Swiggy Hands Over Digital-First Food Brands to Kouzinas in Strategic Move

In order to secure exclusive licenses for its digital-first food brands, such as The Bowl Company (TBC), Homely, Soul Rasa, and Istah, foodtech giant Swiggy has partnered with Bengaluru-based Kouzina Food Tech. As part of this agreement, Kouzina will use its asset-light, cloud kitchen approach to oversee all facets of these businesses, including operations, innovation, and national expansion.

Nevertheless, it has been claimed that a few of these brands have been facing operational difficulties. TBC has reportedly been offline in Bengaluru for the past five weeks, according to a media report. The source also stated that Swiggy had briefly delisted the brand internally because of operational problems.

Even though the deal's financial details were not made public, Swiggy will give Kouzina complete control of these businesses if they fulfil a number of predetermined requirements.

Homely is presently available in a few Bengaluru locales, but later this week, TBC will be introduced, according to Gautam Balijepalli, cofounder and CEO of Kouzina. Balijepalli stated, "We're also getting ready to expand to more cities soon."

Reason Behind the Move

TBC, Swiggy's largest in-house food brand, was introduced in 2017 and is renowned for its extensive menu. Swiggy was also the operating platform for other cloud kitchen brands, including Homely, Soul Rasa, and Istah.

However, the need for a brand like TBC seems to have decreased as the restaurant industry changed. These brands were first launched by Swiggy to fill in supply shortages in restaurants and improve customer convenience and diversity. According to Arpit Mathur, vice president of Swiggy, the company's food brands—The Bowl Company, Homely, and others—were introduced to fill in the shortage of restaurants and satisfy customers' needs for convenience and variety in food delivery.

 In the end, these brands have helped customers by occupying important market white whitespaces and encouraging restaurant partners to innovate. By licensing these names to Kouzina, Swiggy appears to be leaving the private label market.

 With the National Restaurant Association of India (NRAI) preparing to sue Swiggy and Zomato, the company is coming under fire from the restaurant industry for its private label strategy. In a recent move away from running its own food brands and on core delivery and speedy commerce, Swiggy has shut down its hyperlocal delivery service, Genie.

Swiggy Now Focussing on Bolt

The business just announced on 2 May in an exchange filing that it is increasing the scope of its Bolt quick meal delivery program, which is now being extended to more than 500 Indian locations.

Additionally, according to the firm, Bolt has already powered over 10% of Swiggy's food delivery orders in less than six months since its launch.

 In the meantime, its competitor Zomato recently closed both its quick commerce play, Zomato Quick, and its quick food delivery vertical, Zomato Everyday.