Singapore’s SATS eyeing a slice of food delivery market

Bengaluru mega-kitchen to produce 40 tonnes of ready to eat food daily

Bengaluru: When you order from a food delivery app, you might think they prepare it fresh at a restaurant or a cloud kitchen and have it delivered to your doorstep. In many instances, you could be wrong.

In the growing business of industrialised food, everything is prepared in massive quantities, and then delivered to cloud kitchens, which in many cases just heat up the item ordered, add a few more condiments to tailor to customer preferences, and then pack the item for delivery.

A newly inaugurated facility near Bengaluru’s Kempegowda International Airport, by SATS Food Solutions India (SFSI), a subsidiary of Singapore-based SATS, is one such mega kitchen, its purpose much beyond the company’s more visible business of catering to various airlines.

The 2.1 lakh square feet central kitchen is the company’s largest outside of Singapore, bigger than those it operates in China, Thailand and Japan. SATS has invested an initial Rs 360 crore which could increase based on the kind of demand the mega kitchen experiences, SFSI chief executive officer Sagar Dighe told DH during a tour of the facility.

Since beginning operations in January this year, the central kitchen is utilising nearly 25% of its total capacity of producing 40 tonnes of cooked food per day. “Our ambition is to go beyond 50-55% capacity utilisation by FY25,” Dhige said. The company has already onboarded food delivery giant Swiggy as one of its clients.

SATS will target Swiggy’s dark kitchen network, and has 20-30 other customers in the pipeline including cafes, cloud kitchens, hotels, and stores like 7-eleven. The kitchen will also cater to TajSats, the company’s joint venture with Taj Hotels that caters specifically to airlines.

The company will focus the Bengaluru facility’s capabilities on the domestic market, as it expects sales in India’s ready to eat (RTE) market to grow at a compound annual growth rate of 45% between 2021 and 2026, at a projected total spending of $64 billion. Even so, around 15% of the total production will be kept aside for exports to its partner networks across the globe, where the demand for Indian food is increasing exponentially.

Dishes like Butter chicken are already a global favourite, and the SATS kitchen has rows of assembly lines dedicated to producing the tomato-heavy gravy. It also has lines to produce other crowd favourites like dal, chicken biryani, and chilli paneer. Recipes are also curated based on a restaurant’s wishes and budget, or food can be mass cooked based on the recipe provided by a client.

Once finalised, the recipe comes under a legal bind and is only produced for a specific restaurant, one chef told DH while frying kilos of paneer for an indo-chinese restaurant. The gravy, paneer and fresh veggies like onion and capsicum are packaged separately and shipped to the restaurant, that can fire it up on a pan when an order is up, with a splash of fresh seasonings as required. The food stays fresh for up to a year once stored in the facility’s blast freezers.

Since making small batches in the large equipment is not economically feasible, the company has a minimum order quantity for clients. This means that smaller restaurants not specific about the recipe can buy the generic mass produced butter chicken shipped across outlets. When asked about whether the end consumer knows the food has been mass produced and frozen for days (or months) prior, Dhige pointed to the freshness retained through these processes and stressed on the company’s zero preservatives approach.

The facility also houses multiple rooms and freezers for bakery and confectionary items, where the company sees great potential for growth in India. Lines upon lines of croissants were being baked to be shipped to cafes across the country, with workers only required to load and unload the equipment.

Once fully set up, the company will also look to tap the burgeoning frozen food market in India, packs of which will be sold at retailers and online stores directly to customers, a pivot from its current business-to-business focus.