Growth on menu, ITC set to expand cloud kitchen business

ITC forayed into cloud kitchen with ITC Master Chef Creations, ITC Aashirvaad Soul Creations and ITC Sunfeast Baked Creations

Cigarettes-to-hotel conglomerate ITC, which posted better-than-expected numbers for the June quarter and is demerging the hotel business, is all set to expand its cloud-kitchen operations to strengthen growth in the consumer business.

ITC forayed into cloud kitchen with three brands— Master Chef Creations,  Aashirvaad Soul Creations and Sunfeast Baked Creations— which operated in Bengaluru.

“We are now gearing up to take the (cloud kitchen) offering to other cities,” ITC chairman and managing director Sanjiv Puri said at the company’s 112th Annual General Meeting.

The company has over two decades built a strong packed foods portfolio across several categories including staples, spices, biscuits, confectionary, gums, snacks, noodles and pasta, beverages, juices, chocolate, coffee, frozen foods and ready-to-eat foods. Cloud kitchen is its latest push.

“Having established the product market fit successfully in Bengaluru with three brands, and delivered through 19 cloud kitchens, we are now gearing up to take the offering to other cities,” Puri said at the AGM on August 11.

Also read ITC shares gain on positive net profit numbers, valuations keep brokerages bullish on the stock

A cloud kitchen uses a commercial kitchen for preparing food for delivery or takeout only, with no dine-in customers. Cloud kitchens enable restaurateurs to expand an existing restaurant or start a virtual brand at a minimal cost.

The Indian cloud kitchen market is expected to reach $1.9 billion by FY26, according to consultancy firm Wazir. In FY22 it was at $800 million.

In February 2022, ITC Master Chef Creations and ITC Sunfeast Baked Creations partnered with Kitchens@, a cloud kitchen brand for a pilot.

The partnership enabled ITC to enter the food-service industry while operating from several cloud kitchens across Bengaluru.

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Puri also said that ITC was combining two big trends, digital technology and sustainability. ITCMAARS, a smart farming app, sustainable packaging, and food tech were the vectors borne out by combining the two big trends.

At 11.02 am, ITC was trading at Rs 442.40 on the National Stock Exchange, down 1.74 percent from the previous close.

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