The food and beverage industry is constantly evolving in today’s fast-paced world. Businesses must adapt to remain competitive as consumer preferences shift towards convenience and speed. This is why Dishserve decided that a pivot was necessary for the continued success of the company.
Dishserve began as a provider of dark kitchens to small food and beverage businesses but has recently shifted its focus to automating back-of-house operations for restaurants, cafes, and delivery-only kitchens. Dishserve is revolutionising the way these businesses operate by leveraging cutting-edge technology and innovative solutions, streamlining processes and improving efficiency.
To understand the reasons behind this pivot and how it happened, we spoke to Rishabh Singhi, CEO and Co-Founder of DishServe. He has been at the helm of the company since its inception and has raised funding from global investors such as Insignia Ventures Partners, Genting Group, Stonewater Ventures, Ratio Ventures, Rutland Ventures, 300x Ventures, and MyAsiaVC.
Is the golden era for the Southeast Asia tech scene coming to an end?
Pivoting is an important part of running a competitive business because it allows companies to adapt to market changes, consumer behaviour, and technological advancements. Businesses can make strategic changes that can make a significant difference in their success by recognising opportunities and addressing challenges early on.
Companies that do not pivot may struggle to keep up with changing market dynamics and consumer needs, resulting in a decline in revenue and market share. The inability to pivot can also stifle innovation and growth, causing businesses to stagnate and lose their competitive edge.
Congrats on the pivot, which can be challenging. Can you explain how you came to the discussion to pivot your business model?
Thank you, the pivot was challenging but worth going through. In our previous model, we helped F&B brands to expand by providing them with a network of cloud kitchens. These cloud kitchens were owned and operated by individuals and DishServe would only standardize them in terms of equipment, SOP, audits and technology. So, it would have been best to describe us as an asset-light cloud kitchen company.
As the macro market situation started to change globally, we realised that the path to profitability on that model was very long, especially as the margins were very thin. This is when we began a series of experiments which finally led to the pivot of our business model.
It was mentioned that part of the reason for the pivot was the challenges within the industry, could you elaborate on that?
We ran the previous model for one and a half years. Through our experience, we realised that there were four primary problems.
- There were too many middlemen nodes in the value chain – namely the F&B brands, the cloud kitchen operators, food delivery apps and Dishserve. This left DishServe with razor-thin margins.
- Most of the F&B brands we worked with to assist in their scalability were using manual and traditional production methods. This meant that they had no capacity to scale up when the demand was high.
- Our larger enterprise clients shifted their overall focus toward offline operations and started facing their own financial struggles.
- The smaller brands that we worked with did not invest in R&D, most notably in the area of menu curation, which resulted in inconsistent food quality.
Can you explain the new business model and what the innovations are?
In our new business model, we automated everything that happens in back-of-house operations into one kitchen partner application. As mentioned before, we understood the reasons that smaller F&B brands were not able to scale up, hence we decided to launch our own brand to address this key market issue. It is no secret that the Indonesian food market is already very large and oversaturated with brands. With further observation, we noticed that the healthy food market segment is underrepresented and underserved and that overall, there were very few brands in the space. These brands are typically not affordable, accessible or tasty for Indonesian locals. Therefore, we decided to invest in research and curate affordable brands that would taste like delicious familiar food, except with a focus on being health conscious.
In terms of innovation, we have addressed this primarily on 3 fronts – Food technology, Supply chain/logistics and Distribution technology.
In terms of food technology, our key concern was finding ways to conserve the nutritional value of food while guaranteeing a high shelf life. We also strive to curate menus that are easy to put together in the kitchen, ideally in five to seven minutes.
For supply chain and logistics, we have incorporated QR-based inventory tracking which lowers wastage. Additionally, we are implementing technologies that allow us to forecast aggregate demand, which in turn allows us to produce in accordance with the reality of demand.
Lastly, for distribution, our kitchen app allows kitchens to sell seamlessly online and offline. It includes brand connections, food delivery app integrations, pricing and promotions automation, financial reconciliations, inventory management, supply chain and logistics, customer service, QR code-based dine-in, and more.
This helps the kitchen partners to focus solely on service to the end customer while all the back-of-the-house operations are automated and taken care of by DishServe.
How do you plan to scale your new solution and re-educate your customer base?
Following our pivot, our client base has shifted to focus on their kitchen operations. We maintain a close working relationship with these clients and ensure they are regularly informed of our progress, changes, and evolving business models.
Our high-tech and low-touch business is highly scalable. Our kitchen application emphasises accessibility and ease of use. At the same time, our easy-to-serve menus are proven to be simple and hassle-free for our partner kitchens to cook and serve reliably.
What’s next for DishServe?
DishServe is on a path to creating the largest multi-brand healthy food restaurant chain in Indonesia. By partnering with a plethora of underutilised kitchens, curating health-focused brands and expanding all across Indonesia.