Peter Schatzberg Founder & CEO of Sweetheart Kitchen while conversing with Daily NewsPK explained how they are transforming food industry by leveraging technology to offer high quality and affordable food and at the same time overcoming inefficiencies in food delivery.
1. What led you to create ‘SWHK’? When was it founded?
Sweetheart Kitchen was founded in 2019 to solve the inefficiencies of the food delivery supply chain. These include optimisation of labor and fixed costs inside the kitchen but also contribution to the logistics vertical through faster, more predictable food lead times.
2. What is the core service/solution you are providing? What are the pain points that you are targeting and what is the key differentiating factor from similar offerings?
We offer affordable, convenient, high quality food for delivery. Through economies of scale we achieve purchasing power that makes our food affordable and our company profitable. By leveraging technology and manufacturing methodologies from mature manufacturing industries, we create a LEAN kitchen environment that creates process driven food assembly reducing labor requirement while giving delivery platforms more predictable food readiness times.
Most other Virtual Kitchens prefer to rent (and fit out) large spaces and rent out fractional space to existing F&B operators while also providing some shared utility and storage space. SWHK creates it’s own brands and design their own cuisines. We also rely heavily upon proprietary supply chain technology that allows us to measure and manage our performance remotely and in real time.
3. What are the parameters to measure client satisfaction?
In such a disruptive and complicated business model, we have grown to rely upon the traditional measures of success (revenue, unit profitability and order profitability). We also examine re-order rates and return rates but due to the various unique features of our business model, we find that we cannot benchmark versus others. So long as our P&L moves in the right direction with respect to revenue and margin while our loyalty measures remain strong, we are confident that the consumer is pleased with their SWHK experience.
4. What is your future outlook and what do you stand to achieve by next year?
While food delivery was already disruptive and scaling globally, COVID-19 accelerated the adoption rate. We see more entrepreneurs and seasoned food veterans exploring the Virtual Kitchen domain but as challenging as running restaurant operations can be, running Virtual Kitchens is far more complex. We are experienced in both business models and have found the development and management of successful Virtual Kitchens to be far more comprehensive. We will see many more failures before we find this model taking over, but once enough people figure it out, eventually Virtual Kitchens will handle more than 50% of all delivery orders.
SWHK plans to expand to 35 units in the Middle East by the end of 2020. By the end of 2021 we should be at 100 units and have expanded far beyond the Middle East.
