Industry Analysis: Rebel Foods

Submitted by:
Kajal Patil (PGP09192)
Nikhil Choudhary(PGP09161)
Sameer Garg(PGP09170)
Seema Behera( PGP09173)
Shubham Kumar( PGP09177)
Sumeet Bhatere(PGP09181)
 COMPANY OVERVIEW : Rebel Foods
To understand the current standing, situation and offerings of Rebel Foods in order to analyze its
current synergies
Rebel Foods founded in 2011
Best food delivery service
Popularly known as Fasoos
rop
Has cloud kitchens where they
d

Pr
prepare food and delivers it through
ck

op
Ba its own delivery system and through

os
external partners like swiggy, Zomato,

it
etc.

on
Targets multiple segments of

Place
Location: Headquarterd at Pune

customers
customers

Target
and operating in 15 other cities
in India Working professionals, students,
Te Foodies
ch
no
l og
y olio
t
Uses Cloud technology, Google Por Presently operating with 9
maps
Brands
and Delivery partners like swiggy
and Zomato Brands like Faasos, Behrouz, Oven Story
- a pizza brand, and Firangi Bake, etc.

Rebel Foods has the first mover advantage in the category of cloud kitchen model in India and
hence can pioneer in this industry.
 Growth at a Glimpse

Significant increase in number of restaurants Growth in revenue vis-à-vis Kitchen count

Branding Strategy
Scalability
Business Model -

Key Partners Key Activities Value Propositions Customer Customer Segments

Relationships
Delivery partners It pivoted from being a
Swiggy Cloud Kitchen delivering quick service restaurant They provide product as
Zomato through multiple brands to a pure- play cloud well as home delivery Being a multi brand it
Ubereats like Fasoos, Behrouz, kitchen model i.e., services. They also have caters to different
Oven story, cooking in one place and 24 hours customer customer segments
Other partners SweetTruth, Firangi supplying to different support.
Sodexo cake, The Good Bowl outlets
etc,.

Key Resources Channels

Cloud Kitchens Virtual

Delivery restaurants
partners As well as
Employees retail
Google cloud
presence

Cost Structure Revenue Streams

Cost of raw materials Concept of Internet restaurants and
Cost of employee benefit cloud kitchen with multiple brands in
Administration cost each kitchen. Revenue sharing model
Maintenance Cost with 15% of revenue with hyper-local
Other expenses delivery partner like Swiggy and
Zomato

http://www.businessmodelgeneration.com
Collaborators and Competitors
• Got off the mark with its cloud
kitchen program : “Swiggy
Access”
• Partnering with bowl company
& Homely
• 30 partner restaurants with 35
kitchens across 4 cities
• Plans to scale the business to
300 restaurants in next 6-9
months
• Expand to 30-40 cities by 2020
• Driving its cloud kitchens
strategy through Food Panda
which it acquired in late 2017
• Food Panda is leveraging Ola’s
user base to grow its private
label brand
• Brands include: The Great
Khichadi Experiment,
Lovemade and FLRT
• Ola also counts soft bank
among its investors
• Invested in a 3rd party
cloud kitchen company :
Loyal Hospitality
• Loyal provided ready-to-
occupy kitchens to
restaurants
• In 2018, it raised over
$400 million from
investors led by Alibaba’s
payment affiliate
• Partnered with retail
coffee chain: Café Coffee
Day to launch its first
virtual restaurant
• Uber counts Japanese
internet and media
conglomerates soft bank
among its investors
6
 Revenue Vs Cost Curve

Sales growth over the long run typically Can continuously built multiple restaurant
hovers between 2-5% brands from same location

Cost increases at inflation No association between brands and

location
As a result once profitable restaurant
Hence best possible cuisine brands
starts making loss only after a few years
can be created without changing
anything
High Fixed cost with branding is nearly
Usual trends show low fixed cost
impossible for restaurant to surmount
this stagnation

7
 Competitive Analysis
Here we analyzed the total capital raised by various potential competitors & Faasos group from various investors
and a comparison of their net sales and their growth rate. It identifies your competitors and evaluates their
strategies to determine strengths and weaknesses relative to your brand.
Sales, Cost & Profit Cash Flow
Apart from 94.75($ mn) raised, Faasos had raised Rs 200 crore Faasos group reported a net growth of approx 18% in their
in a round led by Ru-Net, which valued the company at over net sales from FY17 to FY18.Currently it boasts the highest net
Rs 870 crore as reported by ET in December 2015. sales in both the years.

