Brick & Mortar to Brick & Click: Kaykroo Founder Jihad El-Eit on shifting to a cloud kitchen model
UAE-based Foodtech startup kaykroo recently raised $4M in a Pre-Series A funding round, from family offices and regional investors. The startup will be shifting away from ‘brick & mortar’ to ‘brick & click’, with existing restaurants launching as cloud kitchens.
Last month, we shared an article that shed light on the recently funded cloud kitchen startups, with kaykroo being one of the startups listed. However, how aware are you of how cloud kitchens really work and the tech that they use? To that effect, we caught up Jihad El-Eit, Founder and CEO of kaykroo to discover in simple terms, how the startup works, how they shifted away from traditional F&B methods, if reinventing the brand came with any challenges, the role that AI and machine learning play, and more.
How does the kaykroo platform work?
To put it simply, we are a digital marketplace for home-grown F&B brands. The same way you would go on Amazon to buy books, or ASOS to buy clothes, kaykroo is where you go to order the meals to satisfy your cravings.
Our network of more than 15 cloud kitchens across the UAE allow customers from virtually anywhere in Dubai, Abu Dhabi, Sharjah and Al Ain to order from any of our ten different restaurants, conceptualized by our research and innovation team, through our website, call centre or any of our delivery partners.
What makes us ‘digital’ is the tech that’s integrated into every step of the food ordering and delivery process. Customers are our number one priority, and it’s really important that anything we do creates the best possible experience for them – from variety of choice, to quality and freshness, and of course accessibility.
Your existing restaurants will be launched as cloud kitchens, as you move from 'brick & mortar’ to ‘brick & click’. Is this a technically complicated process? Can you share how you will implement this?
Moving from dine-in restaurants to a cloud kitchen model simply means that we can now focus our resources on creating an incredible delivery and takeaway experience for our customers. We are essentially digitizing the ‘front of house’ element through a user-friendly interface while investing in the right tech to make the ‘back of house’ functions more lean and efficient.
But the offline element is just as important as the online. All the major tech companies have recognised this – whether it’s Amazon, Apple, or Microsoft, although they’re constantly introducing new products, they’re simultaneously creating physical locations that allow you to get closer to the brand. Similarly, we haven’t forgotten about our customers who want a more tangible experience, and are maintaining a ‘brand residence’ for each of our concepts, in the form of a pop-up or kiosk, that people can still visit if they want to really interact with the brand.
Did 'reinventing' kaykroo come with any challenges? E.g. have you had any issues with user behaviour?
Not at all. kaykroo operates in the background, so the brands that consumers interact with and order from – such as Manou’she Street, Wrapped, The Good Bowl – remain the same. It just so happens that the food from all ten of our portfolio brands is cooked in centralised kaykroo kitchens. If anything, our operations have adapted to changing user behaviour, so the transition has been pretty seamless.
Did the COVID-19 crisis lead to this decision or accelerate the change?
We actually began developing the kaykroo concept in January 2019, when we started witnessing a global trend towards delivery and cloud kitchen networks. It was the right time for us to build on the legacy of our portfolio brands, some of which have now been operational for over a decade, and explore how we could expand our reach. Of course, the general trend we’ve seen towards delivery over the last nine months has reinforced our decision and made it clear that this really is the future of Quick Service Restaurants.
What tips would you give to ‘brick & mortar’ restaurants who may be struggling in such a climate?
It might be a challenging time for dine-in restaurants but I believe it’s times like these when you should take the time to not just focus on short-term contingency plans but to make a decision on where do you want to be in the next three years. Thinking long-term will push you to analyse your brand and operations, and identify the sweet spot that can help your concept grow and flourish.
How important is tech to the F&B industry? Do you believe it can be used to innovate rather than simply implement?
I believe tech is important to any industry – but in the case of F&B, yes it can definitely help to drive innovation. For example, one of the things that set kaykroo apart is that we create and fully manage our own brand experiences from A-Z, rather than providing a facility for third party restaurants to use. This means the data-driven insights we gain, whenever an order is placed from any of our brands, are incredibly valuable in helping us understand customer preferences. Based on this, we can develop new concepts that cater to what people want and how they want it.
For those who may not be familiar, how can AI and machine learning be applied to cloud kitchens?
AI and Machine Learning can be the key to really speeding up any process – and when time is of the essence in the level of service you provide, it can be a game-changer. In our case, machine learning is vital to enhancing the customer experience based on their order history. It can help us direct customers to menu items we know they would enjoy and offer discounts based on timing and location.
It also allows us to predict and prescribe based on trends, so if we know that particular brands or menu items are popular on certain days of the week or times of the day, we can dynamically manage our resources to accommodate that peak in demand.
What are your hopes for the future of the F&B industry post-COVID-19?
COVID-19 has been a learning curve for all of us. My hope is that we can take these learnings and build on them, especially when it comes to customer experience.
Eventually, we will one day be able to go out and enjoy restaurants in the same way we used to, but this year has shown us that it’s equally important to try and create those same experiences at home and hopefully the F&B industry will find ways to continue making that a possibility.
Can you share some of kaykroo's short-term plans for expansion with us?
In terms of physical expansion, we are already a large cloud kitchen network with own home-grown brands in the UAE, so next, we are looking at the broader GCC region, namely Saudi Arabia as a first step. But for us, expansion isn’t just limited to new geographies, we’re growing our portfolio with ten additional concepts in the pipeline, that we’re going to roll out over the next six months.
We also have a couple of really great initiatives in the pipeline that we’re going to announce in 2021, so stay tuned!
Finally, what advice would you give to yourself 5 years ago?
I’d tell myself to really think about what makes us unique because this is one of our biggest strengths. The key is to bring this to your core and stick to it, refine it, master it, and build everything else around it. Understanding this five years ago would have accelerated our transformation journey by at least three years.
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