Massive Restaurants' Cloud Kitchen Business To Double Within 12 Months, Offline Business To Register 20% Growth

Food—it is what Zorawar Kalra, founder of Massive Restaurants lives for, figuratively and literally speaking. It is a legacy he inherited from his father, Jiggs, an eminent restaurateur, TV host and culinary author. The junior Kalra has also emerged as one of the better-known culinary figures in the country, having made appearances on Masterchef India as a judge and showing his killer moves on Jhalak Dikhhla Jaa.

However, his heart lies in making Indian food resonate with Gen Z by presenting it as contemporary cuisine that need not burn a hole in their pockets. He launched Massive Restaurants in 2013 with three experiential Indian cuisine chains, which he has augmented over the years, keeping his pulse on the changing diner preferences.

At a time when there has been a proliferation of cloud kitchens and delivery-centric concepts tailored to meet the growing demand for convenience and on-demand dining experiences, the business management graduate from Boston is pushing the envelope to ensure that his company, Massive Restaurants, can hold its own.

The hospitality company, which currently owns and operates restaurants like Masala Library, Pa Pa Ya, Farzi Café, Slyce, Bo-Tai and Younion, focuses on theatrical dining experiences that can light up a diner’s social media and also tantalise their tastebuds. At the same time, it is investing heavily in its cloud kitchen network.

A 2023 report from consulting firm Wazir Advisors projected significant growth for the Indian cloud kitchen market, forecasting a compound annual growth rate of 24 per cent. By fiscal year 2026, the market is anticipated to soar to $1.9 billion, almost double its estimated value of $800 million in fiscal year 2022.

Currently, the company has cloud kitchens in five cities across India and it aims to increase this to 12 in the coming few years. “The success of our cloud kitchens highlights their importance to our overall business model, as they currently generate a significant 40% of our total revenue. Looking ahead, we expect this number to double in the coming year, solidifying their position as a major driver of our growth,” Kalra stated.

Massive Restaurants has three brands currently in the cloud kitchen arena—Louis Burger, Slyce and NFC, while Pa Pa Ya and Farzi Café are its restaurant entities. Currently, Louis Burger is the highest contributor to its cloud kitchen revenue chipping in approximately 75% of the total turnover.

Kalra expects the company’s cloud kitchen business to double in the next 12 months and offline business to have 20% growth. “Amongst restaurants, Farzi Café is the highest contributor with approximately 70% of the system-wide sales,” he added.

The company claims to be experiencing growth across domestic and international markets. In India, it has 40 restaurants that are a combination of company-owned and franchised establishments. It is also expanding its global footprint, which currently stands at 10 restaurants in eight countries.

Currently, overseas operations contribute 30% to 40% of its system-wide turnover, which includes revenue from franchise stores. “We have seen a robust growth in our overseas operations. Some of our restaurants are doing very high numbers because of the dollar-rupee ratio and as a result, are significant contributors to our overall system-wide (company-owned and franchise stores) top line. Some of our American, English, and Canadian stores are doing very high numbers due to the percentage of turnover appearing to be much higher,” Kalra stated.

The company plans to significantly increase its restaurant inventory over the coming two years by opening 12 to 14 restaurants annually. These will be a combination of company-owned as well as franchise-owned stores.

The main brands in the offline expansion will be its bestsellers Pa Pa Ya and Farzi Café. It expects the 50-50 ratio to be between company-owned and franchise in the next two years, though Kalra is emphatic about not adding any new brands to Massive Restaurants’ portfolio in the future.

The surge in demand for online food and grocery delivery has catalyzed the expansion of the food tech industry over the past six years. This growth spurt has fostered a fertile ground for start-ups venturing into the cloud kitchen space, with investors enthusiastically backing multiple funding rounds.

In 2018, Massive Restaurants secured its second round of funding for Rs 160 crore, which Gaja Capital led. Following this round, the total external capital raised by the restaurant chain came to Rs 220 crore, and its existing investor Everstone’s F&B Asia Ventures (Singapore) partially divested its stake at that time.

Talking about raising capital to fuel the company’s growth plans, Kalra said that Massive Restaurants currently has healthy reserves. “While we recognize the need for additional capital to support our ambitious expansion plans, we remain committed to prudent budgeting and financial planning. We are looking to raise fresh capital for both our online as well as offline ventures. However, to fuel future expansions we will need capital and we are pursuing that,” he added.