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 Income Statement
2018 2017 2016 2015 2014
₹ 1,464.84 ₹ 822.99 ₹ 619.38 ₹ 375.29 ₹ 266.80
REV ₹ 2.71 ₹ 2.53 ₹ 0.31 ₹- ₹-
₹ 22.90 ₹ 65.15 ₹ 42.42 ₹ 7.62 ₹ 7.20

Total REV ₹ 1,490.46 ₹ 890.67 ₹ 662.12 ₹ 382.90 ₹ 274.00

COGS ₹ 700.77 ₹ 444.52 ₹ 362.52 ₹ 178.31 ₹ 131.02
GP ₹ 789.69 ₹ 446.15 ₹ 299.60 ₹ 204.60 ₹ 142.98
SG&A
₹ 1,440.15 ₹ 1,183.99 ₹ 1,324.99 ₹ 402.92 ₹ 291.99

EBITDA ₹ -650.46 ₹ -737.84 ₹ -1,025.39 ₹ -198.32 ₹ -149.01

Depr. ₹ 81.89 ₹ 65.51 ₹ 64.21 ₹ 36.42 ₹ 29.49
EBIT ₹ -732.35 ₹ -803.35 ₹ -1,089.60 ₹ -234.75 ₹ -178.49
Fin. Cost
₹ 12.10 ₹ 16.99 ₹ 21.71 ₹ 9.22 ₹ 0.24
EBT ₹ -744.45 ₹ -820.33 ₹ -1,111.31 ₹ -243.97 ₹ -178.73
Tax ₹- ₹- ₹- ₹- ₹-
PAT ₹ -744.45 ₹ -820.33 ₹ -1,111.31 ₹ -243.97 ₹ -178.73

