Food delivery platform Swiggy is collaborating with select top-rated restaurants including Berco’s Restaurant, Impresario Group, Bar Stock Exchange and Gilly’s among others to co-create exclusive delivery-only brands on its platform, a top executive told ET.
As a part of the agreement, Swiggy promises restaurants that it will share data on supply gaps in the area, closely work with menu designing, packaging, pricing and eventually co-promote the brands on its platform in exchange for exclusivity, a variable consulting commission, and delivery fees. This consulting commission that Swiggy charges range between 5-8%, according to brands that ET spoke to.
“We work closely with these top restaurants, and take joint accountability for the success of a brand launched under this program,” Vishal Bhatia, CEO, New Supply, Swiggy told ET.
These brands operate out of the restaurant partners’ existing dine-in facilities and the brand ownership remains with the restaurant. “This initiative generates roughly 15% additional revenue for us from an existing kitchen facility,” said Kabir Advani, Managing Partner, Berco’s Restaurant who runs House of Chow virtual brand on the platform.
The move comes in at a time when Swiggy has been under the scanner by restaurant partners for running its own private labels which brands argue have an unfair advantage over their operations. It is also considered one of the avenues for the company to scale its revenue without asset-heavy investments.
Swiggy currently has 100 such brands on its platform that were co-created with 95 restaurant partners across 13 cities. The company plans to scale this initiative to at least 300 brands by the end of the year.
“Our kitchens at the dine-in restaurants are fully equipped and run by experienced chefs who are trained in multiple cuisines,” said Gurupreet Singh Bali, Managing Partner, Gilly’s Restobar who runs Kitchens of Punjab delivery only brand on the platform, and one of Swiggy’s first pilot customers. “We realized that growth could come out of negligible additional investment leading to better utilization of our existing resources through delivery,” he said.
As food delivery scales, building supply of delivery-only brands is critical to offer choice at all price points and cuisines. Swiggy has aimed at solving this supply gap with a bunch of initiatives including developing infrastructure for delivery-only brands to operate with a lower capital investment, introducing private label brands, as well as co-launching brands.
“While Swiggy Access facilitates the expansion of restaurant brands across locations, BrandWorks helps restaurant partners expand their brand portfolio using existing kitchen space and culinary abilities,” Bhatia said.
The larger restaurant ecosystem has also been closely working with Swiggy and Zomato to build delivery only brands at the right price point ET had earlier reported. Some of the delivery-only brands include Impresario’s Boss Burger, Hung-Li and Del Italia, Azure Hospitality-incubated Rollmaal and Speedy Chow, deGustibus’ Neel ki Biryani, Indigo Burger Project and the soon-to-be-launched Mandarin Monkey, along with The Olive Group’s Olive Pizzeria.