assemble, and package the food before delivering them to the customer. So our app helps the homeowners manage this entire operation–from inventory, orders, invoices, and audits– in one place.
The kitchen audit feature on this app also allows us to maintain the quality and performance of this process. The homeowner/kitchen operator has to periodically send photos and videos of their kitchen and these submissions are moderated by our team. We also collect reviews and customer feedback, so that even if we are mostly hands-off on how the homeowners run their kitchens we are still able to maintain a level of consistent quality.
Through this three-sided marketplace approach we are hitting multiple birds with one stone: enable hundreds of individuals to turn their home kitchens into ghost kitchens, expand the last mile distribution and customer base of F&B brands, bring faster and lower cost deliveries to customers, and also develop a less costly and more profitable approach to the typical cloud kitchen model for Dishserve.
Why keep it fixed when you can make it flexible for F&B brands to grow
But apart from homeowners fully owning and operating their kitchens, there’s another catch. When it comes to working with F&B brands, we do not charge any fixed monthly operational costs. Our monetisation is all through revenue sharing.
We decided to go this route because we wanted to make it easier for F&B brands to expand without a fixed operating expense, especially with the economic difficulties of operating in the pandemic.
When brands expand they typically incur fixed costs like rent, manpower, electricity, renovation, and by working with Dishserve, they don’t have to pay a single dime for all this, primarily because they are working with our home kitchen network
It also brings benefits to Dishserve as well. By enabling F&B brands to expand and work with more home kitchens in our network, we are also able to reach more customers with them and the amount we share with them also increases.
One can think of it as a flexible model that allows us to work with the ups and downs that come with operating in the F&B industry while also rewarding our business as we grow the network of F&B brands and home kitchens rather than depending on fixed revenue streams
It’s all about enabling growth
And these decisions where we deviated from the typical cloud kitchen model have paid off for Dishserve. We’re able to maintain positive unit economics and make money on every transaction.
The best part is that we work with some of the most prominent restaurant and catering brands as well as two leading cloud kitchens companies, strengthening their last-mile distribution with the 100+ kitchens in our network across Jakarta and the National Capital Region.
So with our approach to cloud kitchens — these catches I’ve mentioned — we’re not just making deliveries more efficient for customers, but also supporting the growth of F&B brands and the livelihood of homeowners across Indonesia
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