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 Balance Sheet
EQUITY & LIABILITIES
2018 2017 2016 2015 2014
Shareholder's Fund ₹ 200.02 ₹ 626.04 ₹ 977.26 ₹ 882.42 ₹ 204.01
(a) Share capital ₹ 33.62 ₹ 32.29 ₹ 30.15 ₹ 24.11 ₹ 14.95
(b) Reserves and surplus ₹ 150.15 ₹ 577.50 ₹ 947.11 ₹ 858.31 ₹ 189.06
(c) Money received against share warrants ₹ 16.25 ₹ 16.25 ₹ - ₹ - ₹ -
Share application money pending allotment ₹ - ₹ - ₹ - ₹ - ₹ -
Non - current liabilities ₹ 140.50 ₹ 43.04 ₹ 73.81 ₹ 64.91 ₹ 1.89
(a) Long term borrowings ₹ 115.00 ₹ 23.17 ₹ 60.67 ₹ 61.67 ₹ -
(b) Deferred tax liabilities (net) ₹ - ₹ - ₹ - ₹ - ₹ -
(c) Other long term liabilities ₹ - ₹ - ₹ - ₹ - ₹ -
(d) Long term provisions ₹ 25.50 ₹ 19.87 ₹ 13.14 ₹ 3.25 ₹ 1.89
Current liabilities ₹ 472.30 ₹ 342.50 ₹ 310.43 ₹ 130.33 ₹ 37.46
(a) Short term borrowings ₹ - ₹ - ₹ - ₹ - ₹ -
(b) Trade payables ₹ 356.10 ₹ 206.70 ₹ 202.55 ₹ 75.51 ₹ 26.69
(c) Other current liabilities ₹ 73.49 ₹ 109.66 ₹ 96.11 ₹ 50.15 ₹ 7.18
(d) Short term provisions ₹ 42.71 ₹ 26.14 ₹ 11.76 ₹ 4.68 ₹ 3.59
Total ₹ 812.82 ₹ 1,011.58 ₹ 1,361.49 ₹ 1,077.66 ₹ 243.37
ASSETS
Non-current assets ₹ 309.36 ₹ 266.37 ₹ 276.98 ₹ 136.51 ₹ 103.78
(a) Fixed assets ₹ 210.94 ₹ 175.94 ₹ 211.80 ₹ 96.60 ₹ 76.86
(i) Tangible assets ₹ 206.06 ₹ 168.10 ₹ 198.44 ₹ 75.95 ₹ 63.03
(ii) Intangible assets ₹ 4.88 ₹ 7.84 ₹ 9.69 ₹ 14.88 ₹ 13.60
(iii) Capital work-in-progress ₹ - ₹ - ₹ 3.68 ₹ 5.76 ₹ -
(iv) Intangible assets under development ₹ - ₹ - ₹ - ₹ - ₹ 0.22
(b) Non-current Investments ₹ 10.00 ₹ 10.00 ₹ 5.00 ₹ - ₹ -
(c) Deferred tax assets (net) ₹ - ₹ - ₹ - ₹ - ₹ -
(d) Long term loans and advances ₹ 86.99 ₹ 76.29 ₹ 54.68 ₹ 39.91 ₹ 26.92
(e) Other non-current assets ₹ 1.43 ₹ 4.14 ₹ 5.51 ₹ - ₹ -
Current assets ₹ 503.46 ₹ 745.22 ₹ 1,084.51 ₹ 941.15 ₹ 139.58
(a) Current Investment ₹ 15.00 ₹ - ₹ 862.13 ₹ - ₹ -
(b) Inventories ₹ 81.62 ₹ 54.11 ₹ 50.11 ₹ 19.26 ₹ 6.19
(c) Trade receivables ₹ 9.71 ₹ 2.86 ₹ 0.88 ₹ 1.19 ₹ 1.81
(d) Cash and cash equivalents ₹ 341.17 ₹ 659.32 ₹ 145.52 ₹ 913.40 ₹ 123.28
(e) Short term loans and advances ₹ 34.40 ₹ 18.72 ₹ 24.51 ₹ 5.31 ₹ 3.24
(f) Other current assets ₹ 21.56 ₹ 10.21 ₹ 1.36 ₹ 1.99 ₹ 5.07
Total ₹ 812.82 ₹ 1,011.58 ₹ 1,361.49 ₹ 1,077.66 ₹ 243.37
Common size income statement
2018 2017 2016 2015 2014
Total REV 100.0% 100.0% 100.0% 100.0% 100.0%
COGS 47.0% 49.9% 54.8% 46.6% 47.8%
GP 53.0% 50.1% 45.2% 53.4% 52.2%
SG&A 96.6% 132.9% 200.1% 105.2% 106.6%
EBITDA -43.6% -82.8% -154.9% -51.8% -54.4%
Depr 5.5% 7.4% 9.7% 9.5% 10.8%
EBIT -49.1% -90.2% -164.6% -61.3% -65.1%
FinCost 0.8% 1.9% 3.3% 2.4% 0.1%
EBT -49.9% -92.1% -167.8% -63.7% -65.2%
Tax 0.0% 0.0% 0.0% 0.0% 0.0%
PAT -49.9% -92.1% -167.8% -63.7% -65.2%

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 Ratio Analysis
2018 2017 2016 2015 2014
Leverage ratios
Debt/Equity 0.57 0.04 0.06 0.07 0.00
Assets/Equity 4.06 1.62 1.39 1.22 1.19
Debt/Assets 0.14 0.02 0.04 0.06 0.00
Interest Coverage
Ratio -60.55 -47.29 -50.19 -25.45 -757.75
Liquidity Ratios
Quick Ratio 0.77 1.93 3.25 7.02 3.34
Current Ratio 1.07 2.18 3.49 7.22 3.73
Performance Ratios
Gross Margin 0.53 0.50 0.45 0.53 0.52
Net Margin -0.50 -0.92 -1.68 -0.64 -0.65
Return on fixed
Assets ₹ -3.53 ₹ -4.66 ₹ -5.25 ₹ -2.53 ₹ -2.33

Return on Assets ₹ -0.92 ₹ -0.81 ₹ -0.82 ₹ -0.23 ₹ -0.73

Return on Equity ₹ -3.72 ₹ -1.31 ₹ -1.14 ₹ -0.28 ₹ -0.88

Return on capital
employed ₹ -2.15 ₹ -1.20 ₹ -1.04 ₹ -0.25 ₹ -0.87

Total Asset turnover ₹ 1.83 ₹ 0.88 ₹ 0.49 ₹ 0.36 ₹ 1.13

Fixed asset turnover ₹ 7.07 ₹ 5.06 ₹ 3.13 ₹ 3.96 ₹ 3.56

Inventory turnover ₹ 44.48 ₹ 25.51 ₹ 16.51 ₹ 22.16 ₹ 43.33 12

 REBEL & SWIGGY
REBEL SWIGGY
2018 2017 2016 2018 2017 2016
DSO 1.52 0.76 0.56 11.55 13.15 68.76
DIO 34.86 42.20 34.44 0.24 0.13 0
DPO 144.56 165.72 138.06 22.04 18.73 20.97
Cash conversion cycle -108.18 -122.76 -103.06 -10.25 -5.45 47.79

Why Swiggy?
• Swiggy started its Swiggy Access, cloud kitchen business in 2017
• According to a Economics Times article, about 15% of sales volume for Swiggy
comes from Access
• This business structures partially comparable so as to compare at least efficiency
ratios

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 REBEL & FRESHMENU
Rebel FreshMenu
Revenue ₹ 1,490.46 ₹ 1,237.20
Total expense ₹ 2,234.90 ₹ 1,676.00
Rev Growth 67% 62%
COGS ₹ 700.77 ₹ -
Employee Expense ₹ 664.22 ₹ 441.00
Marketing Expense ₹ 216.70 ₹ 153.80
EmployeeExp % Rev 45% 36%
PAT ₹ -744.45 ₹ -438.80
PATMargin -49.95% -35.47%
No of employees 2200 1500
Orders per day 66666.66667 20000
Time for delivery in mins 15 32
No of cloud kitchens 200 40
No of cities operated 15 4
Average ticket size 350 300

Ratios
Rev/employee ₹ 0.68 ₹ 0.82
Rev/city ₹ 99.36 ₹ 309.30
Rev/cloud kitchen ₹ 7.45 ₹ 30.93

Orders per day/Cloud Kitchen 333.3333333 500

EmplyeeExp/Employee ₹ 0.30 ₹ 0.29
Kitchens/City 13.33333333 10
Rev/day/kitchen 116666.6667 150000
Marketing expense % Rev 14.54% 12.43%

Marketing expense per cloud kitchen ₹1.08 ₹3.85

Marketing exp per city ₹14.45 ₹38.45
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 Prime cost for Quick Service
Restaurants

Industry
Rebel standards
55-60% for
Prime cost % rev 92% QSR

• Prime cost is primary performance parameter of Quick Service Restaurants

• Industry average for Prime cost is 55% to 60%
• Prime cost = ( COGS + Employee costs )/ Rev

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Aggregators moving towards Cloud
Kitchen
• For every Re 1 that Swiggy earned, it lost Rs
1.5 in FY17 but players such as Box8 and
FreshMenu earned Rs 2.7 and Rs 1.8 for each
rupee spent

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 Comments

Rebel Foods is planning to expand aggressively throughout India & outside

in UAE, US, UK

Operational efficiency is a prime problem

No of orders per day need to be improved

Larger cost differences in comparable Revenue among competitor like

FreshMenu operating in just 4 cities, while Rebel operating in 15 cities

Employee productivity need to be improved & looked after

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 References
• https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/why-are-food-aggregators-leveragi
ng-the-delivery-only-model/articleshow/69178702.cms?from=mdr
• https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/cloud-kitchen-cos-offer-better-spre
ad-vs-food-aggregators/articleshow/62467847.cms
• https://www.exchange4media.com/marketing-news/we-set-aside-10-15spend-for-content-marketingap
arna-maheshcmofreshmenu.com-69997.html
• https://inc42.com/buzz/freshmenus-fy18-loss-widens-as-advertising-employee-expenses-rise/
• https://www.outlookbusiness.com/enterprise/feature/tapping-the-indian-palate-2811
• https://www.financialexpress.com/industry/food-aggregators-betting-on-cloud-kitchen-where-does-that-
leave-restaurant-partners/1490602/
• https://www.thehindubusinessline.com/info-tech/online-food-start-up-freshmenu-on-track-to-profitability
-rules-out-sell-off/article26501161.ece
• https://tech.economictimes.indiatimes.com/news/internet/swiggy-doubles-down-on-cloud-kitchen-mode
l-expects-25-revenues-in-2-yrs/65964812
• https://www.forbes.com/sites/samshead/2019/05/17/amazon-leads-575-million-investment-into-food-de
livery-startup-deliveroo/#551c7b6c618c

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Thank you